October 29, 2005 - From the October, 2005 issue

Gastelum Joins L.A. Chamber, Will Draw on MWD Experience to Encourage More Collaboration

One of the region's foremost experts on the business of water, Ron Gastelum is the former President and CEO of the Metropolitan Water District, the nation's largest water wholesaler, selling water to 18 million people in six counties. As head of MWD, Mr. Gastelum de-emphasized costly, and sometimes inefficient, infrastructure projects and diversified the agency's business plan. Mr. Gastelum has recently joined the L.A. Area Chamber of Commerce as its executive vice president. In this new position, Mr. Gastelum will oversee the Chamber's operations and continue to build relationships across jurisdictions and affiliations. He will also help oversee the transition as the Chamber's longtime president, Rusty Hammer, steps down due to health reasons. MIR spoke with Mr. Gastelum about his goals for the organizations, his thoughts on the region and state's current water situation, and the upcoming Mobility 21 Summit.

Ron Gastelum

Ron, you have just assumed the position of executive vice president of the L.A. Area Chamber of Commerce at a point of transition in the organization. Rusty Hammer, we know, plans to leave his post as president due to unfortunate health issues. Elaborate on the challenges that the Chamber faces and what responsibilities you have taken on to meet these challenges.

The L.A. Area Chamber of Commerce is engaged in most of the major issues in Los Angeles today – education, goods movement, water, electricity, competitiveness – and fortunately has developed a strong presence in all of those areas under the leadership of Rusty Hammer. My job and the job of the Chamber's staff and board is to maintain that momentum we gained on those issues, and it's an important time to do that given the election of a new mayor who has a very ambitious agenda. So, I'm very excited to be able to be here and to help move the Chamber's agenda forward and work as closely as we can with the mayor and other state and federal officials that are focused on these issues.

You bring to this assignment impressive credentials from your leadership position at the Metropolitan Water District. Please comment on the infrastructure challenges facing the L.A. area and the role of the Chamber in advocating a positive direction and agenda not only for the mayor but also for other elected leaders – including mayors, councilmembers and supervisors – of the jurisdictions that make up this region.

Focusing on the region, the Chamber is one of the best organizations in my mind to work with other chambers and other organizations, and certainly to help the various governmental agencies agree on priority issues and hopefully come together to obtain financing and public consensus. I see the Chamber as a catalyst. I think it's a misnomer to characterize this chamber as purely looking at these issues from a business perspective. One of the things that I enjoy most about serving on the Chamber's board is the representation of a broad array of interests in this chamber – small business, big business, environmentalists, people that are seeing all facets of the issues and bringing their expertise and interests to bear on where the chamber will be as we engage in this regional dialogue and hopefully regional strategy to solve some of the problems that we face.

We have an interview in MIR's sister publication, The Planning Report, with Bud Ovrom, the new deputy mayor for economic development for Mayor Villariagosa, delving into the question of how to generate quality jobs here. How does the Chamber articulate and contribute to an effort to revitalize the region by developing more jobs and quality neighborhoods in Los Angeles?

I think the Chamber is best at creating the dialog and bringing the interests together to identify specifically what the problems are and to build solutions. As an example, the Chamber has partnered with the MTA, and others, in sponsoring Mobility 21. Bringing people together, talking about the issues, and developing good ideas for solutions, I think, is job number one for the Chamber. Job number two is to be an effective advocate locally, as well as in Sacramento and in Washington, D.C., for the region and for the consensus that we develop here. Financing for the port, for example, or financing for some of the other major projects, such as improvements at LAX, I think we all agree are top priorities.

Elaborate a bit more on this upcoming Mobility 21 meeting and the particular hopes and expectations the Chamber, as a co-partner in that effort, has for Mobility 21.

On November 14 at the Long Beach Convention Center, the Mobility 21 conference, sponsored by the Los Angeles Area Chamber of Commerce, the MTA, and the Automobile Club of Southern California, as well as many others, will focus on three key issues: transportation and its role in the global economy and how our county can remain competitive; transportation and the quality of life in L.A; and homeland security and ensuring the safety of transportation. Our keynote speaker will be Leon Panetta, former chief of staff to President Clinton, and we're looking forward to the participation of Mayor Villaraigosa, who is the chairman of the MTA, as well as many other local and state officials and private businesses. We hope the readers of the Metro Investment Report will join us at this conference.

