City of Claremont issues new statement on Golden State Water study
Late last year, Golden State Water Company, the for-profit water company that serves Claremont residents and businesses, released an economic study they commissioned in an attempt to discredit the city’s potential acquisition of the Claremont water system. Dr. Rodney Smith, who has also recently contacted media outlets attempting to portray the city’s recent offer to purchase the water system as inadequate and a risk to city finances, prepared the study.
“Regardless of the public affairs campaign being waged by Golden State Water, Claremont will continue to base all decisions related to the potential acquisition of the water system on facts and independent analyses. Too often we see lobbying groups and their surrogates release so-called “studies” to gin up press and promote the interests of their clients,” said City Manager Tony Ramos.
The study released by the investor-owned water company claims that Golden State is better positioned to provide water service than the city. Ironically, Golden State has been scrutinized in cities throughout California due to exorbitantly high water rates. In fact, the company has filed for yet another rate increase of nearly 25 percent in 2013. While Claremont residents are being forced to shoulder consistent rate increases, Golden State continues to compensate its top executives with millions of dollars in salaries and other benefits. Notably, Golden State is entitled to receive a rate of return above and beyond the cost of providing water service, which municipal water utilities are not allowed to do.
“The city is exploring all of its options regarding the potential acquisition of the water system. Most California residents receive their water service from municipal and other publicly-owned and operated systems, and at much lower costs and with greater control than what the city is experiencing with Golden State,” Mr. Ramos said. “Claremont is somewhat unique in that we have an investor-owned company in charge of our water system, which is not accountable to the ratepayers. Claremont residents and businesses deserve more, now and in the future.”
In addition to the independent appraisal conducted to determine the fair market value of the water system, economic factors including operation, financing and system management costs and benefits are being carefully examined by the city.