Ojai Valley News Blog

May 14, 2013
Tim Dewar, publisher@ojaivalleynews.com

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.

May 2, 2013
Kimberly Rivers and John Brooks, OVN correspondents

Officials who manage the water supply in the Ventura River Watershed (VRWC) say residents of Ventura and the Ojai Valley have been on a water supply roller coaster many times, and once again the reservoir and ground water levels are dropping because of inadequate rainfall.

During an April 25 VRWC meeting at the Oak View Community Center, Lorraine Walter, coordinator at VRWC, told approximately 75 attendees that since 1903 the average yearly rainfall in Ojai has been approximately 21 inches. This year only 10 inches have fallen.

At the meeting, Dr. Toby Moore, hydro-geologist and water resource manager at Golden State Water Company, detailed a rationing project that occurred in Simi Valley in 2009 to illustrate what might occur should rationing in Ojai be required in the future.

Following the meeting, Moore said, “Voluntary conservation has been in place for many years in Ojai. In 2008, we asked all customers to voluntarily reduce water use by 20 percent. This is aligned with the state mandate to reduce per capita water consumption statewide 20 percent by the year 2020.”

Moore added that voluntary conservation is “complemented by implementation of tiered rates” and encouraged customers to visit their website (www.gswater.com) for details.

Steve Wickstrum, general manager of Casitas Municipal Water District, said the water level at Lake Casitas has fallen 31 feet since it reached capacity in 2005. He says the lake is 70 percent full and rationing for their customers is not likely until next year, assuming the next rainy season is also below average. He suggests that all customers — both residential and commercial — conserve now so that shortages can be averted.

Shana Epstein, general manager of the Ventura Water District, said the long-term solution for the city of Ventura is a reverse osmosis plant that would turn sewer water back into drinking water. She says Ventura gets half its water from Casitas and the rest from wells along the river. Without direct potable reuse, she said, there is no other source to increase supply to Ventura’s 113,000 water customers.

“The Ojai Basin has a limited yield. Additional demand utilizing groundwater, above current demands, puts additional stress on the basin,” said Moore in responding to a question about how more straws in the pond, or more wells tapping into the groundwater basins, would effect water supply.

There has been recent concern in Ojai over water use by large industrial users, such as oil companies. Aera Energy operates in the Ventura Oil Fields along the Ventura River.

“Aera does not operate any fresh water wells in its Ventura oilfield,” said Susuan Hersberger, an Aera spokesperson. “While our overall activity in the (Ventura) field has increased over the last five years, we have decreased fresh water usage by almost 40 percent.” She explained that Aera is “self-sufficient” in the water used for most of their oil recovery operations because they primarily use produced water — brackish water that comes up with the oil — that has been filtered. “Aera uses water from the Casitas (Municipal) Water District for domestic (office) use, dust suppression, stored fire suppression, equipment and engine cooling and drilling. The amount of water used in drilling activities is approximately three acre feet per year.”

“Water management depends on consumption and the weather,” said Moore. “In California, we live in a natural state of varied precipitation from year to year, so we proactively plan and manage water supplies — whether it’s a wet or dry year. And, we always encourage our customers to take voluntary measures to reduce water use.”

Visit http://venturawatershed.org/blog/1942 to view “Sustainable Water Use in the Ventura River Watershed,” by the Bren School of Environmental Science and Management at UCSB.

April 11, 2013
Tiobe Barron, OVN correspondent

Ojai City Council Tuesday night passed to a second reading the ordinances necessary to implement the 2006-2014 Housing Element. The finer points of these ordinances were hammered out at the Feb. 20 public hearing. City staff made slight changes to the special overlay site list after the Carty family reportedly contacted the California Department of Housing and Community Development; in response, staff recommendations changed the density of overlay sites from 20 units per acre to the more “realistic” 12.6 units per acre. This, in turn, meant the existing list of sites fell short of the required acreage to provide 177 potential units of affordable housing, which was remedied by bumping up the number of applicable acres on the school district site from 3.4 to 4 as well as including a portion of the former bowling alley property.
“I can tell you firsthand the amount of work that the Planning Commission put into this was absolutely astounding,” commented Mayor Pro Tem Carlon Strobel.
“The Housing Element is such an intrusion into our community, but it does make us focus on affordable housing, which we do need in Ojai,” contributed Mayor Paul Blatz.
Ojai resident Doug Lebarr encouraged Council to concentrate on developing Ojai’s “eastern entrance,” the area around the former bowling alley. Local Chumash elder Julie Tumamait-Stenslie cautioned members to safeguard artifacts lying undiscovered in potential development sites.
“I am glad to hear there will be mitigation of cultural resources,” said Tumamait-Stenslie. “I would like to hear more on the methods used.”
Community development director Rob Mullane reminded wary residents and Council members that any development project that comes forward for the overlay sites will still have to undergo the design review process through the Planning Commission, ensuring some amount of discretionary control over these projects. Council will begin discussion of the next housing cycle this summer.
Council also heard a presentation given by Greg Gamble, executive director of the Ojai Valley Land Conservancy (OVLC). The OVLC recently entered into an agreement to purchase a parcel of land above Shelf Road, and had originally requested the city contribute $45,000 toward the approximately $500,000 needed by May 31 to secure the site. After additional contributions were received, the OVLC decreased the requested contribution of the city to $20,000. City staff recommended contributing this amount using Park and Recreation tax funds, as the preserve will have public hiking trails. The parcel, called the “Valley View Preserve,” measures about one mile east to west, comprises about seven percent of the land within city limits, and is nestled between Shelf Road and the firebreak road.
“To me, it would feel right if the city would contribute this $20,000,” Gamble stated. “This (protecting the land as a preserve) is one of the few things we can do that is permanent.”
“I think it’s a great project, but I would like to see things brought to the Parks and Recreation Commission, just as a courtesy and to utilize them,” offered Councilman Severo Lara.
“I would agree; I would like to endorse it tonight, but it would be appropriate to send it to the Commission,” agreed Councilwoman Betsy Clapp.
“It is very important that we have the protection of this property,” contributed Tumamait-Stenslie. “There are also well-documented cultural resource site, sacred sites, near and about that area, so having this land in a conservancy protects the sacred sites, the religious sites. As we endorse and support the Ojai (Valley) Land Conservancy, it’s a great opportunity to also support and protect the cultural resources that are there, and to protect the mountaintops that were at one time walked up to. Well, people are still doing that, in their way; praying and having solace up there.”
The next regular Parks and Recreation Commission meeting is scheduled for 6 p.m. May 9, and presumably will discuss the use of the tax funds toward the Valley View Preserve.
Council unanimously approved a resolution supporting approval of a special tax for the Casitas Municipal Water District to acquire and rehabilitate the Golden State Water Company’s Ojai service area. While this tax will not be levied on Ojai itself, Council felt it worthwhile to formally encourage the acquisition.
“In their staff reports they listed a number of reasons why their rates in Casitas would be lower than under Golden State,” said city manager Rob Clark. “First of all, Golden State has to pay income tax and property tax. Casitas is tax-exempt, so they do not. Golden State has to pay franchise rights to the City; Casitas is again exempt and does not. Golden State Water does not get property tax money, but Casitas does get tax money, and can use that for this service. Golden State Water has to pay very high executive salaries, or at least they do pay them, and Casitas does not.”
The next regular Council meeting will be held April 23 at 7 p.m., at 401 S. Ventura Street in Ojai. Visit www.ci.ojai.ca.us for upcoming agenda items.

