The City Council began exploring alternatives to a privately owned water system in Claremont several years ago in an effort to best suit residents’ needs. As part of those considerations, the City Council commissioned a study to determine how much it would potentially cost to purchase the Claremont water system, currently owned by Golden State Water Company. The City hired a certified utility appraiser to prepare an analysis of the value of the water system. After thorough study, the expert concluded that the value of the water system was just over $55 million. Based on the appraised value of the system, the City offered Golden State Water the fair market value to purchase the Claremont water system, an offer the company rejected.
This week, Golden State Water released an engineering report valuing the replacement cost associated with the Claremont water system at $222 million--six times the amount the company has invested in the Claremont water system and four times the appraised value. While the City engaged a certified appraisal expert as directed by state law, Golden State Water hired a consultant to produce an engineering report. The company’s engineering report is very different than the City’s actual appraisal in that the report didn’t determine fair market value. Rather, it calculated the costs associated with replacing every single component of the water system, incorrectly inflating a potential purchase price. Simply put, it’s an apples to oranges comparison.
For more information,please visit the City’s webpage at: www.ci.claremont.ca.us