Corrected Ojai takeover figure below
Public Water Now Holds Forum on the Feasibility of a Cal Am Buyout
PWN’s guest speaker, Richard Hajas, spoke from experience Monday night. Former general manager of the Casitas Municipal Water District in Ventura County, he was the key author of the feasibility study for the community of Ojai in its recent successful buyout of the private Golden State water system.
Hajas worked as a volunteer with Ojai Flow, the citizens group seeking to municipalize Ojai’s water system. He did the feasibility study pro bono. “Our Feasibility Study was our bible—it had all the facts we needed to argue for local public control,” he told the audience.
To determine if such a takeover is affordable to ratepayers, Hajas explained that the rate base is critical to the cost estimate. A reasonable estimate must also include the fair market value of the system, the costs of a 30-year bond to cover the purchase, the legal costs, and the costs of getting the public agency prepared to take over the operation.
Why did Ojai want public ownership of their water? Hajas said, “The cost of water from the private provider was the big problem. Our costs were more than twice as much as our neighbors and Golden State Water was taking $6 million a year out of our small community.”
The Monterey Peninsula has the most expensive water in the country. The audience could definitely relate to Ojai’s motivation! Although Ojai has a much smaller water system than the Monterey Peninsula, the community successfully fought the corporate Goliath’s legal onslaught and publicity campaign and won public ownership.
Hajas cautioned that the current private water owner will do everything possible to discourage the public from such an undertaking. “Water is a very profitable business,” he said, “and the private owner will definitely not go away quietly.”
It took seven years and cost a total of $60 million for Ojai to buy out Golden State Water. When it came to a public vote Hajas felt confident in the outcome. (Article originally said, incorrectly, that the total was $44 million.)
“I’m a numbers guy. Voters approved the process to purchase the Golden State water delivery system with an 87% majority.”
Under public ownership long-term savings for small usage customers is project to amount to hundreds of dollars per year and much more for larger customers. For the Ojai community of 5,000 to 6,000 people, the total savings over the first 10 years could reach $25.8 million.
Asked if it was worth it, Hajas said, “Yes, because it will cut the annual cost increase to ratepayers in half, from 8% per year to 4%, over a 20-year period, saving many millions of dollars. And I stress the importance of looking at such a project over the long term. It’s long-term savings. My kids and grandkids will see the greater benefit”.
George Riley, director of Pubic Water Now, ended the meeting saying, “PWN wants to make the public aware of the problems and costs related to private water systems. Their motivation is profit, they’re answerable to their shareholders, not us. It easy to see why 87% of the water systems in the U.S. are publicly owned and operated for the good of the communities they serve. I don’t like to be the bearer of bad news, but more water rate increases are coming from Cal-Am. We need to take action!”
Public Water Now will begin collecting signatures in October to qualify municipalization of our water system for a vote on the November 2018 ballot.
Melodie Chrislock, the communications director for Public Water Now, can be reached at MWChrislock@redshift.com