April 5, 2013
Tim Dewar, publisher@ojaivalleynews.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.

March 22, 2013
Tim Dewar, publisher@ojaivalleynews.com

Ratepayers with Golden State Water Company (GSWC) are one step closer to learning whether they will be charged more or less for water they have already used in 2013 and the new rates they will pay over the next two and a half years.

Administrative Law Judge Richard Smith released a proposed settlement ruling Tuesday that, among other things, sets GSWC’s rates through 2015. Since Jan. 1, Ojai water customers have been paying interim rates pending this decision.

The proposed agreement also includes a provision requiring GSWC to conduct customer service satisfaction and affordability surveys. The agreement must now go to the California Public Utilities Commission for a final ruling. A decision is not expected before April.

If the CPUC adopts the agreement, rates will go up for some in Ojai, but some low-volume users will end up paying less in 2013. Either way, ratepayers will see an adjustment in a future bill to make up the difference.

Residential customers with a five-eights-inch meter who use 1,2oo cubic feet* of water per month are paying $73.41 for water at present rates. That would go down under the agreement to $70.59, a savings of $2.82. These numbers are only for water used and do not include other charges such as the meter charge or CPUC funding fee.

Those using 2,500 cubic feet* of water per month are paying $124.19 at present and will pay $126.38, or $2.19 more, while those using 4,000 cubic feet* are paying $188.46 and would pay $201.18 under the agreement.

In Ojai, the tier 1 cutoff for residential customers will increase from 500 to 1,200 cubic feet* per monthly billing cycle and tier 2 levels will include amounts from 1,400 cubic feet to 2,500 cubic feet.* This change will also help some low-volume users save.

In its July 21, 2011 rate change request, GSWC sought to increase rates systemwide by $58,053,200 or 21.4 percent in 2013. This decision, however, would authorize GSWC to collect $314.6 million — a 16 percent increase over the 2013 interim rates — from its ratepayers statewide.

For 2014, GSWC received the $8,926,200, 2.7 percent increase over the 2013 rates it requested. The $10,819,600, 3.2 percent increase GSWC requested for 2015 was cut to a 1.8 percent increase over the 2014 rates in the agreement.

Adjusted rates will take effect Jan. 1 in both 2014 and 2015.

While the 2013 rates will likely go down for the average residential tier one customer in Ojai, similar ratepayers in other GSWC service areas aren’t as lucky. Simi Valley ratepayers will likely see a 26 percent jump in their bills and Los Osos and Arden Cordova customers can count on an 18.7 and 18.6 increase respectively.

Public participation hearings were held by the CPUC in November and December 2011 and in February and March 2012. Ojai’s hearing was held Feb. 27, 2012.

Protests to the application were filed by the town of Apple Valley, the cities of Claremont, Ojai, San Dimas and the Division of Ratepayer Advocates (DRA).

According to the decision, more than 2,100 attended the hearings and more than 450 individuals, including many state, county and local officials, spoke. Most opposed the application and none supported it, the decision explained. Almost half of those who spoke complained that, after several rate increases in recent years, Golden State’s rates were no longer reasonable or affordable.

Smith’s decision also said the CPUC received thousands of letters and emails from GSWC customers, and written communications from many public officials concerning the application. None supported the application.

DRA raised concerns about the relatively high number of customer complaints in Ojai, and recommended that Golden State improve Ojai’s customer service. DRA recommended that the CPUC reduce Ojai rates in the next GRC if Golden State’s customer service in Ojai did not improve.

Due, in part, to the number of complaints, the settlement requires GSWC to implement a customer satisfaction survey program locally, and to consider an affordability study that may be included in the next rate case.

GSWC will have to analyze customer contact investigation reports to identify ongoing customer issues, identify measures to improve customer service and provide progress reports to the CPUC every six months. In addition, GSWC must analyze field investigation reports of customer contacts for the years 2010, 2011, and 2012 to identify any other potential customer issues, submit a report to the CPUC, DRA and The Utility Reform Network on the proposed customer service improvement measures by Nov. 1, 2013, and provide the CPUC annual updates on the status of implementing the customer service improvement measures.

The estimated $50,000 annual cost for the customer survey program will be split equally by GSWC ratepayers and shareholders.

DRA recommended that Golden State also be required to conduct an affordability study to provide information in the next general rate case about the company’s rates relative to other water companies and to help evaluate the adequacy of Golden State’s low income programs.

DRA also wanted the cost of this study to be shared equally between GSWC’s shareholders and ratepayers, however, GSWC countered that the cost of the study should be recovered from ratepayers only, not from its shareholders.

GSWC and DRA must meet prior to the next rate case hearing, scheduled for July 2014, to discuss the preparation of the affordability study. If no agreement can be reached as to the scope or cost of the study, GSWC will not be required to include the study in the next rate case.

“With respect to the administrative law judge’s proposed decision, we are currently reviewing the 272-page document to ensure the proposed decision accurately reflects the settlement agreement,” explained GSWC’s Senior Vice President for Regulated Utilities Denise L. Kruger. “The Commission has yet to act on the proposed decision, and it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision.”

EDITOR’S NOTE:

* This story was changed April 27 at 2:35 p.m. to indicate that usage amounts should have been given as hundred cubic feet.

March 14, 2013
Tim Dewar, publisher@ojaivalleynews.com

Golden State Water Company’s (GSWC) Ojai service area customers will get their election.

August 27 will be the day Ojai voters decide whether they keep GSWC or try kick it to the curb in favor of Casitas Municipal Water District’s (CMWD). Voters will be asked whether they support a 30-year property tax bond to fund the buyout.

After listening to nearly three hours of public comments, the Casitas board voted unanimously to approve the three resolutions necessary to form a community facilities district and hold the election.

Of the approximately 45 speakers, more than two-thirds were in favor of holding the election. Of the remainder, three were heavily opposed to the buyout, six others questions aspects of how the bond was apportioned or wanted the CMWD board to postpone action and do more research.

Ventura County Supervisor Steve Bennett, speaking as a CMWD customer, talked about holding an election when frustration levels have reached where they are in Ojai. “It is appropriate to go to the voters and ask the voters to weigh in. Certainly,” he added, “some risks have been identified, but that is what elections are all about. Do you want the advantages and the potential disadvantages of one action or the other action.”

Ojai resident Janet Bolton was a little more blunt. “I don’t want the dividends for their shareholders on my back anymore.”

Jerry Camarillo Dunn concurred. “I am tired of Golden State having a pipeline to my wallet.

Michael Shapiro echoed Bolton and Dunn’s statements. “The bottom line is that Golden State is accountable to its shareholders. We want that to end. We want humble public servants, such as yourselves, who run for election every four years.”

Ojai Friends of Locally Owned Water (F.L.O.W.) member Bob Daddi remarked that if Golden State Water was concerned about Ojai, they could help avoid a potentially costly legal battle by signing over control of the company to Casitas.

Bill Horne, an Ojai resident for 51 years, thanked the CMWD board and Ojai F.L.O.W. for not “going along with Golden State’s money grabbing tactics” and said the Public Utilities Commission and GSWC are attached at the hip.

One speaker said whom the community trusts to provide its water is one of the most important decisions it can make. “Trustworthy doesn’t describe the poor service, poor maintenance and high rates we have been getting from Golden State,” noted Jerry Kaplan.

To those who feel the bond isn’t apportioned fairly, Kathleen Richards said, “Taxes are rarely apportioned fairly. I don’t have children but I have been paying for public education my entire adult life.”

