Is purchasing Golden State Water even worth it?
Viewpoint by Tobias Hecht
In offering to purchase the water delivery system from Golden State Water Company for $54 million, the city of Claremont has stated that it is seeking fairness in water service and rates. These are reasonable goals. It is also true that many other municipalities successfully administer their own water. Yet there are some difficult questions to be asked.
First, is water expensive in Claremont? We are a family of 3. We bathe every day, wash clothing and dishes, drink and do everything else that other people do with water. Our bill has been well under $30 per month for the past 4 months, or around 33 cents per day per person. That doesn’t strike me as extortion.
It has been raining, so recently there has been almost no need for irrigation, but living in a semi-desert environment, sprinklers are a choice, not a necessity. One can landscape with plants that require almost no water, and more and more residents do just that. It seems reasonable that if you want a big lawn or a swimming pool that it should cost you more than 33 cents per day. It is also worth asking whether making water any cheaper than it is would even be desirable, given the scarcity of water in southern California and the environmental consequences of using it with little thought to the cost.
Is service poor? As a 20-year resident of Claremont, I have had access to potable water 24 hours a day, every day. I have never had or heard of a problem in service delivery. Considering the billions of people around the world who lack access to water—even undrinkable water—in their homes, it is hard to understand where the complaint about service comes in.
Are the rates unfair? We do pay somewhat more than those in surrounding communities and if that is your only measure of fairness, then the rates are unfair. Yet if one stops to think that the median family income in Claremont is more than 50 percent higher than in Pomona (where the unemployment rate is nearly double ours) one can be certain that our neighbors pay considerably more, in proportion to their income, than we do.
What is unfair and profoundly irresponsible about the Golden State Water rate structure is that it punishes conservation and awards waste: Those who consume the least (generally those with limited resources) subsidize the most profligate. It isn’t obvious if you look at your bill, because the rates seem to go up as one consumes more water. But those who believe that are forgetting something. The water company assesses a “service charge” just for providing water. What it means in practice is that the first gallon of water costs us over $12. The last gallon, even for the most extravagant of consumers, costs a fraction of a penny. In effect, unless you are filling an Olympic-sized pool, the more you waste the cheaper the total amount of water you use becomes—gallon for gallon. This is regressive and wasteful.
If the city’s offer is accepted, the city would pay the equivalent of more than $1500 per resident to buy Golden State Water Company (there are only 35,000 of us to put up the $54 million, the math is simple). If the purchase leads to lower rates—and of course it is possible it will not—how long will it take to amortize the investment? If my household bill were cut by one-third (which is a long shot if you look at the experience of other cities that have taken over water administration), it would require 37 years to break even on the investment of $4500 for the 3 of us—and that is assuming zero inflation.
Finally, we must also ask, what else could we do with $54 million? A lot. We could provide free day care for all children under 5. We could offer the best hospice service in southern California. We could give our overworked teachers a break by paying for assistants. We could even give every household that gets rid of its lawn a few thousand dollars; for most people that would cut the average summer bill by half or more, ultimately saving rate payers a lot more money than the city’s plan would. We could do many things. If the city gets its wish, however, the best we will be able to do is waste a precious resource with even greater abandon.
—Disclaimer, I don’t work for Golden State Water or know anyone who does. I have no financial ties to the company, either.