City expenses add up in extended legal battle over water

They say everything has a price. Even though Golden State Water Company contends that the Claremont system is not for sale, the company hasn’t stopped the city from figuring out how much the system is worth.

To date, the city of Claremont has spent approximately $2.2 million on issues related to the acquisition including two town hall meetings, three different offers to Golden State due to updated appraisals and numerous lawsuits, as well as rate increase protests involving the CPUC and negotiation meetings with the water company itself.

On Tuesday night, the price tag went up again as Claremont City Council appropriated an additional $1 million from the Water System Acquisition Reserve for expenses related to the eminent domain case against Golden State Water Company.

The funds, allocated from the 2013-14 General Fund Surplus, were set aside by council in October 2014 to address water-related expenses, including additional legal and expert consultant fees.

Claremont residents did their part as well to fund the purchase, taking to the polls last November with 71 percent of voters approving the issuance of water revenue bonds to finance the takeover.

To foot costs incurred after the November 4 election, the city council adopted a reimbursement resolution in December 2014, which enables the city to be reimbursed from the proceeds of revenue bonds issued to finance the water system acquisition.

Since November 2014, approximately $300,000 in reimbursable expenses have been incurred. When the revenue bonds are sold, all reimbursable expenses, up to a maximum of $5 million, will go back to the general fund, including the $1 million allocated by council Tuesday night.

Until that time comes, the eminent domain case against Golden State Water Company continues to move forward, with the city’s lawyers working to acquire the water system.

An amended complaint—as ordered by Los Angeles Superior Court Judge Richard Fruin on April 30—was filed June 27. Judge Fruin gave the city 60 days to re-file its complaint after Golden State sought to dismiss the case, stating that the property description and the city’s pre-litigation offer to purchase the water system were inadequate.

A case management hearing is scheduled for August 27, 2015.

—Angela Bailey


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