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Ojai Voters to Decide Whether to Buy Out Private Water Company

| August 27, 2013
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Pat McPherson, an early organizer of the political campaign to buy Golden State Water’s assets in Ojai, estimates that 80 percent of voters in town support the plan. (Chris Richard/KQED)

Pat McPherson, an early organizer of the political campaign to buy Golden State Water’s assets in Ojai, estimates that 80 percent of voters in town support the plan. (Chris Richard/KQED)

By Chris Richard

Walking Ojai’s oak-shaded streets, you pass yard sign after yard sign emblazoned with the slogan: “Stop the Golden State Water Rip-Off!”

Golden State is Ojai’s for-profit water company. Residents say they pay more than twice what people in neighboring communities pay for their water.

Today, voters in this rural community 75 miles northwest of Los Angeles will decide whether to buy out Golden State.

The Ojai activists aren’t alone in wanting to ditch private water suppliers. In May, a citizens group on the Monterey Peninsula launched a campaign to purchase the private water system there. And in Claremont (Los Angeles County), activists dissatisfied with Golden State rates are monitoring events in Ojai. Five years ago, residents in rural Felton (Santa Cruz County) approved the bond-funded purchase of their water system from the private California American Water Co.

Ojai’s Measure V would establish a Mello-Roos community facilities district to raise funds for a takeover by the neighboring Casitas Municipal Water District. Landowners in town would pay off up to $60 million in bonds through special assessments on their property. The election is the latest in a series of small-town revolts against corporate profits in water supplies.

Most of this affluent mountain enclave just east of Ventura remains well-manicured. But Richard Hajas said that in some neighborhoods the financial strain is starting to show as people stop watering their yards.

Leading a visitor on a tour recently, he stopped in front of one sun-blasted yard. There was a neat row of rose bushes along the front garden wall, all dead.

“It’s house after house that looks like it’s been abandoned,” he said. “And they’re trying to conserve water in every way they can, and it doesn’t work.”

Ryan Blatz, who serves with Hajas on the pro-Measure V campaign committee Friends of Locally-Owned Water, said the Mello-Roos plan makes good economic sense.

“This is a good tax, because at the end of the day, it’s a tax that saves us money,” he said.

Blatz says right now, switching to Casitas would save Ojai ratepayers a little more than $3 million annually. But in addition to the savings to be realized by avoiding Golden State’s higher charges, voters should also consider the disparity between Golden State and Casitas average rate increases, Blatz said.

He said over the past 20 years, Golden State’s average annual rate increase has been 8 percent. That’s double the annual average for Casitas in the same period, Blatz said.

Assuming those disparities continue, Blatz estimated that dumping Golden State could save Ojai ratepayers more than $500 million over the 30-year life of the bond.

Ojai resident Twila Carlsen is skeptical. She said too many of the pro-Measure V arguments rely on optimistic projections. Meanwhile, the written plan to pay off the Mello-Roos bond would assesses property by size, Carlsen said. And she fears the assessment on her acre-plus lot could eat into her Social Security.              .

Patrick Scanlon, vice president for operations at Golden State, said much of the criticism directed at the company is unfair.

“Our water rates are reflective of what it costs to provide water service,” he said.  “Measure V, of course, includes higher property taxes for years without anything that guarantees lower water rates.”

Historically, water systems have shifted between private and public ownership based on who had the capital to build and maintain pipelines and pumping stations.

Tony Arnold, an expert in water privatization at the University of Louisville, said the 1980s and ‘90s brought a wave of corporate purchases across the country as cities tried to cut costs.

But Arnold said some companies have had a hard time balancing service requirements and profit. And public services don’t have to answer to investors.

“That gives the public sector operators more opportunity to offer services without increasing the rates, or maybe doing it more gradually,” Arnold said.

Pat McPherson, an early organizer of the political campaign to buy Golden State Water’s assets in Ojai, estimates that 80 percent of voters in town support the plan.

According to a report by Food and Water Watch, which supports publicly run water agencies, between 2007 and 2011 the number of Americans served by private water companies fell by 16 percent.