Michael Daily offered a bit of financial advice. “If your property taxes increase, you can deduct that on your income tax. You can’t deduct your water bill.”

Camille Crock said she fears losing property that has been in her family since 1964 because of the tax increase the bond would trigger. “If you can’t pay your water bill, they send it to a collection agency. If you can’t pay your tax bill, they can automatically take your house. It’s far better to owe the water company than the tax collector.”

Jim Finch, an East End farmer, told the board he was concerned that property values would decrease after the tax was added. “Do the valuation, do the homework and sit down with Golden State and try to work something out,” he said.

Nearly all who expressed a preference between a walk-in and mail ballot said they preferred the former. “We want a walk-in vote because we don’t trust Golden State,” explained F.L.O.W. member Ryan Blatz.

If two-thirds of those voting want the change, CMWD would have up to $60 million to make an offer for the GSWC infrastructure and equipment and to fund much-needed repairs to the system.

Because GSWC officials have repeatedly said that portion of the company is not for sale, CMWD would likely have to invoke the eminent domain clause in GSWC’s franchise agreement with the city of Ojai. A court would then decide if the sale can go forward and, if so, what the fair market value of Golden State’s assets is.

If the bond does not pass, CMWD will not be reimbursed for its acquisition costs to that point.

If the bond passes but $60 million is not enough to fund the purchase, as was GSWC’s contention at the meeting, CMWD could decide to walk away from the buyout, but property owners in the community facilities district would still be responsible for the bonds issued to that point.

During the 15 minutes allotted for a presentation regarding its position, GSWC’s legal representative Steve Amerikaner, from Brownstein, Hyatt, Farber, Schreck LLC, said the Casitas proposal was “fundamentally flawed” and warned voters to be “deeply skeptical.”

“The District is asking the voters to bear the cost without doing the research,” Amerikaner noted. If you don’t approve these resolutions tonight, do a full appraisal including water rights and do an independent feasibility study, Golden State will sit down with you.”

Casitas board member Bill Hicks took exception to Amerikaner’s comments. “You are well worth $500 an hour,” Hicks remarked. “You gave a good presentation but I’ve got to say how ironic it is that you are going to try to use the CEQA card on us. You don’t have water rights. Let’s sit down and negotiate. Let’s get this thing done.”

After the meeting, Pat McPherson, Ojai F.L.O.W. steering committee chair, said “We are very pleased with the Casitas board voting unanimously to put the matter before the voters on Aug. 27 using the traditional election process. The Casitas plan provides a way for Ojai to have local control of its water while saving the residents, schools, city and businesses millions of dollars in the first few years.”

The first phase was to get the petitions signed by 1,900+ Ojai Golden State Rater Payers, which we did in record time. The next phase was to encourage Casitas to accept our request to buy Golden State operations in Ojai, create a buy-out plan, and vote to let the Ojai Golden State Rater Payers vote to create a CFD and authorize the Bonds to acquire the system either through negotiations or eminent domain as specified in the franchise agreement. The next phase will be up to the voters Aug. 27, where we are very confident we will receive well over the two-thirds vote required for passage. Ojai is a very special little town that puts politics aside and sticks together whenever an outsider abuses any one of its citizens. I am very proud to live here.”

March 5, 2013
Tim Dewar, publisher@ojaivalleynews.com

In the next two weeks, Golden State Water Company (GSWC) ratepayers will have two opportunities to learn more about the potential consequences of the proposed buyout of the water provider by Casitas Municipal Water District (CMWD).

The first opportunity will be Thursday when members of Ojai Friends of Locally-Owned Water (F.L.O.W.) invite current GSWC customers to bring their questions to The Ojai Valley Inn at 6 p.m.

“Ojai FLOW will be hosting an informational meeting for current Golden State ratepayers regrading the Casitas proposal to acquire Golden State Water,” explained F.L.O.W. spokesperson Ryan Blatz.  “This meeting will focus on how the Casitas proposal will affect our community.  Ojai FLOW will be explaining how the Casitas proposal works and answering any questions the community may have.  Current Golden State ratepayers are invited to bring their water bills so they can compare their current water costs to what they will be under the Casitas proposal.”

Ojai F.L.O.W. members initiated talk of a possible buyout after collecting more than 1,900 signatures in 2011 calling for Casitas to take over the for-profit company’s operation in Ojai.

Casitas studied the issue until August 2012 when its board decide to move forward with the process of pacing the bond before voters and what the terms of the bond election would be.

The CMWD board of directors will hold a public hearing March 13 at 6 p.m. at Matilija Junior High School’s auditorium regarding the buyout. At that meeting, the CMWD board could approve moving forward with the vote, set a date for the election and decide whether a special election or mail-in ballot election would be best.

Registered voters within the proposed communities facilities district would be asked to vote on whether to levy up to $60 million over 30 years on residential and commercial properties to pay for the cost of purchasing GSWC’s assets and to fund future repairs to the system that provides water to 2,900 accounts, mostly within the city limits.

The bond vote, which would likely be held sometime in July, would need affirmative votes by more than two-thirds of those voting to pass.

If the bond passes and GSWC decides not to accept a buyout offer from the CMWD, the city of Ojai would begin the eminent domain process as allowed by the franchise agreement it has with GSWC. It would then be up to a court to decide whether eminent domain could be used in this case and if so, how much GSWC would be compensated.

March 5, 2013
Tim Dewar, publisher@ojaivalleynews.com

Ojai Basin Groundwater Management Agency board member Jerry Conrow pulled from its agenda Thursday night an item that called for considering hiring an attorney to help prepare for the possible adjudication of water rights within the Ojai Basin. He said the item was pulled at the request of the Ojai Water Conservation District, the organization he represents on the OBGMA.

Adjudication of water rights is the process typically used to determine who is entitled to take water from a specific area (in this case, the Ojai Basin) particularly during times of water shortages. All well owners drawing water from the Basin would be required to show their historical water use in order to retain water rights if adjudication were ordered.

OBGMA board member Russ Baggerly, who represents Casitas Municipal Water District, said the very reason the group was formed was so water-related issues could be determined locally, rather than through the courts where adjudication would be decided.

Betsy Clapp, who represents the city of Ojai on the OBGMA board said she hopes the discussion about adjudication will encourage those well owners who have not yet done so, to register their wells with the OBGMA. “If you don’t do that, you can’t prove historic use.”

Adjudication has become an issue in the buyout of Golden State Water Company’s (GSWC) Ojai service area with that company’s assertion that any buyout amount would have to include payment for its water rights, despite the fact that the Basin has not been adjudicated to establish those rights.

GSWC officials continue to insist that their Ojai service area is not for sale.

The CMWD board of directors will hold a public hearing March 13 at 6 p.m. at Matilija Junior High School’s auditorium regarding the buyout. At that meeting, the CMWD board could vote to move forward with a bond election to finance the buyout.

Registered voters within the proposed communities facilities district would be asked to vote on whether to levy up to $60 million over 30 years on residential and commercial properties to pay for the cost of purchasing GSWC’s assets and to fund future repairs to the system that provides water to 2,900 accounts, mostly within the city limits.

The bond vote, which would likely be held sometime in July, would need affirmative votes by more than two-thirds of those voting to pass.

Feb. 28, 2013
Tim Dewar, publisher@ojaivalleynews.com

A U.S. Court of Appeals panel ruled “no harm, no foul” Wednesday in the Casitas Municipal Water District’s (CMWD) 2005 lawsuit against the federal government.

