City makes offer to purchase Golden State Water Company
The city of Claremont has made an offer to purchase Golden State Water Company, according to a press release just received from the city’s Public Information Officer Bevin Handel.
The press release is printed below, in its entirety. The COURIER will have a complete story online on Wednesday.
“The City of Claremont today transmitted an offer to Golden State Water Company to purchase its water delivery system and assets in Claremont for $54,067,000. Golden State Water is part of a privately-owned, publicly-traded company that serves water to residents and business owners in Claremont.
“The offer made by the City is based on an inspection of the Claremont water system and an independent appraisal that was prepared in accordance with State law and accepted appraisal procedures,” said Claremont Mayor Larry Schroeder. “The offer made to Golden State Water is for the full amount of the current fair market value of the utility system and its assets.”
The Claremont City Council unanimously approved making an offer to Golden State Water based on the appraisal. The water system services all of Claremont, as well as small portions of the cities of Montclair, Pomona, Upland, and adjacent areas of unincorporated Los Angeles County.
“Our Council remains committed to ensuring that Claremont ratepayers are treated fairly when it comes to water service and rates. As we move forward, City staff will continue to evaluate and examine a variety of options to cost-effectively manage and finance the potential water system purchase,” said Mayor Pro Tem Opanyi Nasiali.
The offer transmitted to Golden State Water includes a state-mandated provision permitting them to be reimbursed up to $5,000, if they choose to have a separate independent appraisal conducted.
“We are looking forward to meeting with representatives from Golden State regarding our offer. It’s time for a meaningful discussion regarding the future of water service in Claremont,” said Councilman Corey Calaycay. “To merely claim the water system is not for sale will not serve the best interests of ratepayers in Claremont.”
Also included in the offer is information on California’s eminent domain process. Notably, however, the appraisal of the water system and offer made to Golden State Water does not trigger the eminent domain process which would require separate Council authorization.
“Our entire Council is committed to ensuring that ratepayers in Claremont have access to water at rates that are fair, transparent and reasonable. The offer to purchase Golden State Water is a key step in ensuring that Claremont residents will have control over the future of water service for their community,” said Councilman Sam Pedroza.
Golden State Water recently submitted a rate increase application to the California Public Utilities Commission (PUC) seeking a 24.54% increase in 2013 with additional increases in 2014 and 2015. The PUC enables private water companies to receive a rate of return on their investment. Such profit guarantees are not available to municipally-owned water systems, nor do they pay dividends to stockholders.
“Today is an exciting day for current and future generations of water users in Claremont. I believe that decisions regarding water rates and system maintenance should be made locally, not by corporate executives interested only in maximizing the rate of return for private investors,” said Councilman Joe Lyons.”