To the Town Council (November 17, 2015)
[…] As I recall the attorneys for the City originally estimated the cost to acquire the system would in the neighborhood of $10-$12 million. I believe So. Cal. Water's original asking price was around $25 million. After roughly 3 years of litigation, the jury awarded So. Cal. Water around $28 million including the value of improvements made during the acquisition process. The DWP eventually issued around $30 million in bonds to finance the system acquisition. The original bonds were refinanced in 1992 to get a lower interest rate and will be paid off in 2022.
While I was proud to serve on the DWP Board and believe the acquisition of the water system from So. Cal. Water was beneficial to our community; it came at a high price. The cost of bond payments has forced our water rates to be significantly higher than those of the Big Bear City Community Services District; our neighbors to the East. We also originally believed that by operating the system more efficiently we could make the desperately needed system improvements without raising rates. This was not the case. Within two years it became clear that a ‘system rehabilitation charge’ was necessary. This significantly raised our rates. […]