City Seeks to Take Over Privately-Owned Water Utility that Serves Claremont - NBC Southern California

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City Seeks to Take Over Privately-Owned Water Utility that Serves Claremont

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    NEWSLETTERS

    Calling for "local control" and offering hope of reducing water rates, advocates of Claremont's Measure W on the Nov. 4 ballot are campaigning for voter approval. Opponents question taking on as much as $135 million in debt. Patrick Healy reports live for the NBC4 News at 6 p.m. on Friday, Oct. 24, 2014. (Published Friday, Oct. 24, 2014)

    The home of trees and Ph.D.s is gaining a less idyllic distinction — as ground zero for something of a water war.

    Unlike most of its neighbors in eastern LA County, the college community of Claremont continues to be served by a private water company instead of a public utility.
    Measure W on the November ballot, if approved, would authorize the city to take on as much as $135 million in debt to acquire the local assets of the Golden State Water Company, the city's longtime provider.
    Calling for "local control," measure W advocates accuse the company of being unresponsive, and
    complain that they pay rates higher than residents of neighboring cities with municipal water service.
    "This isn't a fight against private utilities," said Councilman Sam Pedroza. "This is a fight against this water company, Golden State.
    During summer, the city made a purchase offer of $55 million, which Golden State refused.
    It estimates the value at $222 million. 
    In opposition to measure W, Golden State supports a "stop the water tax" campaign. The company, through its PR consultant, referred a request for comment to Donna Lowe, a Claremont resident active in the campaign.
    "There's a lot of misguided anger right now," said Lowe, noting that rate increases have to be approved by the California Public Utilities Commission.
    To reduce water costs for residents, the focus should be on reducing consumption, not attempting to push out a company, Lowe said. She questioned the fiscal responsibility of issuing a bond to finance the purchase.
    "Seems to me this is a risk for the city we should not take," said Lowe.
    In recent months, since the city council voted to placed measure W on the ballot, tensions have escalated, and Golden State has filed a series of legal actions against the city.
    "Sadly, Golden State has just mismanaged their relationship with Claremont," said longtime resident Betty Crocker, active with Claremont FLOW (Friends of Locally-Owned Water). Flow has collected signatures from more than 1,100 supporters, Crocker said.
    Friday evening, several dozen gathered at the busy intersection of Foothill and Indian Hill boulevards and displayed signs supporting measure W.
    Claremont is a small enough city — population 35,000 — that measure W could be decided
    by a few thousand voters.
    Approval would not automatically mean the transfer of Golden State into public hands. If a sales agreement cannot be negotiated — and Lowe said the water company would fight the sale — it would require the city to go to court to acquire the water system through an eminent domain process. Absent an agreed upon price, the value would have to be determined by the court.
    That uncertainty is chief among the reasons measure W advocates stop short of promising city
    control would enable rates to be lowered. The city estimates a price of $80 million would be
    the break even point. Below that, rates could be lowered. Above, rates would have to be raised.
    At $135 million, the city estimates the typical bill would increase by $24, Pedroza said.
    Nevertheless, advocates see value in obtaining local control.
    "It's not about whether rates go down," said Crocker. "It's about owning with a reliable partner."
    Claremont is not Golden State's only service area. Throughout California, it serves 255,000 customers in 75 communities in 10 counties, according to its website. A trade association for the CPUC regulated investor owned water utilities, the California Water Association (CWA), counts Golden State among its 115 members.
    "It's a well managed company," said Jack Hawks, CWA Executive Director. He believes the motivation to take Claremont's water service public may be "ideological." 
    Besides a distribution network, Golden State operates a series of wells that provide approximately half of Claremont's water. The other half is purchased from the Metropolitan Water District, which imports water from the Colorado River. That balance has shifted somewhat during the drought, with water costs rising.

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