What Are We Doing?
Opposing the hostile takeover of Liberty Apple Valley
Greetings from Claremont! Perhaps you have already heard about our attempt to seize the assets of our local water system by filing an eminent domain lawsuit. As the town of Apple Valley is following in our footsteps, so to speak, I thought you might be interested in finding out how this endeavor turned out for us.
On October 10th, only three short years after the Claremont City Council voted unanimously to take over the system from its corporate owners, the very same council members pulled the plug on one of the most expensive self-inflicted financial disasters in California history. Our little town — which is only half the size of Apple Valley — lost $11 million and we have nothing to show for it but a massive hole in our General Fund.
It is important to understand that this didn’t just happen by accident. Rather it was the foreseeable consequence of passionate but uninformed citizen activism, reckless decisions by the city council, and self-serving advice offered by financially-interested lawyers and consultants.
As it happens, the very same lawyers from Best, Best & Krieger (“BBK”) who advised Claremont — and billed us more than $6 million to unsuccessfully litigate our takeover attempt — have been chosen to handle your case as well. And although it is always unwise and sometimes illegal for public officials to participate in government decisions that they have a financial interest in, your town council doesn’t seem to care that the city attorney’s own law firm provided advice on a decision from which it stands to make millions of dollars.
In Claremont, this proved to be a very costly mistake. Although we relied almost entirely on the competence and integrity of our lawyers, they utterly failed to identify what we now know to be the enormous costs and risks involved in the takeover of a water system — including the fact that the city would have to reimburse the water company for its legal expenses if we lost the case. Claremont was ordered to pay $7.8 million.
The citizens of Claremont also found out the hard way that Superior Court judges are not impressed by slogans like “local control,” nor will they simply rubber stamp a city’s decision to seize water utility property. Our high-priced BBK legal team was unprepared to demonstrate that the taking of the utility’s property was actually necessary and in the public interest — as the law requires.
That is an almost impossible standard to meet, particularly when a city with no experience in the water business is seeking to replace a firm with a proven track record. I invite you to read the court decision in the Claremont case, which is available on the city’s website. If you do, you will see just how weak of a case BBK put on. Unless these same lawyers can explain why Apple Valley’s situation is radically different from Claremont’s, there is no reason to expect that the outcome will be any different.
As a Claremont resident, I am naturally disappointed by the poor judgment exercised by our city council and staff, and the incompetent handling of our case by BBK. But at least we can say that no one ever lost $11 million in quite this way before. Apple Valley will not have that excuse.
— Jim Belna, Claremont, CA