“It just makes sense for ratepayers to have a local public water institution that is accountable to them,” said Adam Scow, a Food and Water Watch spokesman. “Right now, the companies have a built-in disincentive to encourage conservation, because the more water they sell, the more money they make.”

The measure imposing a new tax needs a two-thirds majority to pass. McPherson hopes his neighbors share the outrage against Golden State that he feels every time he waters his yard.

“They can’t say it’s better managed. They can’t that they’re more responsive to their customers than Casitas will be,” he said.

“They cannot say that they’re going to alleviate the prices that we’re paying.”

Financial disclosure forms show residents and local businesses are chipping in to the bond campaign. The only cash contributor so far to the opposition is Golden State.

Resident Paul Tolejko said it doesn’t require a big-budget advertising campaign to make him question the buyout plan.

“I’m not prepared, and I know a lot of people in my neighborhood are not prepared, to put liens on their property for that length of time without any guarantees,” he said.

Organizers of the plan to take over the water system say internal polls show they have the votes they need.  Still, they’re not taking any chances. They’re planning an intensive get-out-the-vote drive until polls close tonight.

 

 

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  • Scott

    Just a word of caution to the community. As a county health inspector specializing in water in Northern Cal where similar complaints are voiced about high water costs, I just hope that everyone understands the cost of maintaining infrastructure and complying with regulations. One small water system I worked with was loosing 50% of their water through leaks and the only solution was a complete replacement of the incorrectly sized main line from the water sources to the storage tanks. It took money but they also saved alot on electrical costs of pumping water through the leaking pipes. Many small water systems have not complied with current regulations for years and the cost for both monitoring and upgrading treatment equipment, especially for surface water treatment, can be very expensive. In some cases, long-term neglect is causing much of the dramatic hikes throughout the state. It would be counter productive if new operators of the newly organized water system were attacked publically, once the reality of logistics become known. In our society, it’s often easier to resort to shrill complaints than to wrestle with real problems.

    • richsbca

      The water system will be taken over by Casitas Water district (who GSW purchases its water from and re-sells to parts of Ojai). Casitas Water district has been in Ojai since the early 50′s. I think they know a thing or two about water systems.

  • JT

    Ojai should also consider other Communities and Cities that have regreted taking back their water systems, thinking they could do the same job, while maintaining the same level of service or health concerns, or avaliable professional staff. By adding this system to the Casitas grid, you will have an increase need for staff, and their benefits as well. Studies show that unless the water system is in tip top efficiency, and substantial upgrades… that a substantial amount of upgrades will be needed. This cost WILL be passed on to ALL Ojai surrounding customers. The amounts of money already spent on both sides of this political move, WILL cost the entire Ojai Community hundreds of thousands of dollars.

    • richsbca

      JT, it’s not a political move…. It’s about stopping the profiteering of water by GSW! People 2 miles down the road have water prices that are 3 times lower than GSW’s gouged rates. If you include the tax that subsidizes the rates, it’s still much, much less.

  • richsbca

    Golden State water has had numerous chances to ‘do the right thing’, but all they’re willing to do is talk. Talk isn’t what the rate payers need and since GSW isn’t willing to lower their extremely high rates we have voted to get rid of them!

    They say that they are only charging the rate payers for the cost to provide water, yet they have 0 transparency and WILL NOT allow the rate payers to see the books. This means they have something to hide which is obvious since each rate increase request has the same reasoning as the previous and in the end these projects never get done and the money goes into the pockets of GSW administrators and shareholders!

    GSW plays this sick and destructive game with all it’s forced ‘customers’ who have no choice. It’s a known fact that when a company operates under monopoly conditions they stop being responsive to customers and rates skyrocket! To make things worse the CPUC seems to be more interested in their charge on rate payers bills that gets larger with higher bills! The CPUC is no advocate of the public as they were intended to be!

    In the end GSW will do all it can to make this process as expensive as possible as a final kick to the rate payers of Ojai on their way out the door which just goes to show the money hungry profiteering mind set GSW must have! I hope other communities follow suit to STOP THE GOLDEN STATE WATER RIP-OFF!