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| Cal-Am settles over Felton water system | | Print | |
| Written by Peter Burke | Press Banner | |
| Friday, 06 June 2008 | |
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Five years after it began, the struggle for public ownership of Felton’s water system is likely over. UPDATE: The San Lorenzo Valley Water District Board of Directors voted 5-0 on Thursday night, June 5, to approve a motion approving the settlement between California American Water Company and the disitrict. The district will purchase Felton's water system. Five years after it began, the struggle for public ownership of Felton’s water system is likely over.  Following a standing ovation after officials approved the SLVWD purchase of the Felton water system, agency board members applaud Felton citizens for their successfull effort. Board members are, left to right: Fred McPherson, Jim Rapoza, Terry Vierra, Larry Prather and James Nelson. Lucjan Szewczyk/Press Banner The San Lorenzo Valley Water District settled with California American Water to buy the Felton water system for $10.5 million and assumption of the $2.9 million debt still owed on construction of the Kirby Street water treatment plant and other facilities. Cal-Am also donated 250 acres of watershed land adjacent to Fall Creek State Park to the district as part of the settlement. “We’re glad to have achieved a settlement and avoided the protracted trial process,” district general manager Jim Mueller said. The settlement came just days before the district would have met Cal-Am in court to determine the value of the system. In March, Cal-Am conceded the first phase of an eminent-domain trial, which determined that the publicly owned SLVWD had the legal right to purchase the system from the privately owned Cal-Am with public funds. The district’s board of directors must decide whether to go ahead with the purchase of the system in the next 60 days. They heard comments from the public at their regularly scheduled Thursday, June 5, board meeting. The effects of the settlement will be seen throughout the valley. Water rates for Felton residents will be significantly lower, Mueller said. Under Cal-Am, Felton customers pay about $180 per month, while customers in the SLV water district pay about $80 per month, Mueller said. Rates will now be the same for customers across the district. The entire district, nearly 6,000 customers, will foot the bill evenly to repay the $2.9 million owed on the Safe Drinking Water Bond Act used to build the Kirby treatment plant, Mueller said. The Felton system has about 1,300 customers and will make up slightly more than 20 percent of the district. What is the system worth? The key disagreement between Cal-Am and the district was the value of the system. In the final weeks before the trial, Cal-Am tagged the value of the Felton system at about $23 million while the district valued it at $7.6 million, Mueller said. Putting a price on the system was a complicated process that did not look at the physical value of Felton’s pipes, treatment plants and pumps. “Our position is that’s not how water utilities are sold,” Mueller said. Instead, the district looked at comparable sales of public water utilities in California and at the rate base — a complex formula looking at the amount invested in the system and the potential for profit as regulated by the California Public Utilities Commission. A main point of contention between Cal-Am and the district was whether the system should be valued as a private company or as a public utility whose profits are regulated by the PUC. “We came up from $7.6 million; they came down almost $13 million,” Mueller said. “We would say we achieved a good settlement.” Cal-Am also counted the potential value of logging and development on 250 acres of watershed land as part of the system’s value, something that would not likely be approved without complex permits that could take years to complete, Mueller said. Who pays for the system? In 2005, Felton voters passed Measure W, an $11 million bond to purchase the water system. Some of that money has been used for legal fees, but about $9 million is available, leaving the district between $1 million and $1.5 million short, Mueller said.
The district’s board of directors is discussing how to pay the difference. A victory for FLOW Felton Friends of Locally Owned Water popped a few wine corks in celebration Friday, May 30, after the settlement was reached. “We’re absolutely ecstatic,” said Jim Mosher, the head of FLOW’s legal team. “It was a five-year battle.” FLOW, a grassroots organization with a steering committee of about 15, fought Cal-Am and the company’s ownership, the German conglomerate RWE since 2002.
Jim Graham, FLOW’s spokesman, said the group was very happy with the settlement but thought Cal-Am’s donation of the watershed land was tricky. Since 2004 when the group amped up its efforts, Graham said the group has met twice a month to strategically fight Cal-Am’s water rate increases and how to aid SLVWD in the takeover of the system. Graham and Mosher said the group will now aid other towns that are fighting corporate water control.
