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Felton residents tap into water war

Felton residents tap into water war


Customers favor buyout by water district

October 19, 2002
Sentinel staff writer

FELTON - Felton residents are in an uproar about a German
multinational corporation acquiring their water system.
More than 160 people showed up at a town hall meeting called by
Supervisor Jeff Almquist on Thursday night to find out what they
could do to prevent the takeover. Most of them indicated they would
rather have the San Lorenzo Valley Water District buy the system,
using the power of eminent domain if necessary.
The water system, which serves 1,350 customers, was sold by
Citizens Utilities to American Water Works Co. last year. Now
American Water Works Co., which has operations in 22 states, is
being swallowed up by RWE Aktiengesellschaft, the third- largest
for-profit water provider in the world.
“To me, this is a homeland security issue,” said Almquist, who lives in
Felton and is a customer of American Water Works.
The proposed acquisition is under review by the California Public
Utilities Commission, which also will decide on the rate hike for Felton
The process for the water district to acquire the Felton water system
using eminent domain is lengthy and complicated.
The water district and the water company would submit an appraisal
to the court, which would set a value.
The water district also would have to get permission from the Local
Agency Formation Commission, a regional agency that makes decisions
on boundary issues. Almquist said the review process could take
seven months.
SLV water director Lawrence Prather, who is seeking re-election on
Nov. 5, told the crowd he would rather buy the water system with a
friendly offer than by condemnation. He was optimistic about the
impact on Felton residents, who pay more for water than people living
in neighboring towns served by the SLV water district.
One customer reported a recent two-month bill of $326.
“I believe we can pull this off without raising your rates,” Prather
But the five-member water board, which met later Thursday, didn’t
take any vote. The board next meets on Nov. 7.
“There is still a lot of unknowns,” said director Jim Rapoza, who is also
seeking re-election. “We need to let the people in Felton know how
much will this cost.”
Almquist’s office is collecting letters protesting the proposed
acquisition and rate hike. A decision on the rate hike is due in
February or March.
Almquist is looking for residents with financial expertise to review the
rate-hike request. He hopes the PUC will schedule a hearing in Felton
if enough residents request it.
When American Water Works bought out Citizens, company officials
said rate hikes would be on hold until 2005. But American Water Works
spokesman Kevin Tilden said that condition was not included in the
PUC decision.
He contended it was accurate to describe the rate hike as a 57
percent increase. The increase would be 4 percent for homes and 82
percent for fire service customers.
Almquist said local people would still end up paying higher rates.
Accountant Tom Lindsay agreed.
“We’re going to eat it, so we’ve got to nip it in the bud,” he said.
Felton isn’t the only community in the state fighting for its water.
The Montara Sanitary District, which has 5,500 customers near Half
Moon Bay, tried to buy the local Citizens water company from
American Water Works last year.
“They turned us down,” said George Irving, manager of the sanitary
district. “They weren’t interested in negotiating.”
The water district hired an appraiser, but the water company still
wasn’t interested.
“We had to get a court order,” Irving said. “They wouldn’t let us on
the property.”
A court ruling on the value of the water system is expected in March.
American Water Works Co. paid a premium to buy the system, and
Irving worries that will mean customers will pay higher rates.
The company insisted that won’t be the case, but Irving is skeptical.
“That flies in the face of logic,” he said.
Contact Jondi Gumz at jgumz (at)


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