Reposte To Professor Williams

Water Facts

In November, Claremont will vote on Measure W to authorize the city to issue up to $135 million in water revenue bonds to acquire the local water system. The outcome will powerfully affect our future. Voters need to know the facts. Unfortunately, comments from Heather Williams (August 22, COURIER) mislead in several ways and readers may believe these are well-researched facts. They are not. For example:

“...the proceedings may last some years.” There is little water system precedent, but there is one. Felton, a California town of 6000, voted to fund eminent domain proceeding and acquisition of their water system. The water company settled before the case went to trial, in under three years from passage of the city’s bond.

“The city of Montclair, for example, tried to acquire its water system in the 1980s and failed.” That’s not so. Montclair has always been served by the Monte Vista Water District, a public agency with locally-elected directors. According to a person involved at the time, in the 1970s there was some interest on the city council for taking over the system, but not majority support and there was no action.

“Courts do not always agree there is an overriding public interest...” Where a water supply is at stake, it would be hard to conclude there is no public interest.

“Plaintiffs [here, that would be Golden State] get...what they estimate the property is worth and defendants pay...more than their highest estimation.” That may apply when peoples’ houses are condemned, but here the appraised value of $55 million is likely to powerfully influence the decision on the value of the system. (And Golden State is the defendant, not the plaintiff.)

“If the city allows, the system may cost $79 million...the jury may award $118.5 million...the new total, $143.5 million.” The appraised value is $55 million, not $79 million. An award of $118.5 million would not be expected.

“That’s $23,880 for each household to pay over the period of borrowing.” Even if the above extreme cost estimate were to apply, the savings on water bills that didn’t include GSW profits would cover most or all of the cost. This can be shown by comparison with water rates in neighboring cities. Why is this saving overlooked?

“Most importantly...the debt we incur...will constrain our ability to borrow for other things like schools...” According to experts in city finance, that is not so. These bonds will be paid with income from the water enterprise, a desirable low-risk investment for lenders.  And the bond money cannot be used for other things.

“It would function like a huge new tax.” Again, savings are overlooked. Water bills that no longer include company profits will cover a debt payment of up to $80 million, according to conservative city estimates. Bond payments will take the place of current charges, not add to them.

“If all water users are assessed equally for that debt, the rates for the smallest and most careful water users would rise 200 percent or more.” Even if the entire $135 million in bonds were needed and the monthly bill had to increase by $28, as the city estimates, no bill would rise as much as 200 percent since the lowest meter charge alone is over $16. And, again, savings are not considered. 

Both Heather Williams and Rodney Smith, PhDs with the Claremont Colleges, who hold professorial credentials in politics and economics, respectively, conclude in their publications that it would be foolish to buy the water system—but they don’t mention the well-known fact that water rates are lower in all our neighboring cities with municipal water systems, and these cities can be a model for Claremont. Why do they overlook facts, so obvious and important, that help make the case it does make sense to take over our water system?

Freeman Allen

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