Ron, as the former CEO of MWD, you led one of the most successful regional governance organizations in the State of California. With the Los Angeles Area Chamber of Commerce chrarted to represent the metropolitan area; it too is regional organization. What lessons learned from MWD do you bring to the work of the Chamber to help it link all the intestes of this region together?

Bringing people together, talking about regional issues, and being prepared to compromise as you do that is the essential accomplishment that we can bring to bear here. But just bringing people together and agreeing doesn't solve the problem. At the base of most of these issues is a financial need. Just to maintain our existing infrastructure will require billions of dollars of investment by business and government. So we need to develop the financial tools to do that and then move on to improvements needed to deal with growth. And, to make ourselves more competitive as a region will require much more investment.

One of the great talents of the MWD is to build upon the financial structure of combination of tax revenues and largely user fees that can finance the infrastructure that we have and will need in the future. So I will look to that experience of coalition-building and consensus-building and focus on building financial structures, and not necessarily financial structures that are largely dependent on funds from Sacramento or Washington, D.C.

How does the Chamber best collaborate with the other business and civic efforts in the region, namely the LAEDC's newly organized Southern California Leadership Council which is focused on infrastructure and goods movement? How might the Chamber be of most value to this multi-county effort?


I think we're fortunate that so many organizations and people in our community are stepping up to engage the issues that we face. I think the job of the chambers that has been, for many years, to welcome others to the table and figure out where we can best utilize each other's talents. I see the L.A. Area Chamber of Commerce being one of the leaders to bring people together, agree on solutions, and combine efforts to implement good ideas.

You've accepted your role with the chamber as an interim appointment. Clearly, substituting for Rusty is going to be a great challenge. What is the leadership transition plan for the Chamber?

Rusty is continuing to play an important strategic role, but my job is, on a day-to-day basis, to manage our staff and work with the board to move the organization forward. I will immediately engage in the priority issues and be involved in a very public way in those issues. But I will also be working on getting the organization ready for a new CEO. The board has begun the recruitment process, and I would expect that within the next six to nine months they will complete that process and we'll be ready hopefully for the long tenure of a very dynamic new leader.

We can't close an interview withyou without asking you to reflect on the water challenges for Southern California and the state. When MIR last interviewed you, for your MWD exit interview, you said that three foundational blocks are in place: a rate structure, the QSA agreement, and CALFED authorization; you also said that implementation is the job ahead for the new MWD CEO. Give us an assessment as we come to the fall of 2005 on where we are in that implementation effort and what we can expect from MWD in the months ahead.

Coming off one of the highest recorded rainfall years, there is a feeling at MWD that we have enough water, at least near-term, and the focus is on the long term in implementing the QSA and making CALFED work. These are enormously complex challenges. We've had some breakthroughs to establish the fundamentals of those programs, but it's going to take a while before the job is fully implemented.

It's very possible that the vision that we saw last year for QSA or CALFED may change as we encounter issues that may have not have been anticipated. As an example, in the QSA we're still struggling with the right solution for the Salton Sea. The lining of the All-American Canal is proceeding, but further discussions may be required with the Republic of Mexico as impacts are evaluated. And of course, the very sensitive discussion of shortage on the Colorado River could have an impact on the QSA, and those discussions are likely to continue for some time.

Perhaps the most important new fact that the water community is dealing with is how good our levee system is in the Sacramento-San Joaquin Delta, and if we should review our assumptions about CALFED to make sure that we're not vulnerable to the kinds of levee failures that we saw with Katrina.

Let's exit with a question that ties L.A. Chamber issues to water. There's been historic friction regarding water policy among Northern and Southern California and agricultural interests, but there's now also some tension between Northern and Southern California over state infrastructure and transportation funding and priorities. What are the lessons learned from your MWD days that are of value in bringing the state's disparate regions together to best press for revitalizing and reinvesting in our state's infrastructure?

I think the most important lesson is that we need to push for as much discussion as possible. Much of the conflict results from long-held regional or local biases that do not necessarily relate to facts or to self-interest. Through dialog we get the issues on the table and we try to find common ground and hopefully recognize that we truly are all in it together. North vs. south, east vs. west is an outmoded, outdated notion of California.

In the water systems we are so interconnected, and of course the environment can be impacted by actions in the north as well as actions in the south because of our interconnectedness, and the evolution of scientific knowledge about these impacts and the interconnectedness of the relationships compels us if not legally then certainly as a matter of responsible planning to approach problems in a much more holistic manner. I see more dialog, I see frank discussions, and I see California coming together to represent itself better as a unit on the national scene to be able to leverage the resources that we contribute and get back what we need to solve our problems.


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