Measure W: Claremont water bond is focus of discussion

By Liset Marquez, Inland Valley Daily Bulletin

POSTED: 09/17/14

CLAREMONT >> Those on both sides of the city’s takeover of the local water system agree the issue is potentially years away from being resolved.

The first test will come Nov. 4 when Claremont voters will decide whether the city should leverage a $135 million bond – known as Measure W – to purchase the water system from Golden State Water Co.

If the measure passes, the next step in the eminent domain proceedings will be for the city to initiate a declaration of necessity – Claremont’s claim to acquire the system.

“It could take a number of years to come to fruition,” Mayor Joe Lyons told a group of residents and business owners gathered at the DoubleTree Hotel on Wednesday afternoon.

Putting aside how long it takes for the city to initiate the takeover process, there’s the issue of how long the trial will take as well as the appellate process, said Rod Smith, who was representing Golden State Water at the event.

Smith told those attending the panel discussion put on by the Claremont Chamber of Commerce that it could take between $5 million to $10 million on each side for the legal proceedings.

Speaking in favor of the takeover was Freeman Allen with Claremont Friends of Locally Owned Water, also known as Claremont Flow, while Mayor Joe Lyons only addressed questions that dealt with the measure. On the opposing side was Smith, who was joined by Mark Sterba with Claremont Affordable Water Advocates.

Claremont was proposing a $55 million bond measure to help with the acquisition if the cost of system acquisition were to exceed $80 million. City officials believe it can borrow revenue from a special enterprise fund — based on existing water rates and charges — that can result in earnings of $80 million, enough to acquire the system for that price.

Allen said the effort to take over the water company in Claremont is about creating transparency as well as control costs.

“We feel it doesn’t make sense to have it under monopoly control,” he said.

Lyons said the goal is to purchase the water system and place it in the public hands rather than for-profit agency. The goal for Claremont is “an affordable water system that stabilizes water rates,” he added.

Those opposed to the takeover efforts contend the city has failed to calculate what it would pay in principal and interest payments over 30 years and the bond obligation will dramatically increase resident water costs indefinitely.

Smith questioned how much residents could benefit from such a move, especially given the fact that this is a 100-year-old water system.

“You have to deal with the fact that water systems are complex and, as a result, you have to ask yourself what is the competence of the city to manage that,” he said.

Smith and Allen differed on whether a judge or jury would handle eminent domain proceedings if it were to occur.

Allen said it would not be a judge but what both parties decide. The trial will mostly likely be based on expert testimony and focus on the valuation of the system.

“It’s very likely that in an eminent domain proceeding, a jury or a judge will pay a lot of attention to the assessed valuation,” he said. “The water company has yet to provide an assessed valuation, while the city’s assessed valuation is $55 million. Both those numbers are likely to be very influential in the settlement.”

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