Readers comments 9-19-14
No gas, no problem
As a new 100 percent Battery Electric Vehicle (BEV) owner, I want to publicly thank the city of Claremont for doing what many cities around the southland have yet to do. That is installing Electric Vehicle (EV) charging stations in the city center. There are two by city hall and two in the Packing House.
I just bought a BMW i3 BEV and although I will charge it at my Claremont home, it is good to know that those visiting here can easily juice up while they partake of our events, shops, food and fun. I often look to see which distant communities have charging stations and then I plan trips there because I can easily plug in and walk around.
The train, our walkable city plan, the bicycle amenities, EV chargers and a few bus lines, make Claremont a good place to visit. And there are EV chargers at Rancho Santa Ana Botanic Garden and the college parking structure on First Street!
While we still have challenges to solve, I think Claremont has improved in the 13 years I have lived here. If you want to learn more about EVs, make your way to Huntington Beach this Saturday, September 20 for the National Drive Electric Week event. All kinds of electric vehicles will be there from skateboards to cars to buses. Maybe you’ll decide to save money and gas with an EV!
Where is Golden State?
Thank you to the Claremont Chamber of Commerce and the DoubleTree Hotel for recognizing the importance of Measure W, which will be on our November ballot. I appreciate you putting a panel discussion together and inviting non Chamber members to educate the business owners about the recent water issues. This is a significant issue for residents and business owners in our town.
The elephant in the room today, and the question that wasn’t asked was, where was Golden State Water?
If you go to the GSW website it states that, “Golden State Water has proudly served the community of Claremont for more than 80 years…Golden State Water is committed to Claremont.”
What company in today’s world doesn’t seek or treasure time in front of their customers? Or, are we truly just the funding source for exorbitant executive pay and the record string of shareholder dividends?
Yes, I recognize that things didn’t go well in the last public setting when GSW tried to answer Claremonters’ questions. Who can forget that now-famous November 2013 COURIER photo of a GSW executive with her shoulders shrugged and palms up in the air, and the caption, “…has no idea how much the company pays her.” Yes, things didn’t go too well. But today’s decision to no-show was a peculiar way to act for a company that has “proudly” served Claremont for more than 80 years.
Even though GSW chose not to be at the panel discussion, their actions speak volumes.
Pour cold water on Measure W
Measure W proponents understand that putting the water system in the hands of local officials won’t do anything to reduce cost or improve water service. Move aside the heightened rhetoric, look closely at the facts and you’ll learn that takeover supporters are urging residents to pay $135,000,000 to have “local control,” and higher water bills.
Measure W will increase costs for every Claremont family. Your water bill will increase. One local expert estimates the measure will increase your monthly water bill by more than $100 and that’s in addition to the cost of your water service.
The hefty bond will mean city indebtedness for decades. Additionally, the ongoing legal costs mean fewer resources to spend on other critically important city services.
Bottom line, if you’re dissatisfied with your water bill now, don’t expect anything but higher costs in the future if Measure W passes.
Donna S. Lowe
Revenue bond reality check
Back in March, when our city council was considering the various options for the financing of the acquisition of the water system, I was curious to know why revenue bonds were not being used for the prospective takeover of the Ojai system. I found the following statements in the Ojai feasibility study:
“The disadvantages of the Revenue Bond option are [that] the interest rates on this type of bond may not be as attractive as bonds secured by property tax and the repayment would not qualify as a tax deduction.
“The other disadvantage is these bonds could not be secured by the revenue from the water surcharge until CASITAS completes acquisition. CASITAS would have to cover the up-front legal costs associated with the acquisition until acquisition is complete. Bond proceeds could then be used to reimburse CASITAS. Another important concern is that the volume of water sold by GOLDEN STATE varies from year to year based on a variety of conditions. All revenues based on volume of sales will also fluctuate year to year, while the debt service will remain constant.”
Those are all relevant concerns for Claremont. I also sent an email to the leaders of Ojai FLOW, asking them why they had decided to use Community Facilities District (CFD) bonds instead of revenue bonds. I quote in its entirety the reply of Pat McPherson, Chair of the Ojai FLOW Steering Committee:
“The answer is very simple, we found the interest rate on revenue bonds to be much higher than on CFD bonds. For CFD bonds, there is very little risk of default. However, with revenue bonds, the risk is higher because of conservation and/or other factors.”
I received a separate reply from Robert Daddi of Ojai FLOW, which was premised on the erroneous assumption that repayment of Claremont’s revenue bonds would be backed by the city (a mistake he repeated in his letter to the COURIER last week). The only source of repayment for the Measure W revenue bonds will be the net operating income of the newly-formed water utility.
The city of Claremont is not securing the repayment of the bonds with its taxing authority, and will not be liable in the event that the utility cannot pay its debts. The city attorney will confirm this for anyone who cares to ask, or you can read it in the ballot measure staff report on the city website.
It is an open question whether Claremont can sell revenue bonds at all. This appears to be a one-of-a-kind transaction, and the city has not identified a single investment bank that would be willing to underwrite our bonds. And if we can’t sell the bonds, we will have wasted millions of dollars in pre-acquisition costs for nothing.
The citizens of Claremont should not have to guess whether revenue bonds are a viable financing solution. Everyone, including the most ardent supporters of the acquisition, should insist that before we put another dime into this deal, the city council must verify that investors will actually buy these bonds on terms we can afford to pay.
A forbidden fruit?
In the Chamber of Commerce Water Forum on Tuesday morning, Mark Sterba of CAWA compared the salaries of the president of Golden State Water and the CEO of Apple and indicated they were comparable in value when asked about excessive compensation. This was met with great disbelief.
Water is a necessity of life, not a commodity, and Apple products are commodities, not necessities of life. Although my husband, Michael, and many others think both are necessities of life.
Karen M. Rosenthal
Due diligence is done
I support our city council’s effort to acquire the water company. The council and city staff have done their due diligence on this issue on behalf of the residents of Claremont.
The same criticisms about the proposed purchase have been stated many times over in the pages of the COURIER. The arguments in support of the purchase have similarly been reiterated. The most recent letters in opposition add nothing new. He said, she said. Who to believe?
I choose to side with the city on this issue because the five council members who, in fact, represent many different constituencies in our town, have determined this effort to purchase the water company is in the best interests of the residents of Claremont.
Because it is a business, Golden State Water Company makes decisions that are in the best interests of its shareholders, not community residents; those shareholders expect the business to make a profit.
I much prefer local control of such a valuable resource as water. As to its due diligence, the city has:
1) held many public forums to get resident input on the issue;
2) examined funding options and consulted bond experts to find the option that is most attractive to buyers and spreads the cost most fairly;
3) entered discussions with a nearby city, that owns its own water system, to manage our water system;
4) negotiated with GSW to reduce the number of potential lawsuits that would have increased the time and cost of eminent domain proceedings; and,
5) authorized a feasibility study to determine the worth of the system, which reviewed data from GSW about income and infrastructure condition.
Claremont has always been my home. I love this community and I believe this effort to purchase the water company is a reasonable and carefully calculated risk that we must take.