On Jan. 26, 2005, CMWD filed suit in the U.S. Court of Federal Claims asserting that the federal government had violated the Fifth Amendment by taking its property without compensation. The suit stems from the 1997 listing of the West Coast steelhead trout as an endangered species and the subsequent need to build a fish ladder at the Robles Diversion Dam.

The completion of the fish ladder, in December 2004, meant the District had to begin diverting approximately 3,500 acre-feet of water each year in order for the ladder to operate properly.

Filed the following month, the lawsuit sought reimbursement of the $9.5 million it spent building the fish ladder and for the water it lost each year.

In October 2006, the Court of Federal claims dismissed Casitas’ claim for the $9.5 million, ruling those costs were considered a normal part of operating and maintaining the water system.

Five months later, the Court ruled in the government’s favor again when it decided that the water used to operate the fish ladder did not constitute illegal taking because this amount did not reduce the water Casitas actually transferred to its customers.

Upon appeal, the Court upheld the dismissal of the $9.5 million breach of contract claim but remanded the illegal takings portion back to the trial court for further proceedings.

At the next hearing, the court reaffirmed that the taking claim could only be applied if Casitas could show that the operation of the fish ladder resulted in a reduction of “beneficial use” of the water to which it was entitled. In this case, the court asserted that this meant water that was actually delivered to customers rather than water stored in the lake for possible future use.

The government argued that the District’s contract with the Bureau of Reclamation provided for the “beneficial use” of up to 28,500 acre-feet per year and Casitas had used, on average, only 17,543 acre-feet per year over the past 40 years. This leaves the District 7,450 acre-feet to deliver before the diverted amount would be a factor.

The court left open the option for the District to refile the case if the amount available to customers were reduced in future years because of the need to operate the fish ladder.

The District also appealed this ruling, claiming the court used the wrong standards for determining “beneficial use.”

It was this appeal that was denied Wednesday.

Ron Merckling, water conservation and public affairs manager for the CMWD said Wednesday that this issue will have to be placed on a future agenda so the District’s board of directors can get legal advice as to its options.

The CMWD board will have a meeting March 13 at 6 p.m. at the Matilija Junior High School auditorium to receive public comment regarding a resolution to form a community facilities district to fund the buyout of Golden State Water Company.

Feb. 26, 2013
Tim Dewar, publisher@ojaivalleynews.com

One of the directors of the Ojai Basin Groundwater Management Agency (OBGMA) sees a lawsuit in that group’s future and wants to be prepared.

The agency is tasked with managing water resources in the Ojai Basin.

Jerry Conrow, who represents the Ojai Water Conservation District on the OBGMA board, said the proposed buyout of Golden State Water Company by the Casitas Municipal Water District has started the lawsuit ball rolling.

“I understand enough about the law to know that Golden State Water will defend itself by seeking adjudication,” Conrow explained. “This is going to be a litigation issue. Once you start the ball rolling, it will involve the rest of the users.”

He has asked that when the board meets Thursday it consider hiring an attorney to help prepare for the possible adjudication of those water rights within the Ojai Basin.

“This is a major issue that has been ignored by everyone and I don’t intend to sit idly by and do nothing,” Conrow explained. “Casitas itself has no skin in the game. It is acting for Ojai F.L.O.W. to take away the interests of Golden State.”

Although GSWC officials have stressed that its Ojai service area is not for sale, they contend that CMWD would have to pay a significant amount for its water rights in addition to its land, wells, pipes and other equipment during eminent domain proceedings.

When asked if it has undertaken, or intends to undertake, any steps to begin the adjudication process, Denise L. Kruger, GSWC’s senior vice president of regulated utilities, said, “Golden State Water Company is working with local stakeholders consistent with our role as a founder and member of the board of directors for the Ojai Basin Groundwater Management Agency.”

Because the Ojai Basin’s water rights have never been determined through the adjudication process, it would be up to the State Water Resources Control Board and a superior court judge to determine if GSWC has water rights. Current Ojai Basin well owners would have to participate in the process in order to be granted rights to continue to pump water in the future.

Ojai F.L.O.W. officials have argued that because they are merely a franchisee of the city of Ojai, GSWC does not have water rights and even if they did, those rights would be worthless without the franchise agreement that allows them to operate their system in the city’s rights-of-way.

“To me,” explained Ojai F.L.O.W. member and attorney Ryan Blatz, “this just sounds like a way to drive up the price. I just don’t know where the legal basis is for Golden State to claim they have water rights.”

“This condemnation will have a great impact on the basin and it is obvious to me that the city of Ojai and Ojai F.L.O.W. aren’t concerned with the others who use this basin. They want to pay less for water, but we all want to pay less,” Conrow noted.

The OBGMA board will meet Thursday at 5 p.m. at 428 Bryant Circle. This meeting is open to the public.

Ojai F.L.O.W. will also host a ratepayer workshop March 7 at 6 p.m. at the Ojai Valley Inn. Blatz said current GSWC ratepayers interested in learning more about the buyout and what consequences it might have for them are welcome to attend.

The CMWD board will hold a public hearing March 13 at 7 p.m. at Matilija Auditorium where it is expected to vote on whether to hold the bond election that would finance the proposed buyout.

Kobe Masuoka (left) and Richard Niles (right), both from Camarillo, are served water on the Agava Maria patio by Maria Esquivel. (photo by Tim Dewar)

To help Ojai residents understand how the proposed buyout of Golden State Water Company might impact the rates they could pay for water, the Oai Valley News will profile several typical Golden State Water Company customers.
We will compare their average water usage at today’s GSWC rates and what those charges would be as a Casitas Municipal Water District customer including the proposed property tax.

Water customer:
Agave Maria Restaurant

Size & type of lot:
Commercial, 2,303-square-foot building

Meter size:
5/8 inch

Annual water usage:
665 units

All charges from Golden State Water Company for 665 units:
$3,410.16

All charges from Casitas Municipal Water District for 665 units:
$1,328.39

Maximum annual bond payment for this lot:
$697.80

Total annual combined bond and CMWD water charge:
$2,026.19

Result:
GSWC charge would be $1,383.97 higher than the combined Casitas charges and bond amount.

If vote was held on the bond today, would customer support it?
Yes.

To complete your own rate comparison, you will need the previous one year’s  Golden State Water Company bills (six bills). On your smartphone or tablet, scan the qr code below or go to http://goo.gl/CSVBd to access the rate calculator.

Select bi-monthly for “How you are billed.” Select pumped for “Gravity or Pumped.” Select residential for “Customer Type.” Find your meter type on your GSWC bill and enter that in the “Meter Size” menu. Enter the number of water units used on each of your six bills. Click the calculate button and make note of the estimated water bill amount. Add these six amounts together.

Next, you will figure the bond amount you would have to pay if it were in effect today. This amount will be added to the estimated water bill amount from the rate calculator and that is the figure you will compare with the total amount paid to Golden State for the year.

For this, you will need to determine the size of your parcel. If you are not sure, contact the Ventura County Assessor’s Office at 654-2181. For single-family parcels larger than one acre, your maximum annual bond payment would be $2,093. For single-family parcels between 22,000 and 43,560 square feet, your maximum annual bond payment this year would be $1,235. For single-family parcels between 10,000 and 22,000 square feet, your annual maximum bond payment this year would be $741. For single-family parcels less than 10,000 square feet, your maximum annual bond payment this year would be $480. Condominium owners would pay $407 annually this year. Commercial property owners would be charged .303 cents for every square foot of non-residential floor space on the property. Industrial-zoned parcels would be charged .159 cents per square foot.

