Some actual facts about acquiring the water system
by Susan Schenk
Well, is anyone surprised that another Golden State-backed group (“Stop the Claremont Water Tax”—more on that name below) has emerged to oppose our buying the water system?
Unfortunately, like the former group, this one has also misunderstood the publicly-available information, resulting in misleading assertions in last week’s Viewpoint. If we conduct a “thoughtful engagement of issues based on facts,” as they suggest, it would show the following to be true:
Fact: The measure is not a tax. That basic misunderstanding is actually part of the name of the group. The proposed funding is through revenue bonds, which would be repaid through the water bills. This is fairer than a tax because even tax-exempt users pay.
Fact: Water bills will not increase $100 a month (or $1217 a year). If the cost of the system is $55 million (the appraised value), rates would actually go down. That may be unlikely but we could cover almost $80 million in bonds just by paying the city what we currently pay GSW.
At over $80 million, rates would go up at first but then become less than we would pay GSW as the bonds are paid off. So $100 per month (or $1217 per year) can’t possibly be accepted as a fact since we do not yet know the actual cost of the system. In addition, this “calculation” didn’t take into account the savings from not paying high GSW salaries and profits.
Fact: The cost of the purchase will not be divided equally among all households. It will not be “one size fits all.” People who use less water will pay less than those who use more water.
Fact: The city of Felton did not pay 250 percent more than the assessed value of the system. The official appraisal of the system was $7.6 million and their water company agreed to settle for 76 percent more than that (and Felton water bills are a lot lower now than if they hadn’t bought the system—see www.claremontflow.org).
Fact: The cost of the system is unlikely to be as much as the bond allows. The expected cost of the system is not $135 million. A court will set the final cost of the system based on ‘”fair market value.” The accredited appraiser valued the system at $55 million. A slightly larger Golden State Water system in Arizona recently sold for $34 million.
Fact: The cost assessment that was paid for by GSW is not more accurate than the city’s. The city used an experienced and accredited appraiser to determine the system’s value and payback schedule. Accredited appraisers are professionally bound to give reliable results. GSW has not produced a certified appraisal. So, which is likely to be biased: a report paid for and published by a company that doesn’t want to sell, or one produced by an accredited appraiser for a city that was simply looking for information to determine what it should do?
Fact: The purpose of Measure W money is not to improve the water system. Measure W is for purchasing the system and associated costs. Of course, as soon as we own it we can use the water bills to fund improvements, just like GSW does now. These costs aren’t separate from the water bills; they have always been included in them. And isn’t GSW the one who has boasted on several occasions about what good care they are taking of the infrastructure? So are they saying they didn’t tell the truth? Moreover, we will have a contingency fund for unexpected expenditures.
Fact: Our water bills will include fees for water usage and for maintenance just like the ones from GSW do now, but they won’t include the money that now goes to pay for high GSW salaries, shareholder profits and corporate taxes. Those monies will instead pay for a large part, if not all, of the bond debt.
Fact: The city council will not set rates without consulting the residents. One of the benefits of owning the system is the ability to make the water bills simpler and transparent. The city has committed to doing this and will not increase water rates without citizen input. Contrast this with our unsuccessful protests to the PUC about rate and surcharge increases, and the 14 pages explaining the various charges that go into our bills from Golden State.
Fact: La Verne water bills are much lower than ours. La Verne has provided high quality water and kept its infrastructure in good repair for 100 years while charging its residents much less than we pay in Claremont. Why shouldn’t we be able to do the same? Why remain a GSW “cash cow?”
Join the many hundreds of residents of all persuasions who support owning the water system. You can find more info at www.claremontflow.org as well as on the city website.
Vote “YES” on Measure W.