May 14, 2013
Tim Dewar, firstname.lastname@example.org
It took 21 pages to do it, but Casitas Municipal Water District (CMWD) attorneys refuted or agreed to all 133 allegations in the Golden State Water Company’s (GSWC) lawsuit seeking to stop the August bond election that could finance a buyout of the latter’s Ojai service area by the former.
In its answer, filed with the court March 26, CMWD attorneys agreed completely with only three of the allegations GSWC presented in its Ventura County Superior Court lawsuit. CMWD agreed partially with 36 of the allegations and completely denied 94.
“Casitas denies the allegations set forth in Paragraph 2 of the Petition, including without limitation the allegation that Casitas already has made a decision to exercise its power of eminent domain and Casitas further denies any inference that Casitas is engaged in some sort of “power grab” or “empire building” or that it is doing anything other than responding to widespread community support for Casitas’ acquisition of Golden State’s Ojai service area due to Golden State’s extremely high water rates and Golden State’s unresponsiveness to the needs of its customers and ratepayers,” wrote Casitas special counsel Jeffrey Oderman from Rutan & Tucker.
“Paragraph 4 of the Petition contains nothing other than improper and incorrect legal argument,” the response continued. “Casitas denies that this lawsuit is necessary to prevent Casitas from implementing a plan that violates the law and Casitas alleges that, in fact, this lawsuit is an improper attempt by Golden State to prevent the voters in Golden State’s Ojai service area from expressing their constitutional right to vote on the question of whether Casitas should be authorized to impose a CFD special tax on taxable developed properties within Golden State’s Ojai service area and sell CFD bonds in order to enable Casitas to acquire Golden State’s Ojai service area and help Golden State’s existing customers and rate payers escape the oppressive water rates currently charged by Golden State.”
In answering another GSWC allegation, Oderman wrote, “Casitas alleges that the true financial harm at issue in this case is the harm that currently is being suffered by the customers and rate payers in Golden State’s Ojai service area every day due to its excessively high water rates.”
Among the many issues to be determined in the lawsuit is whether GSWC has standing to interfere with the election, whether Mello-Roos funding can be used if a project involves an eminent domain action, whether GSWC would be entitled to compensation for loss of business goodwill and water rights — which GSWC claims are intangible rights and therefore not eligible for Mello-Roos funding — whether the Casitas board has already decided to institute eminent domain proceedings and whether the cost of GSWC’s assets could exceed the bond amount, making the risk too large.
“While Casitas has not yet prepared a formal appraisal of the fair market value of Golden State’s Ojai water system and alleged water rights, Casitas alleges that the California Public Utility Commission has set Golden State’s water rates for its Ojai service area (in 2012) based upon a valuation of Golden State’s entire Ojai water utility of only $14,643,249 and that in Golden State’s most recent general rate-setting application (Application 11-07-017) to the California Public Utilities. The Commission’s assigned Administrative Law Judge recently (on March 19, 2013) recommended that Golden State’s water rates for its Ojai service area for 2013 be set based upon a valuation for Golden State’s entire Ojai water system of only $17,144,400, which makes Golden State’s allegation that its Ojai water utility “potentially has a cumulative market value exceeding $100 million” grossly inflated and absolutely preposterous.
According to court records, the trial — which is open to the public — has been set for June 10 in the court’s Department 43 at the Ventura County Government Center.
EDITOR’S NOTE: This story was updated on May 15, 2013 at 12:06 p.m. to remove references to future filing dates.