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Cam Noltemeyer: Playing Monopoly with SCV water supplies

Environmentally Speaking

Posted: April 2, 2009 12:52 a.m.
Updated: April 2, 2009 4:55 a.m.
In 1999, Castaic Lake Water Agency bought Santa Clarita Water Company in a deal that, for the most part, occurred behind closed doors. Unbeknownst to the public, they filed for condemnation, paid $63 million in cash to the Bonelli family, apparently without a board vote on the matter, and bought a company that they could not legally own. They used public tax dollars to pay four times more than the appraised value of the water company at a time when two major wells were shut down because of amonium perchlorate pollution.

The public had little opportunity to object. But four courageous women did file public interest litigation based on the fact that CLWA’s enabling legislation did not permit them to own Santa Clarita Water Co.

Several years later an appellate court ruled that indeed, the ladies were right. So Castaic Lake Water Agency went to the state Legislature and got the Water Agency’s law changed, the very thing they should have done in the first place.

Why would community members bother pursuing this issue? According to Lynne Plambeck, taxpayers should not have had to pay four times the appraised value to acquire a water company with polluted wells in a closed-door deal.

She also claimed that the ratepayers of Santa Clarita would end up with increases to their water bills to pay for the privilege of having Castaic Lake Water Agency own them.

Sure enough, Castaic Lake Water Agency did raise the rates to cover their purchase.

Now we are facing the exact same situation with Valencia Water Co. The community heard nothing of Castaic Lake Water Agency’s intention to condemn and acquire Valencia Water Co. until the information was disclosed by a local blogger who apparently discovered it in obscure public documents.  

At a recent public CLWA meeting, the financial officer disclosed that CLWA had about $100 million in cash. Will this condemnation again be a rushed cash purchase without public review or knowledge?

Castaic Water Agency does not have a legal right to operate a ground water company except within the boundaries of Santa Clarita Water Co.

They have not told the public how much of our tax dollars will be spent on this back room deal, or even asked customers of Valencia Water Co. if they want to be a pawn in a game of water monopoly. And they haven’t told the customers of Valencia Water Co. how much their rates will go up.

But how will this affect the environment? That’s easy to predict.

Will a company over extended with debt from overpriced acquisitions that controls both the ground water and the State Water supply from Northern California really have any incentive to conserve?

Won’t it need to sell more water to cover its costs? Will CLWA encourage new development in order to provide income for this purchase?

Will they then have to pump more ground water, affecting the water quality of our valley and the health of the Santa Clara River?

Will a water company that no longer is subject to the checks and balances of competition, accurately and honestly report available water supply and water quality issues?

Will they have adequate funding to address future water pollution problems after this expensive purchase?

If Castaic Lake Water Agency goes through with the purchase of Valencia Water Co., it will control approximately 90% of the water in the Santa Clarita valley, according to a recent Signal article.

During this dismal economic downturn, brought on by companies that are “too big to fail,” do we really want to create a water monopoly here in the Santa Clarita Valley?

Perhaps if Valencia Water Co. must be sold, Newhall County Water District, a responsible water retailer that surrounds Valencia on three sides and has no legal limitations to such an acquisition, would be far better for the community.

They have already demonstrated their desire to make environmentally sound decisions. and such a purchase would not create a water monopoly.

Cam Noltemeyer is a member of the board of the Santa Clarita Organization for Planning and the Environment (SCOPE) and a Santa Clarita resident. Her column reflects her own views and not necessarily those of The Signal. “Environmentally Speaking” appears Thursdays in The Signal and rotates among local environmentalists.


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