What Are We Doing?
Opposing the hostile take-over of Liberty Apple Valley
APPLE VALLEY — Town officials were undeterred Thursday in response to the City of Claremont’s settlement with Golden State Water Company, a move that ended an eminent domain takeover bid in that city and cost its taxpayers millions.
Word of the abandoned acquisition attempt, first reported by the Inland Valley Daily Bulletin, came during an Oct. 10 meeting of the Claremont City Council. Per the settlement, the city will pay $2 million to Golden State by Dec. 31 and $2.8 million in interest over the next 12 years.
In return, the company, which that also supplies water in Barstow and parts of Apple Valley, waived the remaining $5.8 million in legal fees so long as Claremont does not sue again during that 12-year period, the Daily Bulletin report shows.
Claremont remains on the hook for $6.1 million in its own legal fees, incurred during a years-long battle for ownership that included a failed right-to-take trial and — until Oct. 10 — an appeal of the decision against the city.
Claremont was represented by Best Best & Krieger LLP, the law firm that has also represented Apple Valley throughout its own contentious takeover attempt of Liberty Utilities, but spokesperson Gina Whiteside said “the situation in Claremont is a poor indicator of the town’s likely success.”
“These cases are very fact dependent,” Whiteside said. “The town’s case involves a different public agency taking over the system, a different proposed operator, and a different water company.”
Claremont’s Council looked to nearby La Verne for operational services, according to previous Daily Press reports. That move led attorneys for Golden State to attack La Verne’s water record in court and point out multiple violations that factored into last year’s ruling.
The town, by contrast, has proposed running the local water system itself, Whiteside said, a decision that has drawn its own criticism via claims of inexperience; however, the record of a nearby provider would likely not factor in at trial as a result.
“The case is also in a different court and involves a different judge than the Claremont case,” Whiteside added. “A more appropriate comparison can be found in Missoula, Montana, where earlier this year a court issued a final order of condemnation against a water company owned by the exact same company as here in Apple Valley.”
Liberty officials, meanwhile, viewed the Claremont settlement as a small victory amid an ongoing battle that pits private ownership against local control. Greg Sorensen, president of Liberty’s western region, said the outcome “speaks for itself” from a financial perspective.
“We believe that our Apple Valley customers will recognize that Claremont taxpayers now have to pay more than $11 million for a failed eminent domain lawsuit with nothing to show for it,” Sorensen said.
Whether Liberty’s customers recognize the risk might be a moot point, though; 7,200 voters approved Measure F in June, a win for the town that authorized the use of up to $150 million in revenue-bond debt to finance a potential future purchase of Liberty’s water system.
Still, Sorensen remained confident of, in his view, a positive outcome for his company.
“Instead of the same divisive conflict and outcome,” he said, “Liberty Utilities prefers to continue providing safe and reliable water service to Apple Valley residents in collaboration with the town, as will now be the case between Claremont and Golden State.”
As of Aug. 31, 2016, Apple Valley has spent nearly $1.6 million on acquisition and water-related costs, according to a transparency report available on the town’s website.
In response to a request for an updated amount, Whiteside said the town has spent $942,085.82 “in legal fees and costs, which includes the costs associated with experts and consultants.”
The new figure is for “eminent domain action only,” according to Whiteside, who said the transparency reports are no longer relevant as they include costs not associated with the eminent domain process.
“The transparency reports were an attempt to show all the water-related costs,” she said, “but moving forward our focus are the costs associated with eminent domain, including the right-to-take trial and valuation, which are the true costs of acquiring the water system.”
Liberty officials have declined all previous requests for financials related to its fight against the town’s acquisition attempt. The company, however, did spend more than $1 million campaigning for Measure V in 2016 and against Measure F earlier this year.
In Claremont, combining what the city now owes, excluding interest — with what Golden State waived — totals $7.8 million in legal fees.
A trial-setting hearing for the town’s right-to-take trial is scheduled for Oct. 20, according to San Bernardino Superior Court records.
But a suit Liberty filed alleging California Environmental Quality Act violations related to the town’s final Environmental Impact Report for acquisition will likely need to conclude before the right-to-take trial begins.
Source: Matthew Cabe, Daily Press