City makes water offer, Golden State not impressed
The city of Claremont has made an offer of $54 million to Golden State Water Company for the purchase of the city’s water system and assets, according to a city press release sent Tuesday evening.
The price of the city’s offer is being released 2 weeks after City Attorney Sonia Carvalho’s announcement that the city council had unanimously decided to make an official proposal to the privately owned water company. The amount was kept under wraps while a formal letter was drafted.
The price point of the offer was determined based on an appraisal of the system and a feasibility study conducted by RW Beck, an independent contractor hired by the city of Claremont earlier this year. The firm was hired in 2004 to conduct a similar feasibility study, but continuing on in purchasing of the water system failed to secure a majority council vote. Former Councilmember Jackie McHenry had cast the dissenting vote at that time.
The current council maintains that it is committed to acquiring its water system this time around, whether through civil negotiations with Golden State Water or by eminent domain.
“As we move forward, city staff will continue to evaluate and examine a variety of options to cost-effectively manage and finance the potential water system purchase,” said Mayor Pro Tem Opanyi Nasiali in a statement.
Councilmember Sam Pedroza recognized the strong likelihood of eminent domain.
“Every option is on the table,” added Councilmember Sam Pedroza. “I don’t think the council would have gone this far [in the process] if we hadn’t already considered [eminent domain] in our own heads.”
Just hours after Mr. Pedroza’s talk with the COURIER, Denise Krueger, Golden State Water’s vice president of regulatory affairs, reiterated the company’s desire to maintain Claremont’s water service in a response to the city’s $54 million offer.
“Clearly this offer is not serious, because the city knows that the system is not for sale,” Ms. Krueger said in a statement.
“The city’s position suggests that they do not understand the true costs or financial responsibilities associated with providing reliable quality water service,” the statement continues. “A $54 million offer does not at all account for the quality of the infrastructure, the value of the water rights or reflect estimates made by a third party more than 6 years ago.”
In addition to its offer of $54 million, the city states it has offered up to $5,000 in reimbursement to Golden State Water should they opt for an independent appraisal separate from the one conducted by the city. The reimbursement is part of a state-mandated provision.
“To merely claim the water system is not for sale will not serve the best interests of ratepayers in Claremont,” said Councilmember Corey Calaycay. “We are looking forward to meeting with representatives from Golden State regarding our offer. It’s time for a meaningful discussion regarding the future of water service in Claremont.”
Water rights omission leaves something to be desired
Absent from the press release, however, is how the city’s water rights will be handled. While infrastructure is part of the equation—Golden State owns Claremont’s 23 wells—the water rights are a vital piece to the water system purchase, according to Claremont residents Freeman Allen and Marilee Scaff.
“Water is the real prize, not the pipes,” Ms. Scaff said. “If we don’t preserve our water rights—the right to pump the water—we are in trouble.”
The city of Claremont uses an estimated 13,000 acre feet, or 4.2 billion gallons, according to a study conducted by the League of Women Voters in 2004. Well water, pumped through the Six Basins Aquifer, accounts for 50 percent of Claremont’s water. That percentage fluctuates from 60 to 40 percent depending on the level of rainfall.
Water rights are needed in order to pump water from those wells, allocated through the Six Basins Watermaster, the agency that oversees the aquifer. In 1999, the watermaster determined who had the right to pump that water and by how much. The city of Claremont was given 2.8 percent and Golden State Water was given 34.7 percent. Pomona College and other local cities make up the remaining amount.
In 2004, when the city last attempted to purchase the water system, negotiations with Golden State Water included $50 million for infrastructure and $36.7 million for its portion of the water rights. While the city has made its offer on the infrastructure made known, residents remain in the dark about the rights to pumping the water.
“From what’s being said we don’t know what [city officials] have in mind and I am eager to know,” Ms. Scaff added. “Maybe they have another plan, but in any case it is frightfully important that it is included in negotiations.”
City Manager Tony Ramos refused comment on how the city is handing the water rights, stating that since the city is in the middle of negotiations it is “privileged” information. While the city’s intent to purchase its water system has been a fairly open process since it began a little over a year ago, the city has recently taking to closed session meetings as officials meet with consultants on how to move forward with negotiations.
“We do not want to release information regarding our negotiation strategy,” Mr. Ramos said of why the city is not commenting.
The city’s legal team did not return requests for comment on how the city is handling the water rights or why the city is not releasing information. The COURIER has placed a second request for the Feasibility Study surrounding the city’s latest offer for purchase of the water system. The first request was denied by City Clerk Lynne Freeman based on the Public Records Act, which exempts the city from disclosing information on real estate appraisals or feasibility estimates relating to an acquisition until the real estate is obtained.
While the price of the city’s offer was consistent with what many expected for the infrastructure, what was not expected was the city’s silence on the water rights. Who has the right to pump water for the city of Claremont is an important question that needs to be answered.
“It hardly makes sense to buy the system and then let Golden State Water manage it,” Mr. Allen said. “I’d like to see the question of how the water rights will be handled answered.”