To help Ojai residents understand how the proposed buyout of Golden State Water Company might impact the rates they could pay for water, the Oai Valley News will profile several typical Golden State Water Company customers. We will compare their average water usage at today’s GSWC rates and what those charges would be as a Casitas Municipal Water District customer including the proposed property tax.

Water customer
Allen Bertke and Liz Currie

Size & type of lot
More than 43,560 square feet. Customer has four acres and five horses

Meter size
1 inch

Annual water usage
864 units

All charges from Golden State Water Company for 864 units
$4,816.14

All charges from Casitas Municipal Water District for 864 units
$2,015.19

Maximum annual bond payment for this lot
$2,093

Total annual combined bond and CMWD water charge
$4,108.19

Result
GSWC charge would be $707.95 higher than Casitas charges and then bond amount.

If vote was held on the bond today, would customer support it?
Yes.

To complete your own rate comparison, you will need the previous one year’s  Golden State Water Company bills (six bills). Click here to go to the online rate calculator.

Select bi-monthly for “How you are billed.” Select pumped for “Gravity or Pumped.” Select residential for “Customer Type.” Find your meter type on your GSWC bill and enter that in the “Meter Size” menu. Enter the number of water units used on each of your six bills. Click the calculate button and make note of the estimated water bill amount. Add these six amounts together.

Next, you will figure the bond amount you would have to pay if it were in effect today. This amount will be added to the estimated water bill amount from the rate calculator and that is the figure you will compare with the total amount paid to Golden State for the year.

For this, you will need to determine the size of your parcel. If you are not sure, contact the Ventura County Assessor’s Office at 654-2181. For single-family parcels larger than one acre, your maximum annual bond payment would be $2,093. For single-family parcels between 22,000 and 43,560 square feet, your maximum annual bond payment this year would be $1,235. For single-family parcels between 10,000 and 22,000 square feet, your annual maximum bond payment this year would be $741. For single-family parcels less than 10,000 square feet, your maximum annual bond payment this year would be $480. Condominium owners would pay $407 annually this year. There are also rates for commercial and industrial property owners that we will give when we profile those types of properties.

Holly Thrasher stands outside her home where water costs forced them to replace much of their landscaping with low-water alternatives. (photo by Tim Dewar)

To help Ojai residents understand how the proposed buyout of Golden State Water Company might impact the rates they could pay for water, the Oai Valley News will profile several typical Golden State Water Company customers. We will compare their average water usage at today’s GSWC rates and what those charges would be as a Casitas Municipal Water District customer including the proposed property tax.

Water customer
Wiley, Holly and Vance Thrasher

Size & type of lot
Less than 10,000 square feet, residential

Annual water usage
164 units

All charges from Golden State Water Company for 164 units
$993.84 annually

All charges from Casitas Municipal Water District for 164 units
$404.77 annually

Maximum annual bond payment for this lot
$480

Total annual combined bond and CMWD water charge at today’s rates.
$884.77

Result
Golden State Water Company’s annual charge is $109.07 more than comparable CMWD rates combined with the bond amount.

If vote was held on the bond today, would customer support it?
“I think so. It (Golden State rates) is just going to continue to go up if we stay with Golden State.,” – Holly Thrasher

To complete your own rate comparison, you will need the previous one year’s  Golden State Water Company bills (six bills). Go here to access the rate calculator.

Select bi-monthly for “How you are billed.” Select pumped for “Gravity or Pumped.” Select residential for “Customer Type.” Find your meter type on your GSWC bill and enter that in the “Meter Size” menu. Enter the number of water units used individually for each of your six bills. Click the calculate button and make note of the estimated water bill amount each time. Add these six amounts together.

Next, you will figure the bond amount you would have to pay if it were in effect today. This amount will be added to the estimated water bill amount from the rate calculator and that is the figure you will compare with the total amount paid to Golden State for the year.

For this, you will need to determine the size of your parcel. If you are not sure, contact the Ventura County Assessor’s Office at 654-2181. For single-family parcels larger than one acre, your maximum annual bond payment this year would be $2,093. For single-family parcels between 22,000 and 43,560 square feet, your maximum annual bond payment this year would be $1,235. For single-family parcels between 10,000 and 22,000 square feet, your annual maximum bond payment this year would be $741. For single-family parcels less than 10,000 square feet, your maximum annual bond payment this year would be $480. Condominium owners would pay $407 annually this year. There are also rates for commercial and industrial property owners that we will give when we profile those types of properties.

Ojai Mayor Paul Blatz relaxes outside his home.

To help Ojai residents understand how the proposed buyout of Golden State Water Company might impact the rates they could pay for water, the Ojai Valley News will profile several typical Golden State Water Company customers.
We will compare their average water usage at today’s GSWC rates and what those charges would be as a Casitas Municipal Water District customer including the proposed property tax.

Water customer:
Paul Blatz, city of Ojai mayor
Size & type of lot:
25,233 square feet, residential
Bimonthly average water usage:
59 units
All charges from Golden State Water Company for 59 units:
$407.97 bimonthly
All charges from Casitas  Municipal Water District for 59 units:
$118.96 bimonthly
Maximum bimonthly bond payment for this lot:
$205.83
Total bimonthly combined bond and CMWD water charge:
$324.79
Result:
GSWC charge would be $83.18 more bimonthly
If vote was held on the bond today, would this customer support it?
Yes

To complete your own rate comparison, you will need your latest GSWC bill. Go here to access the online rate calculator.

Select bi-monthly for “How you are billed.” Select pumped for “Gravity or Pumped.” Select residential for “Customer Type.” Find your meter type on your GSWC bill and enter that in the “Meter Size” menu. Enter the number of water units used. This figure should be an average of your last year’s total usage divided by six. Click the calculate button and make note of the estimated water bill amount.

Next, you will figure the bond amount you would have to pay. This amount will be added to the estimated water bill amount from the rate calculator and that is the figure you will compare with your bimonthly average amount paid to Golden State.

For this, you will need to determine the size of your parcel. If you are not sure, contact the Ventura County Assessor’s Office at 654-2181. For single-family parcels larger than one acre, your maximum bimonthly bond payment for this year would be $348.83. For single-family parcels between 22,000 and 43,560 square feet, your bimonthly bond payment this year would be $205.83. For single-family parcels between 10,000 and 22,000 square feet, your bimonthly bond payment this year would be $123.50. For single-family parcels less than 10,000 square feet, your bimonthly bond payment this year would be $80. Condominium owners would pay $67.83 bimonthly. There are also rates for commercial and industrial property owners that we will give when we profile those types of properties.

Approximately 150 people attended Tuesday’s meeting at Nordhoff High School. (photo by Tim Dewar)

Jan. 30, 2013
Tim Dewar, publisher@ojaivalleynews.com

Approximately 2,800 Ojai residents are one step closer to having a new water supplier along with, they hope, lower rates.

Approximately 150 people attended a special meeting of the Casitas Municipal Water District (CMWD) Board of Directors Tuesday evening. Some shared their opinion of a proposed buyout of Golden State Water Company’s (GSWC) Ojai service area by CMWD. Most just listened as the CMWD Board began the process that could merge the current GSWC customers into the Casitas service area.

During the public comment section of the meeting, 12 speakers encouraged the Board to move forward with their plans, four were firmly against any merger and eight others urged caution or more study of the issue.

