It was a splashdown at Claremont’s city council meeting Tuesday night when councilmembers voted to reject the proposed Memorandum of Understanding between Golden State Water Company and Claremont Affordable Water Advocates.

“My colleagues and I rejected the proposal as it was not a legally enforceable document nor in the best long-term interest of the ratepayers,” said Mayor Joe Lyons in a press release issued by the city. “We are calling on Golden State Water to come to the table and negotiate directly with the city and provide residents with a real solution to the community’s ongoing water rate increases.”

At the council’s request in June, city staff explored the feasibility of entering into a Memorandum of Understanding (MOU) with GSW and presented an item-by-item analysis, including the city’s response, for each point of discussion. Although city staff stated that the goals of the MOU appeared to be “a good start,” they said the major downside was that it’s unclear how or by whom this MOU would be enforced, and does not discuss how rates will be addressed after 2022.

At a cost to the city of $13,000, city staff and legal counsel took great care in reviewing the MOU, city staff said, opening discussions with GSW based on the original MOU between GSW and Claremont Affordable Water Advocates. In reviewing the MOU, the city’s legal team had serious concerns and reactions to several points, including GSW’s claim that they plan to lower water bills, offer local control, pursue water conservation, offer WRAM alternatives and support locals schools.   

Although the MOU proposed a new rate structure for residential customers, it failed to explain what impacts the proposed rate structure would have on other ratepayers, such as local businesses. 

“There’s nothing in there about business rates. I’m probably the largest water ratepayer in this room,” said Claremont DoubleTree hotel General Manager Andrew Behnke. “I’m shocked Golden State is not here. The presence in this room speaks volumes about who’s serious about water and who’s not.”

North Claremont resident Mark Sterba took to the podium and identified himself as a CAWA member, encouraging the council to continue discussions with Golden State Water. Mr. Sterba revealed that his goal of joining the grassroots group was to get GSW and the city talking once again and he feels that goal has been accomplishedm although he admits more work needs to be done.

“Three things are important to me when it comes to water,” explained Mr. Sterba. “Quality of service, reliability and price. Golden State has provided two of those. The MOU was supposed to give the city guardrails on how to get to the third one, which is effectively giving us an affordable price of water. I encourage you to move forward with the evaluation MOU and to look for ways to reduce water prices for our residents and to people like the DoubleTree, I don’t want them to pick up the extra pieces.”

In response to the city’s rejection of the proposed MOU, Denise Kruger, Senior Vice President of Regulated Utilities at Golden State Water Company issued the following statement to the COURIER:  

“We have stated from the beginning that we are committed to working cooperatively with city officials to reach a compromise that will avoid a costly and divisive eminent domain fight. We believe a solution can be achieved and are ready to work toward that if their willingness to negotiate is real.”

Claremont officials say they remain open to negotiations with Golden State. However, if an agreement isn’t reached within the next couple of weeks, the city will move forward with the possible acquisition of the water system, seeking voter approval to issue water revenue bonds to finance the purchase.

According to city attorney Sonia Carvalho, the deadline to pull the ballot measure from the November election is August 6.

City staff has said the city can support an $80 million purchase price through current revenues collected from water bills. The proposed bonds would give the city an additional $55 million toward the potential acquisition of the Claremont water system, should a judge or jury value the system over $80 million.

—Angela Bailey

news@claremont-courier.com