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Hits: 888 Comments (26)
  written by mya, June 06, 2008
Felton bills are about $140 every TWO months, not every month. And FLOW is NOT grassroots, they are astroturf. Part of a larger Socialist organization dedicated to taking resource delivery out of private hands and into government control.
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 written by Ben Lomond Homeowner, June 06, 2008  What? I didn't get to vote on the bond or have any say in the buyout but as a SLV Water rate payer I get to pay for the $2.9 million dollar difference? What a rip!
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 written by Felton Homeowner, June 06, 2008
My water bill averaged about $60/month for a big yard. What on earth did we win? Another bond to pay off! Thanks FLOW.
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Votes: +4
 written by Patriot, June 06, 2008
Did anyone speak in opposition to this at the meeting? We need to organize and get the word out. How do we do this?
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 written by Another Felton homeowner, June 06, 2008
A 10 million dollar bond over 30 years will cost every homeowner (1330 Cal Am customers) about $750 per year for 30 years. This is for what? Local control? It's a regulated utility. Thanks for sticking us with the bill FLOW! You people are very bad at math!
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written by Patriot, June 06, 2008
Why wasn't this argued earlier? People should have been marching in the streets protesting this. We need to organize!
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 written by Alfredo Vargas, June 06, 2008
The Bonds floated for the purchase of the Cal/Am system were generated by a vote from a Mello-Roos Community Services District.
These types of districts are different from run of the mill assessment districts. For example, in the REAL world, you can fail to pay your taxes for almost five years, including interest and penalties, and then pay up and redeem your property. That is more than fair. In a Mello-Roos District, the government can begin foreclosure on a property if property taxes are only 91 days delinquent. This is a special present from the County Counsel's Office and County Executive Susan Mauriello. Be sure and drop them both a line of thanks, as well as the Board of Supervisors. report abuse
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written by mya, June 06, 2008
Where the h*** were you all when we were hollering what a bad idea this stupid Measure W was? Although, in your defense, the press didn't cover it honestly.
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written by Patriot, June 06, 2008
I wasn't living here when they took the vote. I want to know what we can do now. Is there any organization that opposed this? What are they doing now. Maybe we lost the battle but we haven't lost the war.
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Votes: +2
written by mya, June 08, 2008
The first thing we should do is get the tax liens reversed and remove the Mello Roos designation from our district. Then try to get an honest decent bunch of elected residents on the board.
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written by mya, June 08, 2008
Also, more clarification - Cal Am always made it clear from the beginning they would sell for $15 million. SLVWD knew this from the get go. SLVWD tried to value the system at $7 million. They paid double what they said the system was worth. Of course, we all knew SLVWD would end up paying whatever they had to. And we all knew Cal Am would get what they were asking form. This all played out between county government and corporate forces that had and have little to do with local ownership, rate relief and Felton residents. Somebody should write the real story about what happened.
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 written by Felton Homeowner, June 08, 2008
First of all, Fred McPherson, Jim Rapoza, Terry Vierra, Larry Prather and James Nelson (as well as Barbara Springer) should be names to be remembered in the future. I've live it Felton since January 1996 and my water bills have averaged $59.20 per month for a large household and big yard. Flow as guaranteed that this has at least doubled! I opposed this from the beginning, but had no idea that the "one sided" town hall meetings and "pizza parties" actually worked in buying this vote. Additionally, people opposing FLOW were "booed" and "hissed" upon at the town meetings and those who displayed opposition got their cars and signs vandilized. Since we are now paying for a HUGE amount of land, I would hope that we all receive deeds for a portion of this land--just in case they decide to log this in the future or some other income producing proposition. Finally, the person that wrote this article and stated "Water rates for Felton residents will be significantly lower, Mueller said. Under Cal-Am, Felton customers pay about $180 per month" is definitely under the payroll of this paper.
