Water District Staff Gets Testy, Defends RMC Deal that Will Cost $103 Million, Offer Little Benefit

In light of the presidential recount in three states, Fly decided to take a look back at a multimillion-dollar decision that zipped under the radar on Election Night. While many people were tracking returns and drinking bleach, the Santa Clara Valley Water District’s board of directors signed off on a $5 million deal for RMC Water and Environment. This is the same company the board wanted to audit late last year—and still has yet to do—after Metro’s reporting brought to light several conflicts of interest, a district manager accusing RMC of theft and the district’s former CEO, Beau Goldie, breaking agency bylaws to give away more taxpayer money. The district’s interim chief operating officer, Melanie Richardson, also happens to be married to one of RMC’s principal owners, so any big contract for the company—recently acquired by Woodard & Curran—personally benefits one of the district’s top executives. At the Nov. 8 meeting, directors were urged by staff to let RMC oversee a $103 million flood control project in South County, which will benefit just a few thousand residents. Directors Gary Kremen and Barbara Keegan questioned the timing in approving the contract, leading to a bizarre defense by Stephen Ferranti, the district’s capital engineering manager. Citing his three-year relationship with RMC, Ferranti noted, “I don't have 33,000 emails with them, but I’d be glad to share all my emails,” which, we guess, was some kind of shot at Hillary Clinton. Ferranti then made a peculiar vow that he wouldn’t “acid wash” his communications with the company. Keegan seemed to realize things were getting off track, but Ferranti cut off the board chair by persisting that RMC wants “to do a good job” while also noting that the company was recently embroiled in a bribery scandal after paying a Monterey County water board member $160,000. If all of that wasn’t enough to give the board pause—and it wasn’t, as the RMC deal was approved on a 5-2 vote after several procedural miscues—the proposed project for Upper LLagas Creek flood protection has a benefit/cost ratio of 23 cents to every $1 spent, which is horrendous. The industry standard is to avert $1 of flood damage for every $1 spent. Additionally, because the project doesn’t meet the benefit/cost ratio required for federal assistance or matching funds, local taxpayers are 100 percent on the hook for a project that benefits only a few thousand people.

Here are the benefit/cost ratios for several of the Santa Clara Valley Water District’s active flood protection projects:


B to C Ratio

Upper Llagas Creek (RMC project)

0.23 to 1

Upper Guadalupe River

1.16 to 1

Upper Penitencia Creek

1.3 to 1

Lower Silver Creek

1.1 to 1

San Francisco Bay Shoreline (North San Jose)

9.4 to 1

Berryessa Creek

3 to 1

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  1. Sounds like water district employees are pro-Trump and are saying anti-Ms. Clinton things in their official capacity. Is that even legal?

  2. I can’t help but think the Water District staff people are nothing but self-serving crooks. Likewise, RMC personnel are liars and cheats. The two organizations together are raping taxpayers and this whole mess stinks enough that County and City governments should examine this scam!

  3. A note to “FLY,” please, please keep this in the public eye. Follow up on the goings-on and make public all of the underhanded, greasy, slimy dealings between the Water Board and RMC. I’d like to see them sweat and retract their plans.

  4. You might have a good point to this article but it is lost in the utter hypocrisy of your political statements. Apparently it’s okay to mock one presidential candidate while chastising someone for mocking the other, neither of which have anything to do with the issue you’re trying to highlight.

    Seriously? I’m trying to wrap my thoughts around the idea that this twisted logic is so apparently invisible to you. The writing is good, the details are spelled out concisely with logic and clarity – but somehow it’s okay slide in a nasty comment while chastising others for doing the same.

    If you’re capable – and I say this with all sincerity – a bit of honest self examination would be a healthy exercise right now.

  5. I would still like to know what happened to the 2 million $ HD 4k color and tons of other pork? BOARDROOM? whatever happened to Jesus, Beau, George, frank, 6th IT manager (WHO WERE ALSO FIBBING) will this also be another multi million dollar loss? LIKE RMC! FLY/METRO PLEASE KEEP US POSTED.

    • I’m with u totally…another one slid under the rub by the politicians and our District Attorney’s office. Maybe it’s time for STATE AND FEDERAL ATTORNEY GENERAL’S. THIS crap has been going on way too long and still nothing done to stop this outright corruption in this dept fed by our voter money.

      • i agree!! This is far beyond local and state jurisdiction if only for the fact that this racqeterring has been going on under their noses for so long. FBI for sure!

  6. Folks just ask for all the recorded minutes from both the Fluoridation and Boardroom AV System Upgrade Ad-Hoc committee meetings that are not part of the regular Board meetings. Audio/video from these AdHoc committee meetings should be uploaded and readily available to the public from valleywater.org website like the Board meetings are archived. Often times the discussion and outcome contradicts the Water Districts Mission statement. Like others have said in the past …tip of the iceberg with this RMC issue.

  7. The big issue is the low cost benefit ratio for Upper Llagas Creek. Dennis Kennedy pandered himself to support Linda LeZotte on other votes so she would vote for this boondoggle. We predict Johnny Varela will do the same by keeping LeZotte on LAFCO so she keeps supporting big benefits for the few rich people (and her campaign donor RMC) in Morgan Hill who get taxpayer cash from the Golden Spigot.

    At the same time, great people like Paul Goeltz, never got a thank you and never get the $1300 promised by Frank Fung.

    Watch the meeting ratepayers and kiss your $103 million goodby!!!

    • Why in the world can this huge dept continue with their corrupt and self-ingratiating routine. They should all be in jail! I think we voters will then get to see how much money they’ve been scamming all along! This is a dept that needs to be investigated thoroughly; and an oversight committee in place so this can’t happen again. Our politicians and District Attorney’s office is letting us down bigtime, I’m thoroughly fed up with the Water District corruption and racketeering.
      u ask how they can continue to act in this manner>>>?It’s because they’ve always gotten away with it!! and they have a huge budget and keep getting more from us,the voters!! HORRIBLY WRONG..

  8. From what i was told by Paul, David Cahen there loss person @SCVWD would give Paul his $1300 for his missing equipment, if he would drop all boardroom and manager/staff claims, talking to the press and pretty much forgetting what goes on @SCVWD PAUL TOLD ME HE REFUSED TO SIGN THE LEGAL DOCUMENT which still sits in legal a copy can be made available . I was told by my boss in IT to toss a good portion of pauls personnel items, as he could take them at the time the escorted a retiree from the building. They sent paul district equipment and software, which paul told them about when asking for his missing items. The loss manager never asked the techs what was thrown away ad what was not.

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