Inland Empire Taxpayers Association Urges Claremont City Council To Stop Seeking Acquisition Of Golden State Water

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The Inland Empire Taxpayers Association engaged the Claremont City Council, Tuesday evening, May 14th, 2013 on their initiative to acquire Golden State Water, demanding answers for the residents of Claremont, CA.

On Tuesday evening the Inland Empire Taxpayers Association (IETA) urged The City of Claremont City Council to abandon their efforts to acquire Golden State Water. The IETA’s mission to protect the interests of local taxpayers, led the IETA to engage on the water utility issue at hand with the City of Claremont. The City chose not to address the taxpayer issue.

It is the opinion of the IETA that the residents of Claremont deserve answers to many questions regarding the proposed utility takeover, including:

1. Why did The City of Claremont offer Golden State Water $54 million without a vote of the people or public explanation of how taxpayers will pay for it? (The City of Claremont published this information Tuesday, November 16th on its website) What would the City have done if the water company had accepted the offer? Would taxpayers have been obligated to pay for it without any public discussion or plan that demonstrates the City can create a water department and provide service? Why should Claremont residents pay to create a new government agency with no assurance that it's either financially or operationally feasible?

2. Dr. Rod Smith, an economist from Claremont, conducted a study that suggests water rates would increase by 30 percent if the city pays $54 million and by 70 percent if the cost is $105 million. What evidence does the City have to show that its takeover plan will reduce rates? (Source: Golden State Water Study- December 19, 2012)

3. How will The City of Claremont pay for a water takeover? Taxpayers could incur more than $100 million in tax debt, including principal and interest. Will the City use an existing revenue stream or increase property taxes and/or parcel taxes that impact home equity? Will public safety services be impacted? School infrastructure projects? Will the City allow voters to vote whether or not to tax themselves to pay for a takeover, and will the City respect the 2/3 vote requirement as required by Prop 13?

4. News reports suggest that The City of Claremont has refused to provide any feasibility or financial information to local newspapers - both the Courier and Daily Bulletin - regarding their efforts to acquire the local Water Company. What does the City have to hide? See Wes Woods II, Staff Writer for the Daily Bulletin, article entitled 'Claremont not providing water appraisal' on March 4, 2013.

5. If the goal is to save money on water bills, why doesn't the city eliminate the 5.5 percent water tax that is included on current water bills? Where is that money going now?

The bottom line, in the opinion of the IETA, The City of Claremont has failed to show that they have the ability to run a water system any more efficiently than Golden State Water is currently doing. The City has not proved they will be able to save residents money on their water bills. The City has not presented a viable plan for financing the purchase of Golden State Water, and the residents of Claremont are the ones who would have to foot such a bill.

As a Taxpayers Association the IETA is very concerned about recent rate increases, and according to the evidence produced to the IETA there is simply no evidence…no expert opinion…to suggest that rates would be lower under the City. In fact, according to the IETA, all available information suggests rates will increase, perhaps to double of what they currently are now, a 30 to 71 percent increase could be likely.

The IETA feels strongly that establishing a new government bureaucracy is not the answer, and will ultimately not be in the taxpayers’ best interests. The IETA is asking the City to abandon this effort, as the financial burdens and risks to the taxpayers of Claremont are just too high.

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