The proposed plan calls for Casitas to form a community facilities district (CFD) that, if approved during an election that would likely be held in July 2013, would add a tax to those parcels currently in GSWC’s Ojai service area. The bond would have to receive a yes from a 2/3 majority of those voting in the election. Some parcels owned by public agencies such as the Ojai Unified School District and by nonprofit organizations, would be exempt from the tax.

OUSD Superintendent Hank Bangser attended the meeting and told the Board that last year, the District paid $150,000 to Golden State for water last year. Had the District been a Casitas customer, he noted, it would have paid $50,000 less. “That is a huge difference,” he added.

Most of those urging caution or who were opposed to the plan were current CMWD customers concerned that the merger would cause their rates to increase. Several expressed dismay that they were not notified by CMWD of the special meeting.

The Board’s attorney, John Matthews, tried to explain several times that only registered voters within the current GSWC’s Ojai service area will be allowed to vote because the parcel tax needed to complete the buyout would only be attached to parcels within the proposed CFD, not to those of current CMWD customers.

If the bond is approved, GSWC could make a purchase offer to GSWC. Because the private water company has indicated its Ojai service area is not for sale, the next step for CMWD would likely be to petition for eminent domain proceedings in court. GSWC’s franchise agreement with the city of Ojai provides for the use of eminent domain should the city decide to take back the system from Golden State.

One speaker, David Norrdin, told the Board the eminent domain process goes against traditional American values.

Later in the meeting, citing the franchise agreement’s allowance of eminent domain, Board member Bill Hicks disagreed. “To say that people don’t have the right to do this is just wrong in my opinion.”

Bob Daddi, a member of Ojai Friends of Locally-Owned Water (F.L.O.W.) — the group that started the petition drive that collected more than 2,000 signatures encouraging CMWD to take on the fight — dismissed the concerns of those outside the CFD. “Only 2,900 users will pay for the bond, the infrastructure and all the fees and costs for having this thing happen. Please let us vote on it.”

The final audience member to speak, Robert Feiss, said it was disingenuous for those who don’t live in the community to come to the meeting and try to say what would or would not be beneficial for the community. “This effects property values and the business community. The CPUC has never, ever served this community,” he stated. “Serve us better and allow this to go to a vote.”

Conspicuously absent from the speaker’s podium were representatives from GSWC, which had no one come forward to speak on its behalf when given the opportunity. Wednesday, GSWC Vice President of Operations Patrick Scanlon released a written statement indicating that while GSWC representatives were at the meeting, Casitas’ actions prior to the meeting kept them from speaking. “Given the lack of adequate public notice, the refusal to provide a courtesy copy of the presentation in advance, and that an invitation to speak was not extended until well after the meeting began, it is clear that Casitas Municipal Water District Board Members wanted a predetermined outcome,” Scanlon wrote. “We believe Golden State Water Company customers and Casitas Municipal Water District customers deserve more disclosure than what they heard last night.”

Sen. Hannah-Beth Jackson, unlike her predecessor Tony Strickland, supports efforts to bring the issue to Ojai voters. Her spokesperson, K.K. Holland spoke at the meeting, reaffirming Jackson’s belief that the voters should be allowed to decide this issue.
Four days before leaving office — after losing the November election to Jackson — Strickland sent a letter to CMWD officials supporting GSWC. “As the State Senator for the District representing the Casitas Municipal Water District (Casitas) service area, I am very concerned with the Board’s actions to move forward with forcibly acquiring Golden State Water Company’s Ojai property by eminent domain,” he wrote. “There is no financial, environmental or agricultural benefit and puts current and future residents, businesses and farmers at risk.”
Despite no longer holding office, Strickland continues to impact the discussion. Three of his former local staff members, Sean Paroski, Jennifer Masterson and Chris Collier, spoke at the meeting, however, none identified themselves as having a previous staff position with Strickland. Masterson identified herself as a Ventura resident and said she was a little dismayed that written notice of Tuesday’s meeting had not been sent to all Casitas customers that might be impacted. Paroski identified himself as being on the executive board of the Ventura County Republican Party, but indicated that his group had not taken an official stance on the issue. He opposed the project, saying that eminent domain should be reserved for issues of overwhelming benefit to the community. Paroski’s twitter page identifies him as the government affairs director with the Camarillo Chamber of Commerce. Collier, who said he was born and raised in Ojai, but is now a Ventura resident, ask the Board if they would be willing to guarantee that Ventura ratepayers would not be on the hook for any costs associated with the buyout.

At the end of the two-and-a-half-hour meeting, the Board took three votes. All were passed unanimously.

The first vote was to approve the goals and policies for establishing and using the CFD under the Mello-Roos Community facilities District Act of 1982.

The second vote was a resolution declaring the Board’s intent to move forward with establishing the CFD and to levy taxes to pay for it. This included setting a date for the first public hearing on the matter. It was scheduled for March 13 at 6 p.m. at the Matilija Junior High School auditorium. At the public hearing that night, should the Board vote to move forward with the resolution of formation, the bond election would be scheduled for 90 to 180 days from then.

The third vote was a resolution declaring the Board’s intent to reimburse itself from the bond proceeds for the costs associated with the buyout.

Editor’s note: this story was changed Jan 30 at 3:15 p.m. to reflect the addition of comments from a GSWC spokesperson and it was changed Jan. 31 at 2:46 p.m. to reflect additional comments by speakers. It was also revised Feb. 4, 2013, to remove the name of someone identified as having attended the meeting.

The Casitas Municipal Water District public hearing, regarding the takeover of the Golden State Water Company’s Ojai service area will be Tuesday (tonight) at 6 p.m. at the Nordhoff High School cafeteria. Here are some quick facts leading up to the  public hearing.
• $60 million is the maximum amount that Casitas Municipal Water District directors will ask the voters to approve for the proposed purchase of Golden State Water Company.
• Under the proposed guidelines for the establishment of the community facilities district, the Ojai Unified School District facilities would not be taxed to help pay for the bond. This will result in a significant savings to the OUSD, and ultimately to those who are taxed to help pay for its operation (there are significant numbers of taxpayers who live outside the boundaries of the CFD who would have been taxed to help pay for the bond had CMWD not exempted them)
• Here is the table that outlines the maximum each parcel would be charged annual. This is only for the special tax to pay for the bond and will be over and above the applicable water charges paid to Casitas for actual water service. That amount can be figured on the CMWD website’s rate calculator.

• To find out if your home or business will be included in the proposed Casitas Municipal Water District Community Facilities District 2013-1 see the map and list of parcel numbers here.
  (select the 01/29/13 package link)
• For those who can’t attend the Casitas Municipal Water District public hearing Tuesday at 6 p.m., there are plans to televise it live on Time Warner Cable ch. 10. The Nordhoff High School cafeteria’s capacity is reportedly 125, so that will fill up fast.
• To find out if your home or business will be included in the proposed Casitas Municipal Water District Community Facilities District 2013-1 see the map and list of parcel numbers here. (select the 01/29/13 package link)

Jan. 24, 2013
Tim Dewar, publisher@ojaivalleynews.com

The day that Ojai water customers have been waiting for during the last five years could well arrive next week.

The Casitas Municipal Water District (CMWD) Board of Directors announced Wednesday that it will hold a special meeting Tuesday to take public comment on the proposed takeover of Golden State Water Company’s (GSWC) Ojai service area. The meeting is scheduled for 6 p.m. at the Nordhoff High School cafeteria.

At that meeting, the Board is expected to vote on a series resolutions that would, among other things, establish guidelines for the establishment of the community facilities district (Mello-Roos District) and show CMWD’s intent to move forward with the takeover process.

