Nov. 8, 2012
Angelique LaCour, OVN correspondent
If a proposed takeover of the Golden State Water Company’s Ojai service area moves forward, the effort will likely be funneled through a Community Facilities District (CFD).
In July, the Casitas Municipal Water District’s (CMWD) five-person board of directors voted unanimously to retain the services of a consultant to explore the structuring of a CFD to facilitate the purchase or eminent domain condemnation of the company’s Ojai branch and its assets.
“What we have done so far is hire a consultant to look at the formation of a CFD,” CMWD Attorney John Mathews said. “If, in fact, that goes forward we will then value Golden State’s assets.”
Because the issue of water rights could swing the cost of the purchase several million dollars either way, the Casitas Board has retained special counsel Jeff Oderman, who specializes in water rights, to help with the process.
According to Mathews, an individual has what is called correlative rights to withdraw groundwater from their property, but whether or not those rights are compensable can be argued.
“I may own a piece of property, but I don’t own the water until I capture it by installing a well and pumping it,” Mathews said. “Unlike oil, the law doesn’t like to see water rights severed from the property.”
In the closing weeks of the Tuesday’s election Casitas Board candidate Troy Becker received a letter from Golden State Water Company spokesperson Mitch Zak requesting he correct “inaccurate facts” in his campaign materials regarding the company’s water rights.
In his letter to Becker, Zak wrote “Your assertion that Golden State has no water rights is wrong. Case law is clear and unambiguous: a water right is a property right protected by the Fifth Amendment.”
Casitas Municipal Water District board member Russ Baggerly, who defeated Becker and Jerry Conrow to return for a third term on the five-member panel, has his own opinion about the issue of water rights.
Baggerly claims that a true water right is granted by the state, which holds all water in trust for the people, to divert, store, treat and distribute. The law requires that groundwater be shared among agricultural, domestic, industrial and recreational users.
“Property rights advocates misquote California law when they state that a landowner has an absolute right to the beneficial use of all groundwater. The right is to use the water only,” Baggerly said. “Saying you can put a monetary value on those rights is an opinion, but not necessarily a legal one.”
At a community meeting Golden State held last year in Ojai, GSW attorney Joe Conner, took issue with the 57-page financial feasibility report authored by Friends of Local Owned Water (F.L.O.W.) director, Richard Hajas.
“The F.L.O.W. report says that Casitas will have to acquire our water rights,” Conner said. “And they will have to pay for that.”
Ojai F.L.O.W. was formed two years ago for the purpose of ousting Golden State, and the citizens group is hopeful that the Casitas board will act soon on the decision to form the CFD and set up the Water Rescue Bond structure. To riase the money necessary for Casitas to buy out the privately-owned company, two-thirds of the voters who live in the proposed CFD boundaries must approve the bond measure.
The city of Claremont recently offered Golden State $54 million as the fair market value of its water system.
According to Golden State’s website the Claremont Customer Service Area serves approximately 11,100 customers in Claremont and portions of Montclair, Pomona and Upland. The company serves approximately 2,900 customers in Ojai.
“Each water system is unique and different,” said F.L.O.W. director, Ryan Blatz. “We do not know the specifics of how this number was ascertained.”
“Andy Belknap (former Ojai city manager) used to call the election season the silly season,” Baggerly said. “The eminent domain process is going to be equally crazy. You will see a lot of moving papers by Golden State in court to try to slow down, change or obfuscate the issues.”
If Casitas decides to move forward with a takeover, and is unable to negotiate a sale with Golden State, condemnation proceedings will be initiated. This means that a jury will ultimately decide Golden State’s value.
“I wouldn’t recommend Golden State put their value in the hands of a jury,” Becker said. “There’s not a jury in California that’s going to side with these guys.”
The other members of the CMWD Board are Mary Bergen, Pete Kaiser, Bill Hicks and Jim Word.
Nov. 8, 2012