Troy Becker's Response to Denise Kruger's Choices for Ojai water customers

By Troy B. Becker

The Right Choice For Ojai Water Customers

Quality Service Golden State contends that it "takes great pride in the quality and reliability of our service." Yet how would anyone know this, when they are not conducting customer surveys as required by California law? The last I checked, their water system broke in Ojai over 80 times in one recent year. Of course, who knows the actual number, since no one is reliably capturing the numbers? Do they count the times Ojai Resident Jon Whaley has sought assistance with water pressure as one or twenty complaints?

Golden State has poor water service and had their rates reduced because of their poor service.

We deserve fairness in rate increases, not Golden State Water Company (GSWC) investor needs for ROI.

Ms. Kruger claims that their own "rates requests and risk of rate increases are better than a fixed property tax increase."

Really? Let's look at the historical rate increases in Claremont, CA., under GSWC.
- in 1996, sought an increase of 56% in rates, was given by the PUC an increase of 12%
- in 1999, sought an increase of 19.37% in rates, was given by the PUC an increase of 10%
- in 2002 sought an increase of 43.84% in rates, was given by the PUC an increase of 18.16%
- in 2005 sought an increase of 27.24% in rates, was given by the PUC an increase of 11.54%
- in 2008 sought an increase of 37% in rates, was given by the PUC an increase of 20%
- in 2013 is seeking an increase of 25.54%.

So are we supposed to believe that compounding 14% over five years is somehow better than a fixed rate and locally owned water? Give me a break. Let's do the math. The attached chart shows the average GSWC average customer's bill over a period of thirty years, at the current average yearly increase actually attained by GSWC, in comparison to the average Casitas customer over the same period and based on the historical rate increases. In a nutshell + the Casitas Rate will be $2,545 per year. The average GSWC rate will be $21,558 per year! . Ojai already has several CFD's (Community facility districts). They are called the Ojai Sanitary District, or Meiners Oaks Water, or Ventura River water. This is the same type district Mayor Betsy Clapp is proposing for our Recreation department: Not for Profit, responsible to the Community and local directors. GSWC is a for-profit Wall Street traded corporation with Shareholders to answer to. Like any investor a high demand is placed on increasing returns on their investment (ROI).

GSWC implies that it owns our water?

GSWC slickly refers to our water as theirs. This is not true: the water belongs to us; GSWC only owns a franchise, a franchise whose delivery existence our Ventura County Board of Supervisors has decided to put a hold on pending the resolution of this fight, a franchise that states that the ratepayers specifically have a right to buy it back at any time. Ojai FLOW states that this amount or the cost of the water company will not exceed $33 million, and they are correct. They have done their homework; their estimate is based on the Federal, State, California Public Utilities, and the Federal Securities and Exchange Commission reports that Golden State's Water self-reports on their annual tax report. If GSWC says otherwise, they must be manipulating or falsifying their tax reports. Is this done to avoid paying their taxes?

GSWC argues that the cost to fight this battle is too high for customers and that there is some unknown liability we are all going to be saddled with. Didn't we (the City of Ojai) sell the water delivery system franchise to GSWC on May 8th 1967 for a simple 2% of revenues? It sounds like GSWC doesn't want us to buy their cash cow. This same agreement also gives us the right to take back this system as the agreement term is "indeterminate."

Ms. Kruger warns us to not be foolish like the people in Felton, CA. Ms. Kruger contends that Ojai is just like Felton and other towns that have private water purveyors. She says that Felton overpaid and so will we.

In the Felton case, in which the city of Felton forced the private water company to sell their water delivery system back to the citizens, a jury was impaneled to decide the private water company's value. Four days from trial, the private water company rejected the jury method and settled for 35% of what they contended it was worth. Juries see right through a lie.

In the Felton case, GSWC contends that the citizens paid 5.7 times more than Felton's initial estimates of the value of the water delivery system. Ms. Kruger and GSWC did not explain that the purchase price included 250 acres of Redwood Forest, which accounted for the difference in purchase price.

AREN'T WE COMPARING apples to apples?

Golden State Water takes a rate increase EVERY YEAR and gets to add new charges for past years.

GSWC: "Casitas has stated unequivocally that they will not expose their existing customers to any costs associated with the takeover. Therefore, current Golden State customers will bear the full cost of a takeover as well as all ongoing costs to receive service."

GSWC customers pay the ongoing cost of overcharging now. Why did GSWC have to refund $12,000,000 because of fraudulent overcharges? Why did the CPUC fine GSWC? Was it because of GSWC's Best Practices? A $12,000,000 penalty for doing a good job?

WHEN the takeover is successful, we will bear the full cost and own the system. It will cost more if we do nothing. GSWC takes an average 7.9% rate increase every year, and it adds prior year costs. Casitas took nothing for 3 years, then a 3% increase. This is nothing compared to 7.9% each and every year. Look at the example of Claremont. At this rate, in ten years they will own our town.

GSWC is trying to divide and conquer.

GSWC: "Currently, 70 percent of Ojai customers have a 5/8 inch meter, with an average monthly usage of approximately 9,000 gallons at a cost of approximately $73. There are no additional charges for site visits, calls to the customer service center or rapid response in emergencies."

Do you know anyone paying $73 per month for water? Did they forget the meter charge in that figure? Ask anyone. I know of people who live here only 6 months a year and pay more than $73 per month when the water is turned off. Wait until they get their rate increase in Jan. 2013! It will really bite you again this year and every year. GSWC customers are already paying 60% more than they should.

Does GSWC think this is going to go away because of their idle threats? The issue is simple: Rent and have no control, or Buy and determine our own fate! It is only a matter of time. And the sooner we get this done, the sooner the time value of money will make this an afterthought for the citizens of Ojai. Property Tax or monthly meter charge?

GSWC + "For these average customers, a property tax must be paid, regardless of the amount of water used."

It sounds just like an existing GSWC meter charges, doesn't it? Also, the last time I checked, property tax payments are tax deductible. Are your water bills?

Maybe GSWC should check existing Casitas rates. Water users there pay a fee for the meter, and the fee must be paid regardless of the amount of water used. Additionally,the Casitas rate is much lower than GSWC's rate.

GSWC says, "We believe that a transparent process will illustrate the facts and that customers will recognize that a takeover will increase water costs without providing certainty of long-term rates or service levels."

The people at GSWC are not stupid. They are playing on our fears. The only fear we have is that we are going to lose our homes, our livelihoods, and our valley to a corporate bully.

Troy Becker, owner of Ojai Pool Store, is a City of Ojai Planning Commissioner and is running for Casitas Municipal Water District #5.