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Council Approves Settlement With Golden State Water

Post Date:10/11/2017 11:15 AM

On Tuesday, October 10, 2017, the Claremont City Council approved a tentative agreement with Golden State Water Company to settle legal fees owed to the company as a result of the court decision in the water system acquisition trial. Golden State Water has agreed to reduce the amount of legal fees the City owes in exchange for the City withdrawing its appeal of the court decision. The City will also withdraw its appeal of the amount the Court granted Golden State Water in legal fee reimbursement. The agreement signed by Council will be finalized with Golden State Water Company on October 11, 2017.

In December 2016, Superior Court Judge Richard Fruin ruled against the City in its eminent domain case against Golden State Water Company. As a result of the decision, the City is responsible for reimbursing Golden State Water its legal fees of over $7.6 million. The City filed an appeal contesting the amount granted by the court. Interest began accruing on this amount on March 8, 2017.

On January 31, 2017, the City Council held a public meeting to gather public input on moving forward with an appeal and hired an appellate law firm to analyze the City’s case. The City hired attorney David Axelrad of Horvitz and Levy, one of California’s top appellate specialists. After reviewing the judge’s decision, Mr. Axelrad advised the City Council that the best possible outcome of an appeal was a partial retrial of the case.

With this agreement, the City will pay Golden State Water an initial payment of $2 million by December 31, 2017 followed by interest payments only over the next twelve years. The interest payment is $234,040 per year, for a total of $2,808,480. The total amount the City will pay over the 12 year term of the settlement is $4,808,480. Golden State Water will forgive the remaining principal balance of $5,851,000 if the City does not file Resolutions of Necessity during the next 12 years. Should the City file a Resolution of Necessity during the next 12 years, the principal becomes payable immediately and the interest paid will be lost.

The following statement is issued jointly by the City of Claremont and Golden State Water Company:

“The City of Claremont and Golden State Water Company have agreed to end the legal conflict that has been a source of division for the last five years. Despite our past differences, we share a commitment to serving the people of Claremont and will work together in the future to ensure the Claremont community remains a great place to live, work, and raise a family.

Golden State Water Company leaders and staff are dedicated to providing quality customer service and expert operation of the Claremont water system. Golden State Water Company will continue to provide the quality and reliability of water the community expects in the most professional manner. Likewise, City leaders will steadfastly work to represent residents with a focus on ensuring the water service is the highest quality and the community is kept informed and involved.

With this shared vision, the City and Golden State Water Company came together to forge the 12-year agreement. This resolution is a new beginning for the community, and we look forward to building and maintaining a strong relationship, recognizing that collaboration is better than conflict for the people of Claremont.”

Settlement Agreement GSW and City of Claremont