Depending on the outcome of Tuesday’s vote, the Board could have another public hearing within 45 to 60 days to vote on whether to move forward with the bond election, explained CMWD General Manager Steve Wickstrum.

Whether CMWD will have the money necessary to complete a buyout will hinge on the outcome of a bond election that would place a parcel tax on properties within GSWC’s current Ojai service area. Registered voters within that area will be eligible to vote and it would take a two-thirds majority of those voting in the election to approve the bond. Current CMWD customers will not be eligible to vote in that election because they will not be charged the parcel tax.

“What our Board members have been hearing from the people in Ojai is that this is an opportunity for them to decide who they want to provide their water service,” Wickstrum added. “This is about what they want, it’s not about what the District wants.”

Several of GSWC’s 2,800 ratepayers began efforts in 2007 to oust the privately-owned subsidiary of American States Water citing poor service and rates that are significantly higher than those of water suppliers in nearby communities. The group Ojai Friends of Locally-Owned Water (F.L.O.W.) has been leading the effort to convince the city of Ojai and CMWD to buy out GSWC.

“This is what we have been waiting for,” explained F.L.O.W. member and GSWC customer Pat McPherson. “It is the culmination of our efforts.” He added that Tuesday’s votes by the CMWD is phase two of a three-phase effort. The next phase, he said, will be for GSWC customers to vote yes on the bond measure.

Ojai residents are not the only ones who will voice their opinion however. Denise Kruger, GSWC’s senior vice president of regulated utilities said Thursday, “We look forward to providing our input to the Casitas Municipal Water District Board and the residents of Ojai on this very important topic.”

GSWC officials have also said they are not interested in selling their Ojai operation, which means if the bond vote passes, the city of Ojai would likely have to undertake eminent domain proceedings in court. Section 8 of the city’s franchise agreement with Golden State allows for this process should the city ever decide to look for a new provider. It would, however, be up to the court to determine a fair market value for the water system.

If the bond vote does not pass, CMWD stands to lose up to $100,000 it has spent researching the issue. If the court sets the fair market value above the approved bond amount the District would have to fund the overage itself if it wished to continue.

That potential risk is part of the reason why “we mulled this thing around for as long as we did,” Wickstrum noted. “We wanted to make sure it was right.”

He added that incorporating smaller water providers into the Casitas District is not unprecedented. “Oak View used to be served by a couple of smaller companies that are now part of the Casitas District.”

If the takeover occurs, however, it will be the first time the eminent domain process has been used.

Wickstrum encouraged those in the current GSWC service area to visit the rate calculator on the District’s website (http://www.casitaswater.org/lower.php?url=monthly-water-rate-calculator) with a copy of their current water bill and the parcel tax information that will be provided at Tuesday meeting. This, he said, will allow each customer to determine if changing providers will save them money.

Editor’s note: This story was revised Jan. 24 at 4:30 p.m. to include comments from Golden State Water Company and Jan. 25 at 8:12 a.m. to correct the number of voters required to pass a Mello-Roos bond measure.

Jan. 22, 2013
Kit Stolz, OVN correspondent

A Sacramento-based property rights advocacy group recently accused the Casitas Municipal Water District (CMWD) of paying $100,000 to Ojai Friends of Locally-Owned Water (F.L.O.W.), as part of the utility’s effort to take over the operation of Golden State Water Company’s Ojai service area.

In a letter to the CMWD Board, Marko Mlikotin, president of the California Alliance to Protect Private Property Rights (CAPPPR), wrote “According to recent Board Meeting minutes, the board has allocated over $100,000 to an “Ojai F.L.O.W.” fund. Is this appropriate given that Ojai F.L.O.W. is a political action committee (PAC, aka campaign committee) registered as such with the State of California? Is this a gift of public dollars to benefit a political cause?”

Casitas and Ojai F.L.O.W. officials both scoff at the idea.

“No money has gone from Casitas to Ojai F.L.O.W. or any other outside group,” said Ron Merckling, spokesperson for CMWD. “We have funded a study of the takeover idea, which is costing $28,000, and we have spent money on legal research, but it’s all internal.”

“Ojai F.L.O.W. hasn’t seen a penny of support from Casitas, nor have they been asked by F.L.O.W., nor has it been offered,” said Ojai resident Bob Daddi, a member of Ojai F.L.O.W. “I’m sure it’s part of their (CAPPPR’s) disinformation campaign.”

Local officials are not the only ones crying foul against GSWC’s tactics.

Last year, in the California community of Claremont, GSWC asked for a nearly 30-percent rate hike over a three-year period, over opposition from city officials. In response, the municipality launched an effort to take its water franchise from Golden State.

Claremont City Manager John Ramos said GSWC responded by hiring River City Communications, a Sacramento-based PR firm also headed by Mlikotin.

“Mlikotin is claiming that the city is taking over, or, in his words “grabbing water away from Golden State Water,’” Ramos told the Claremont City Council. “Obviously, as you know, this is absolutely a false statement. It’s important that our residents know that these are not local voices and messages. They are from these firms.”

As part of challenging Casitas’ right to take the water franchise, Mlikotin has launched a “Stop the Ojai Water Grab” campaign.

“Regardless of whether one shares our views regarding private property rights, it’s important for residents to know that these rights cannot be acquired without passing on significant costs,” he said. “I’m certain that the issue will be debated in the courts.”

GSWC is a subsidiary of American States Water Company, which according to company statements is worth $765 million, serves one of every 36 Californians and has paid an increasingly large dividend every year since 1954.

Several communities throughout the state are undertaking efforts similar to Ojai’s to remove GSWC as its water provider.

Sen. Hannah-Beth Jackson, unlike her predecessor Tony Strickland, supports efforts to bring the issue to Ojai voters.

“Who owns local water supplies is the real question,” she said. “When you put all the procedural questions aside, you have to ask if a local community has a say in the delivery and the cost of their local water. There is a clear attempt in California to privatize the ownership of local water supplies, and Ojai is going to be a key battleground in that fight.”

Jackson, herself an attorney added, “Water in California is precious, and people have gone to war over it. I do anticipate litigation over this issue. My hope is that it moves along as speedily as possible, and that we can get some clarity on the matter.”

A short time before leaving office after losing the November election to Jackson, Strickland sent a letter to CMWD officials supporting GSWC. “As the State Senator for the District representing the Casitas Municipal Water District (Casitas) service area, I am very concerned with the Board’s actions to move forward with forcibly acquiring Golden State Water Company’s Ojai property by eminent domain,” he wrote. “There is no financial, environmental or agricultural benefit and puts current and future residents, businesses and farmers at risk.”

The city of Ojai and several local groups, including the Ojai Unified School District and the Ojai Valley Board of Realtors, are supportive of the concept of taking over GSWC’s Ojai service area.

CMWD’s study is expected to be completed sometime this month.

Depending on its findings, voters in the GSWC’s ojai service area could be asked to vote on a 30-year bond measure that would levy a property tax to pay for the takeover.

Jan. 14, 2013

Tim Dewar, publisher@ojaivalleynews.com

Almost a year into a three-year penalty phase, the average Golden State Water Company (GSWC) customer in Ojai has $59.40 more in their pocket. In March 2015, when the refund period ends, those customers can expect to have gotten $194.40 — or $5.40 per month — knocked off their bills.

The refunds are part of a multi-million dollar settlement between Golden State Water and the California Public Utilities Commission (CPUC), the agency charged with regulating utility companies that operate in the state.