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written by Ben Lomond Homeowner, June 09, 2008 What ever happened to SLVWD using the $11 million from the Waterman's Gap sale to cover the $2.9 million shortage on the CAL Am deal? Oh, did they decide that a completely "free" water system sounded better than digging in their own pockets? By the way, when it comes to remembering these crook's names don't forget Jim Mosher who has been FLOW's (and apparantly Felton ratepayers) mouthpiece for the last few years. I would like to sock him in his mouthpiece about now!! FLOW kept harping on how "local control" would improve things but now you can see that you have five men making all the decisions for not only the Felton customers but all SLVWD ratepayers. It seems to me that FLOW made it even easier for your water company to do whatever it damn well pleases with "your" water system. The photo of these "good ol' boys" standing and clapping made me want to throw up. Boys, don't break your arms patting yourselves on the back!!
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 written by Lynn, June 10, 2008
It is my opinions that those 5 men are crooks who, along with Sprenger, the VWC and the county, orchestrated the biggest ripoff Felton has ever seen.
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written by Patriot, June 11, 2008
If we were serious about doing something, we'd organize. This is sounding like a bunch of bellyaching.
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 written by Bryan, June 11, 2008
Patriot - what would you suggest? There's are numerous reasons that people are expressing frustration - tax liens, mello roos district, lack of honest press coverage, the characters running FLOW who are going to end up running SLVWD.
Groups tried to organize to fight the measure, but were shot down by the press. What do you suggest? report abuse
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written by Patriot, June 11, 2008
When I was working for Ron Paul, we had a bunch of psuedo-Libertarians who'd want to talk and talk and talk, but just try to get them to go stand on a street corner with a sign or go door to door to get signatures.
You don't rely on the press. Real grassroots groups talk to the people directly. Did you all do that? report abuse
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written by Lynn, June 11, 2008
Patriot, that was done extensively. It's a surprise that the measure passed as so many people seemed opposed to it. People were intimidated into voting for it, some were intimidated into not voting at all. There has been much speculation that the voting was rigged. I suppose there was a process for dealing with that at the time, I for one just got burnt out trying to battle the insurmountable cabal of the county, slvwd, flow and the press.
Any groups that gained any headway were vandalized and...sound familiar...threatened with boycott. There is a contingent keeping an eye on flow and slvwd activities. Perhaps we/they should ramp up. report abuse
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written by Patriot, June 11, 2008
Is there a group that organized to fight this? It sounds like just individuals raised their voices.
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 written by Bryan, June 12, 2008
Well Patriot? Name for the new group?
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written by Patriot, June 12, 2008
New group? Isn't there an exisiting one? What group fought it during the bond vote? That's probably what we should use. No sense in re-inventing the wheel.
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 written by Lynn, June 12, 2008
Patriot, there were several groups which opposed the measure, not just 1. I will contact people from every one of those groups and see if there is solid interest in raising concerns again. Unfortunately, many have thrown their hands up in the air. Many have also been threatened - physically and financially. In my opinion, there are several issues to fight - illegal rendering of the terms of the bond, questionable voting demographic, tax liens, Mello Roos district. Perhaps just exposing the injustice of the whole process.
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written by Felton Homeowner, June 12, 2008
No one has mentioned that the voting process in itself was absolutely shady. People exempt from paying for the bond (personal well water) were allowed to vote on the issue. How can you fight this?
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 written by Ira, June 12, 2008
That was brought before a judge. But that judge was a friend of Almquist the shady character who started this whole mess. So even though the residents who complained had a valid judicial argument, it was disregarded. It should be brought up again. But I don't know what statutes of limitation are in effect. Good point though.
Oh, and Mr Patriot? If a group rises up again to fight these criminals...will you write about it...or ignore it. report abuse
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 written by Art Funkel, June 17, 2008
http://online.wsj.com/article/...78663.html
Wall Stree Journal has a story about it. report abuse
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written by mya, June 19, 2008
The WSJ got it wrong too. The bills are $140, not $180. It's every 2 months, not every month. Their comparision does not hold water. They also fail to mention the $50/month additional tax that Felton homeowners pay from the cost of the bond. All in all a disappointing article from a publication that should know better.
They got all hung up on the false David and Goliath thing. report abuse
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