Claremont Moves Toward Acquiring Water System
Saahil Desai | Nov. 7, 2014, 11:25 p.m.
For proponents of Measure W, Tuesday night saw little of the anxiety that typically overwhelms election-viewing parties. A group of roughly 50 area residents—including the mayor, council members and the city manager—crowded a room of Claremont’s DoubleTree Hotel to track the results and began celebrating their victory with only a few precincts reporting.
A response to anger over Claremont’s ballooning water rates, Measure W permits City Hall to initiate the lengthy process to evaluate and likely purchase the city's water system from Golden State Water Company (GSWC), the corporation that owns the system. The measure specifies that the City of Claremont may borrow up to $135 million in bonds to purchase the water system from GSWC and pay for legal fees that may accumulate in the process.
Both advocates and opponents of the initiative ran spirited campaigns, but at the polls the measure received resounding support from Claremont residents: 71.38 percent of the 8,568 total voters supported the measure, according to Los Angeles County election records. Of the total numbered of those registered in Claremont, 41 percent voted.
In a speech, FLOW (Friends of Locally Owned Water) Chair Helaine Goldwater attributed the measure's success to the organization’s ability to mobilize a diverse group of supporters spanning the city’s social and ideological spectrum.
“The city has already won,” council member Sam Pedroza said before the results of the election had been formally announced. “Measure W has brought together Claremont in a way that has never been seen.”
However, not all Claremont residents are convinced that public ownership of the water system will help constrain the costs of water bills.
“I think the city’s too controlling about a lot of things,” said Ken Bishop, a Claremont resident for 20 years, after voting 'no' at a polling station.
Bishop worries that Claremont lacks the expertise to manage the system effectively and that the acquisition fee of the system will lead to higher water rates.
He mentioned a study conducted by Rodney Smith, a former Claremont McKenna College economics professor who was commissioned by Golden State to report on the financial repercussions of the measure. Smith's report indicated that Claremont residents would pay an average of $1,000 more per year in water fees if the water system were acquired by the City of Claremont.
Michelle Lange and her father, Wilton Lange, Jr., who have both lived in Claremont for about 40 years, also voted 'no', based on concerns about the potential financial impact on homeowners and business owners.
“I’ll be 101 years old before that bond is paid off,” said Lange Jr., who said he regularly audits classes at the Claremont Colleges.
In a statement released by the company, Golden State’s Senior Vice President of Regulated Utilities Denise Kruger said that the company is "disappointed in the election outcome but remains unwavering in its belief that an attempt to take the Claremont system by eminent domain is not in the best interest of the community."
“Passage of Measure W does not change the reality that the eminent domain process being pursued by the City will result in higher water costs for Claremont," she added.
If all goes according to plan, the City of Claremont will begin the eminent domain proceedings by the end of this year.
But those proceedings have a tendency to drag on, and a court must navigate between the divergent views of the two parties about how much Claremont should pay to acquire the system. An independent audit conducted by the firm NewGen Strategies & Solutions, LLC, on behalf of the City of Claremont valued the price of the system at $55 million, while Golden State maintains that the system is worth more than $220 million.
“All along, it’s this jockeying between the two legal teams as to what is in their best interest,” Claremont Mayor Joe Lyons said of the eminent domain process. “It’s quite a theater of sorts.”
While negotiations between Claremont and Golden State are always a possibility, a court ruling could take four years, Lyons said, and perhaps five with additional appeals.
A court ruling on the Claremont water system could have significant ramifications for the water industry. A city’s water system is typically valued based on the conjoined price of the water rights and the infrastructure, but Golden State could potentially attempt to increase the valuation by separating the two elements.
“This point of law has never been settled or addressed in a court decision, so it's a really big piece of the puzzle," Lyon said. "The water industry as a whole is going to be looking at this very closely, since they would like to see them separate.”
Advocates of Measure W may be at a liberty to celebrate their victory now, but there is still a long and likely tumultuous path to their goal of city acquisition of the Claremont water system.
“We won the first skirmish, but the real battles are still ahead,” said Marilee Scaff, a Claremont resident since 1947.