Throughout its operating area, GSWC will refund a total of $9.5 million. Current customers in GSWC’s Ojai service area will split $986,463.

The settlement also mandates a rate-base reduction of $2.5 million, a $1 million fine to the state and future audits and oversight designed to prevent further mismanagement by the company.

The settlement stems from a 2007 CPUC investigation that found significant problems with GSWC’s contracting practices dating back to 1989. In May 2003, GSWC officials learned that two senior executives had awarded Richardson Engineering Company contracts that violated GSWC’s competitive bidding protocol.

In October 2003, GSWC fired those executives. One month later, an outside attorney — who was hired to look into the matter — told GSWC that Richardson had received approximately 100 contracts in excess of $20 million since the early 1990s, and many were in violation of its procurement policy.

In 2004, the engineering firm GSWC hired to review a sample of those contracts reported that of the 22 contracts sampled, GSWC paid above fair market value on six.

At that time, GSWC officials decided they were not required to report these incidents to the CPUC and continued to include the overcharged contracts in rate-base filings. This, according to the settlement agreement, “exposed GSWC’s customers to unjust and unreasonable charges and up to $31 million of past ratepayer harm.”

In February 2007, a senior Golden State Water Company official informed the CPUC about the internal investigation and the company’s failure to disclose the information to the commission. This prompted the CPUC to conduct its own investigation.

“What was troubling about these allegations was not only that the contracts were tainted with favoritism and larded with excessive costs,” explained CPUC Commissioner Michael R. Peevey, “but also that the company apparently made a deliberate decision to not disclose these problems to the commission. What came to light was a disturbing pattern of favoritism and other improper practices in Golden States contracting for capital projects. This was a serious problem for the ratepayers because Golden State’s rates for water service are set based on the cost incurred by the company. Typically all the costs paid by the company whether for capital products or water supplies or even for office equipment, are passed on to homeowners and other ratepayers in their water bills.”

GSWC disagreed with many of the CPUC findings, including that its failure to report the overcharges resulted in harm to ratepayers and that customer rates were impacted by the excess costs associated with the REC contracts. The report, however, did acknowledge that GSWC cooperated fully with the Commission’s staff during the investigation.

In addition to the monetary remedies and the fine, GSWC will also be subject to a series of three annual audits on its contracting practices over the next 10 years and it must provide sworn testimony documenting its efforts to improve internal controls as part of its next two general rate cases.

“This was a very, very ugly matter on a number of fronts,” noted CPUC Commissioner Timothy Alan Simon, “based on the allegations and what was disclosed by the whistleblower. It even got to the point where there were certain racial references that were made that, in my opinion, were blatantly offensive and I think not a good reflection on Golden State Water.

“The good news,” Simon added, “is I believe Golden State gets it. I think they are moving forward in a very effective and prudent fashion to remove what appears to be a culture of deceit, a culture of less-than-transparent operations within their company and in moving forward I commend them for weeding out these issues.”

Although he was pleased that GSWC was held accountable, Ojai City Manager Rob Clark said this was a perfect example of why so many in Ojai — and in other cities served by GSWC — have a hard time trusting the regulatory and rate-setting processes when it comes to a privately-owned utility.

“We were glad they were held accountable for their misdeeds and that the CPUC made it right for our ratepayers,” Clark noted, “but I don’t think the community has much confidence in the CPUC process. They accept input and they come out and listen to us and all that, but the fact that their rates are so much higher than other districts in the same watershed and that they were able to do these things makes us think the process is just not effective. A locally-run, locally-elected board is much more transparent and accountable to public.”

The city of Ojai, which holds the franchise agreement allowing GSWC to provide water service to its residents, is supporting local efforts to investigate the possibility of purchasing GSWC’s assets in its Ojai service district and having Casitas Municipal Water District take over providing water service to GSWC’s approximately 2,800 local customers.

The CMWD is expected to announce sometime this month whether it plans to move forward with the takeover and the amount it estimates voters in GSWC’s Ojai service area would need to approve in a bond measure to cover the cost of purchasing the operation.

Nov. 29, 2012
Angelique LaCour, OVN correspondent
Now that the presidential election is history, Ojai’s Friends of Locally Owned Water (F.L.O.W.) hopes to rally the community to get out the vote and pass a bond to buy Golden State Water Company’s (GSWC) Ojai operation and turn over its operation to Casitas Municipal Water District (CMWD).
Confident that the CMWD board of directors will pass a resolution to create a community facilities district and establish a dollar amount to fund the purchase, F.L.O.W. held a campaign kickoff event Wednesday at the Ojai Valley Inn & Spa.
F.L.O.W. director Ryan Blatz encouraged the approximately 100 attendees to sign up to “put boots on the ground” and educate their neighbors with the “simple facts why we must buy Golden State Water Company.”
Blatz also took issue with a full-page ad in Wednesday’s Ojai Valley News claiming, in part, that Food and Water Watch, a national organization, “trains and organizes local activists under the banner of Friends of Locally Owned Water (F.L.O.W.).”
The ad — paid for by the California Alliance to Protect Private Property Rights — does not, however, specifically claim that Ojai F.L.O.W. members were trained by Food and Water Watch.
“I can tell you unequivocally that there is no person in our group who has even heard of or been trained by this organization,” Blatz said. “These big corporations think they can come here and spread their lies — that’s why we need help to counter the misinformation Golden State is going to spend a lot of money to put out in the community.”
The Inn donated the use of a meeting room in support of F.L.O.W.’s campaign.
“We are fully behind this effort and thankful you are here since half of our 650 employees live in Ojai, and many are suffering from the high water rates,” said Pete Ells, the Inn’s managing director. “If our golf course was on Golden State water like the rest of our property, we probably wouldn’t have a golf course because we couldn’t afford the water.”
The big unknown is the cost of acquiring GSWC. That number is still being crunched by Casitas officials. But F.L.O.W. director Richard Hajas claims that no matter what that cost turns out to be, people need to understand that the issue is simply about water costs.
“Last year, Golden State took $5.3 million from the Ojai community for water service,” Hajas said. “If we had Casitas service we would have paid $2 million for the same water.”
Hajas emphasized that the difference in water cost alone between Casitas and Golden State leaves $3.3 million a year to buy out Golden State right now. Over the next 15 years F.L.O.W. expects that the difference in cost between the two providers will rise to approximately $10 million per year.
The impact of high water rates in Ojai is beginning to affect both property values and quality of life, said real estate agent Joan Roberts.
“When I show properties, I’m asked what water company serves the property,” Roberts said. “Real estate agents have so much on their shoulders already with disclosures, but now we have to let buyers know that their water bills are going to be high if they choose to live in Ojai.”
Golden State customer Elana Daley and her husband attended Wednesday night’s meeting. They own a commercial property on Bryant Street and a home on Grandview Avenue.
“We’re paying property taxes to support Casitas while paying Golden State’s high rates for water, and it just doesn’t make sense,” Daley said. “Another issue I have is that Golden State owes us $1.2 million in surcredits from a lawsuit more than a year ago, and we haven’t seen a penny of that yet.”
Many of the “Farewell to Golden State” partygoers signed up to host community education and outreach events in their homes, and go door to door in their neighborhoods to distribute F.L.O.W.’s “The Simple Facts” door hangers.
“When I was knocking on doors during my recent (city council) campaign, the No. 1 thing people wanted to know was if I was supporting F.L.O.W.,” said newly elected City Council member, Severo Lara. “I fully support the great grassroots work F.L.O.W. has been doing for several years now.”

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.