On October 10, 2017, the Claremont City Council approved a settlement agreement with Golden State Water Company ending the city’s efforts to take over the water system that Golden State operates within the city.
The City of Claremont had offered Golden State $56,335,000 to acquire the Claremont Water System. Golden State rejected their offer. Claremont then filed a lawsuit to acquire Golden State’s water system by eminent domain. In December 2016, Superior Court Judge Richard L. Fruin, Jr. dismissed the city’s complaint. The city followed with a notice of appeal in early February 2017.
In mid-February 2017, Judge Fruin ruled that the city must pay $7.4 million of the legal fees claimed by Golden State. (For additional background, see “Superior Court Dismisses City of Claremont Complaint to Condemn Golden State Water Company System,” JOW Winter 2017 and “Claremont to Appeal Decision in Water System Take-Over Case,” JOW Spring 2017).
On the advice of counsel hired for the appeal, the city council decided to end its quest to take over the water system and pursue a settlement on the legal fees. Under the agreement, the city will pay a total of $4,808,480, with $2 million due by the end of 2017. The remaining $2,808,480, which is considered interest on the remaining balance awarded by Judge Fruin, will be paid in annual installments of $234,040 per year over the 12-year term of the agreement. The remaining $5,851,000 awarded by Judge Fruin will be forgiven under the condition that the city does not file another Resolution of Necessity during the term of the agreement. If the city does file a Resolution of Necessity, the remaining balance will be due immediately, and the interest paid will be lost.
The city and Golden State issued a joint statement emphasizing their common commitment to serve the community and offering the settlement agreement as a new beginning after a five-year period of division:
“The City of Claremont and Golden State Water Company have agreed to end the legal conflict that has been a source of division for the last five years. Despite our past differences, we share a commitment to serving the people of Claremont and will work together in the future to ensure the Claremont community remains a great place to live, work, and raise a family.
Golden State Water Company leaders and staff are dedicated to providing quality customer service and expert operation of the Claremont water system. Golden State Water Company will continue to provide the quality and reliability of water the community expects in the most professional manner. Likewise, City leaders will steadfastly work to represent residents with a focus on ensuring the water service is the highest quality and the community is kept informed and involved.
With this shared vision, the City and Golden State Water Company came together to forge the 12-year agreement. This resolution is a new beginning for the community, and we look forward to building and maintaining a strong relationship, recognizing that collaboration is better than conflict for the people of Claremont.”
Written by Marta L. Weismann