April 5, 2013
Tim Dewar, email@example.com
Golden state Water Company (GSWC) has fired the latest salvo in its battle with its Ojai ratepayers and the Casitas Municipal Water District (CMWD) — a lawsuit to stop the Aug. 27 bond election.
Filed in the Ventura County Superior Court March 29, the suit asks the court to rule that the three resolutions required to form CMWD Community Facilities District No 2013-1 and hold the election be declared invalid; that the community facilities district (CFD) be dissolved; that the court issue a permanent injunction to CMWD prohibiting it from holding the proposed bond election or from incurring bond indebtedness of any kind to fund a CFD and that CMWD pay GSWC’s costs for the lawsuit.
“We have reviewed Golden State’s lawsuit and believe it has no merit whatsoever,” Casitas General Counsel John Mathews said in a statement released late Wednesday. “Casitas intends to vigorously defend its right to use the well established CFD law to acquire Golden State’s Ojai water utility if that is what the citizens of Ojai wish us to do,” Mathews added.
Jim Word, president of the CMWD board of directors, stated, “The District believes this important decision should be made in public meetings and at the ballot box, not in a courtroom. Golden State’s lawsuit appears to be part of its tactics to intimidate the community to abandon the acquisition so that Golden State can continue to gouge its customers with its grossly excessive water rates.”
“This lawsuit is necessary because Casitas MWD’s plan violates the law,” GSWC wrote in its petition. “The Mello-Roos Act funding mechanism may not, as a matter of law, be used to finance a taking by eminent domain.”
The GSWC petition, however, cites an instance where a CFD had been used to fund an eminent domain takeover. “It appears that the Felton takeover was the only time that the Mello-Roos Act has ever been used to fund a taking by eminent domain … The legality of the Felton takeover scheme was never tested in the courts.”
“After careful review, we believe that the Casitas Municipal Water District’s adopted Mello-Roos parcel tax plan is illegal,” opined Denise L. Kruger, GSWC’s senior vice president, regulated utilities. “The Mello-Roos Act is clear and does not authorize financing for an eminent domain takeover of existing facilities that are already devoted to public use. We have asked a judge to review the law and rule promptly to protect Ojai residents from facing expensive and annually increasing Mello-Roos taxes levied through a recurring property lien.”
Both the city of Ojai and CMWD have hired attorney Jeff Oderman as their bond counsel in this case. Oderman also represented the city of Felton during its successful eminent domain efforts against California American Water, a subsidiary of RWE, a Germany-based corporation.
Oderman said the basic contention of GSWC’s suit is flawed because CFD’s often must acquire offsite rights-of-way through eminent domain and bond funding is the mechanism used for those purchases.
The Ojai Valley News spoke with several attorneys familiar with eminent domain and Mello-Roos requirements. Although none would comment about the specifics of this case, they were not aware of instances where a CFD had been used to fund an eminent domain buyout. Neither, however, could they cite a case where it had been prohibited.
CMWD has 30 days from the date of the filing to respond to the summons. The case is currently assigned to judge Mark Borrell. A hearing date has not yet been set for the case.