What Are We Doing?
Opposing the hostile takeover of Liberty Apple Valley
Avoiding the Claremont disaster, as Belna characterized it, was the topic of a presentation he gave to some 80 Apple Valley residents Thursday at the Victor Valley Museum.
APPLE VALLEY — Claremont resident James Belna believes his city
dodged a bullet when, in December, it lost a right-to-take trial that temporarily halted acquisition plans for a privately owned water system.
Claremont now owes nearly $14 million, Belna said, including $7.4 million to Golden State Water Company attorneys, according to a tentative ruling issued Wednesday by Los Angeles Superior Court Judge Richard Fruin.
But Belna — who opposes Claremont’s takeover attempt — sees that sum as a blessing.
We can afford to lose $14 million, Belna said of Claremont.
We could not afford to take over the water system … The judge got us off the hook on that because if we got all the way and bought the thing … there’s no end to the amount of disaster that’ll happen if you actually take over the water.
Avoiding the Claremont disaster, as Belna characterized it, was the topic of a presentation he gave to some 80 Apple Valley residents Thursday at the Victor Valley Museum. The event was hosted by the Apple Valley Citizens for Government Accountability, a group vocally opposed to the town’s takeover attempt of Liberty Utilities.
Belna, a deputy district attorney in Los Angeles County, discussed the psychological aspects of the Claremont case, calling the ruling against the city a
Claremont’s saga started with the simple refrain of,
Our water rates are too high, according to Belna. That evolved into talk of
a greedy corporation looking out for investors rather than customers.
Once the City Council got involved, Belna said the goal became that of
selling the dream through grassroots activism, an appraisal of GSW’s system, a feasibility study, community meetings and an election.
In Claremont, 71 percent of voters approved of acquisition, according to Belna, who said the City Council’s talk of transparency soon followed, which drew laughter in the audience.
People make decisions on emotions, he said.
They tend to be optimistic about things they want to have come true … and they’ll give up a lot in order to save face. $14 million is cheaper than having to say sorry.
A similar election awaits Apple Valley voters given Measure V’s overwhelming passage last November. Without a referendum, Town officials have used surveys to show residential support for local control of Liberty’s water system.
Belna, however, urged his audience to consider Claremont before accepting the town’s confidence in a successful takeover.
I love Claremont, he said.
It’s a beautiful city … but for gosh sakes use this as an example. We did a very stupid thing, and we should be the canary in the coal mine.
According to Belna, an aspect of the right-to-take trial Claremont’s attorneys — a team from Best Best & Krieger that also represents Apple Valley — failed to consider involved a California law that applies to water and electrical companies.
The law states that
the presumption of a more necessary use (made by municipalities via resolutions of necessity) … is a rebuttable presumption affecting the burden of proof, which Belna said allows utility companies to
fight that presumption in court.
Town Attorney Thomas Rice told the Daily Press on Friday that Belna’s assertion is
Mr. Belna is not an eminent-domain attorney, and he is not a water-utility attorney. He is a criminal attorney, Rice said.
The notion that Claremont’s attorneys somehow missed this law or ignored this law is absurd. He’s trying to mislead the public in Apple Valley into thinking we missed something, and I don’t think he’s qualified to speak on it.
Town Manager Frank Robinson previously said the eminent domain cases in Claremont and Apple Valley are dissimilar, adding that the town’s
stands on its own merits. Rice maintained that stance on Friday.
It’s another example of Liberty trying to sell the notion that the Claremont case is similar to Apple Valley’s when it’s not, Rice said.
I can’t say what the key differences are (due to litigation), but I can say there are a lot of differences, including that it’s a different city, a different court and a different judge. The comparison isn’t appropriate.
The town isn’t opposed to all comparisons, though. Officials here liken their case to the successful acquisition of Mountain Water Company in Missoula, Montana, with Robinson previously stating that the systems in Apple Valley and Missoula are
nearly identical in size.
That case was fought all the way to the Montana Supreme Court, which ruled 5-2 last August that municipal ownership was more necessary than private.
The ruling allowed Missoula to purchase Mountain Water’s system for $88.6 million — a price higher than the city’s offers of $50 and $65 million, but lower than the company’s suggested $120 million price tag, as reported by the Missoulian.
But for Belna, neither fair-market valuation nor actual purchase prices matter because, as he stated, Claremont couldn’t afford either. Had Claremont prevailed in the right-to-take trial, Belna said, the city would’ve been
the dog who caught the tire, a catch, he added, that could’ve spelled bankruptcy.
Ultimately, (the trial) came down to the fact that at any price point — $55 million up to $120 million — it was going to cost the ratepayers, Belna said.
Our rates were going to go up (for) the next 30 years. At any price you pay for (the water system). That’s what the facts proved.
To cover what could be a similar price tag, Apple Valley officials have said revenue bonds will be issued to fund a future purchase of Liberty’s system.
Last month, the Claremont City Council unanimously approved an appeal of the trial court’s ruling, a move that will add $450,000 in legal fees, the Claremont Courier reported.
Belna described the right-to-take phase as a
preliminary issue, suggesting that a long legal road still lies ahead.
They (Claremont) managed to run up $6 million (in the lead-up to trial), Belna said.
This is not even the meat of the eminent domain thing.
The town has spent more than $1.5 million on acquisition since 2011. Meanwhile, trial-setting conferences for a right-to-take trial have been vacated several times since April 2016. The next is scheduled for April 28.
Belna said Apple Valley residents and their Council should be
pounding on Best Best & Krieger
to explain what happened in Claremont, but added that doing so respectfully is key.
There are worse things than losing $14 million (and) that’s tearing your town apart over nasty, personal fights, he said.
Fortunately, we’ve avoided that. We at least have a good sense of community, you know, and it’s a very important thing.
Source: Matthew Cabe, Daily Press