City, Golden State present opening remarks in eminent domain case
The city of Claremont and Golden State Water Company are finally going head-to-head over the future of the Claremont Water System.
Opening statements began this week before presiding Judge Richard Fruin at the Stanley Mosk Courthouse in downtown Los Angeles. Golden State Water’s attorney George Soneff presented on Tuesday and Claremont’s counsel Ken MacVey presented Wednesday.
Mr. Soneff’s main point during his more than two-hour statement was that there is no need to take over the system, since the city will essentially be operating at the same capacity as GSW.
“This is the first trial of its kind in California,” Mr. Soneff, of the Los Angeles-based firm Manatt, Phelps & Phillips, said. He also said the onus is on Golden State to rebut the four “resolutions of necessity” that Claremont adopted in November 2014 on the heels of passing Measure W, which allocated up to $135 million in bonds for a possible acquisition.
The resolutions of necessity paint a picture of why the city feels taking over the water system is in the public’s best interest, including conservation, local control, transparency and setting rates with community input.
If a rebuttal to any one of the four resolutions is granted, Mr. Soneff said, eminent domain is denied. “We intend to rebut all four,” he said.
Mr. Soneff delved into the “purpose” of Claremont’s claim, stating that taking it over and, in his words, providing the same service to the city is an inadequate reason to claim eminent domain.
“The plan is to step into Golden State Water’s shoes and hand the operating keys to La Verne,” Mr. Soneff said, adding that the city would provide no new facilities and the same number of employees—with some possibly coming from GSW.
“La Verne should be so lucky” to hire people with the same experience as GSW employees, Mr. Soneff said.
Mr. Soneff noted that it would take an experienced owner to deal with a water system he described as “quirky” and “unique” due to changes over the years.
Mr. MacVey, in his opening remarks, stressed that providing local control and enhancing customer service is reason enough to claim eminent domain. He noted that Golden State is taking a “narrow view” of the situation.
“We have a much broader vision, a much broader goal for Claremont’s future,” Mr. MacVey said.
Throughout the statement, Mr. Soneff described Golden State as an inextricable and vital part of the history of Claremont, from initial acquisition in 1929 throughout the city’s growth. He presented old articles from the COURIER that praised the work of GSW, then known as Southern California Water Company.
“Claremont is in this company’s DNA,” he said.
Municipal takeover, Mr. Soneff argued, would not be a sound decision for a city that has never operated its own water system. He also pointed out that larger municipal systems, such as the LADWP, have been experiencing pipe ruptures that could occur in Claremont, which could be costly.
Mr. MacVey, of Best, Best & Krieger, painted Golden State and the Public Utilities Commission as the “status quo,” with exorbitant rates that continue to rise without input from the city.
He also pointed to a deposition from GSW Foothill General Manager Ben Lewis, in which Mr. Lewis said GSW had no plans to use recycled, gray or storm capture water in Claremont. Mr. MacVey criticized Golden State’s lack of transparency, arguing that an entire water system master plan was drafted without input from the city.
During his opening remarks, Mr. Soneff praised the KANEW system as a way to detect the structural integrity of aging pipes and whether or not they should be replaced. Mr. MacVey countered by stating that many of Golden State’s top-level employees were unaware of the KANEW system and had no idea what it did.
Mr. MacVey noted that many wells in the city have not been operational for years.
In regard to water rates, Mr. Soneff argued that Claremont’s rates would increase under municipal control, citing the debt incurred from purchasing the system and La Verne’s 10 percent management fee, contradicting conclusions of a city meeting from 2013 that explained Claremont’s water rates would decrease over years. He pointed out a passage from the city’s environmental impact report (EIR), which states that, “The city has never presented a proposed decrease in water rates.”
Mr. MacVey argued that GSW’s rates are among the highest in the region, rates that increase every few years. He also condemned Golden?State’s use of the water revenue adjustment mechanism (WRAM), a system that adds charges to a customer’s bill if water levels fall below the target rate, even during a state-imposed conservation that required residents to use less water.
“Starting in 2009, Golden State was able to charge consumers for using less water,” Mr. MacVey said.
Ultimately, Mr. MacVey argued that taking over the water system is about local control, emphasizing that a water system controlled by a city is preferable to a third-party, for-profit company.
“The city of Claremont wants to have a say over its water future,” he said.
The trial is expected to last several weeks.