As we begin a new year, the city of Claremont continues to evaluate the potential acquisition of the Claremont water system. Unlike the majority of residents in California, our residents are currently required to obtain their water from a for-profit company, Golden State Water. As a result, Claremont residents and businesses are required to pay higher rates for water than those of our neighboring cities. In addition, Claremont ratepayers are subject to paying a surcharge if Golden State’s profits are reduced because of water conservation efforts.
Golden State Water has failed to provide our community with a plan to address the skyrocketing water costs and rate increases in Claremont, the city council allocated the necessary resources to examine and analyze a potential acquisition of the system. If the city were to acquire the system, water rates would be established locally by elected officials who are accountable to our residents. Such accountability does not currently exist.
While Golden State Water is now forcing the city to defend litigation and incur substantial costs, they continue to raise rates and will continue to seek additional rate increases from the California Public Utilities Commission.
Where are we now? At the town hall meeting in November, with hundreds of residents in attendance, and more watching online, the Claremont City Council unanimously directed staff to prepare additional documents necessary to potentially acquire the water system. Along with the required documents, there are several other steps that would be completed this year in connection with the potential acquisition of the water system, including:
• Publish a Draft Environmental Impact Report (EIR) for public review and comment.
• Complete a Final Environmental Impact Report (EIR) and conduct a public hearing on the Final EIR.
• Council discussion on operations, including water system management.
• Conduct a public hearing on a Resolution of Necessity to acquire the water system.
• Consider a Resolution of Intention to Form a Community Facilities District (CFD).
• Consider a Resolution of Intention to incur bonded indebtedness.
• Conduct a Protest Hearing on Formation of a Community Facilities District (CFD).
• Form Community Facilities District (CFD), call and hold an election.
• Declare the election results (2/3 votes needed to issue bonds)
As presented at the town hall meeting, the current water rate structure is projected to support a sufficient bonding capacity that would permit the city to acquire the water system for its estimated fair market value. However, additional funding would be required to respond to legal challenges brought by Golden State Water and to cover potential pre-acquisition and acquisition costs funded through the Community Facilities District should those costs exceed $80 million.
Unlike the decisions made by a for-profit water company, decisions made by municipal water providers are subject to the state’s open meeting laws and are made with the public’s participation. The city will continue to be transparent in all of its decisions related to the potential acquisition of the Claremont water system, and we urge our residents to stay involved. A complete list of the possible future decisions and actions, along with other materials related to the potential acquisition can be found at www.ci.claremont.us.ca.
Tony Ramos, City Manager