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City Seizing Private Water Company And The Reason Is Nuts

claremont california water bill controversyA California city government is pioneering what could be a dangerous new expansion of the use of eminent domain to seize private property. The Claremont City Council will vote on a resolution to seize the assets of a private utility on March 25, in an attempt to lower water bills.

Council members say they are taking the step because the Golden State Water Company, which is private, has refused to sell the city the system that supplies water to the Los Angeles suburb. The council unanimously voted to pursue eminent domain in November because of public outrage at water bills that increased by 16 percent.

“The city fathers of Claremont, California, are attempting a move that should frighten every American, a move that would seem to prove that government thinks it has no limits on its power,” Warner Todd Huston wrote of the move at the Wiz Bang Blog. Critics like Huston believe Claremont’s action could lead to an even further expansion of eminent domain abuse.

The Danger – Today And Down The Road

Critics of eminent domain are concerned about the Claremont move because California’s eminent domain protections are weak. The Orange County Register noted that the state has no laws against local governments seizing property and turning it over to private owners. This means it could be possible for Claremont to sell or lease the water system to one of Golden State’s competitors at some point in the future.

Southern California was ground zero for eminent domain abuse in the early 2000s. The region saw several high profile cases where cities tried to seize property and turn it over to private developers to build retail stores. One notorious case involved the city of Cypress, which tried to seize land from a church and give it to Costco.

Ultra Efficient Water Filter Fits In Your Pocket!

The real reason Claremont is considering eminent domain is to get out of paying a fair value for the water system, the Register alleged.

“In Claremont, the city’s $54 million offer is far below what Golden State and its’ economist say the system is worth,” a Register editorial noted. An organization called the Howard Jarvis Tax Payers Association estimated the true value of the water system at $200 million.

Taxpayers Could Be Burdened With Debt

The purchase of the water system would have to be financed by bonds which taxpayers or water system customers would ultimately have to pay off, the Register added. Another expense the city would face is operating the system: Claremont would have to hire an entire staff to run it.

“To purchase the water system, residents will have to pay hundreds of millions of dollars,” Julie Hooper, a spokeswoman for Golden State Water, told The Inland Valley Daily Bulletin.

“The city of Claremont cannot replicate the drinking water service we provide to customers every day,” Golden State Water Vice President Denise Kruger said.

News reports indicate that Claremont is considering contracting with the neighboring city of La Verne. Under a proposed agreement La Verne would operate Claremont’s water system for it.

Kruger alleged that the city has already spent $800,000 on the eminent domain plans.

Hooper said the city is trying to cover up the true cost of the eminent domain. Golden State has sued Claremont in a bid to stop the eminent domain abuse — a move that could cost the city another $200,000 in legal fees if it loses.

“We’re disappointed that the city is choosing to spend hundreds of thousands of dollars to keep important information hidden from residents,” Hooper said.

No Big Impact On Bills?

There is also a possibility that city residents won’t see their water bills fall that much even if the court lets the eminent domain attempt go through. Presentations about the proposed takeover at a November city council meeting indicated that water bills would only drop by 5 percent to 10 percent.

“I was struck by how small the savings are on monthly water bills, even in the best-case scenario,” Claremont resident James Belna told the newspaper.

So far there is no indication that other California communities are contemplating such takeovers. Yet with the ongoing drought in the state driving up water rates such moves are still possible.

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