Water Districts: Water Merger – Castaic Lake Water Agency

Castaic Lake Water Agency Plans On Taking Over Yet Another Agency

In 1962 Castaic Lake Water Agency (CLWA) was developed as one of the state water contractors. CLWA created a law protecting water only to be sold at a wholesale price (CLWA Law Sec.15) and not retail. By 2000 CLWA illegally acquired Santa Clarita Water Company, a water retailer. The public took this issue to the appellate court and won. However, CLWA later went to the legislature where a deal was made known as AB134.

Legislature gave the agency the right to own only Santa Clarita Water Company, but once again CLWA acquired another agency. In December 2012 CLWA obtained Valencia Water Company and without proper notice to the public. The deal was made within 24 hours of letting the public know. It cost the taxpayers $73 million dollars. Now CLWA plans to acquire Newhall County Water District (NCWD). The last two water agencies taken over by CLWA (Santa Clarita Water Co, 2000 and Valencia, 2012) have experienced significant rate increases after the buyout.

The current proposal for NCWD does not protect the Newhall water customers from the rate increases or having public ground water shipped to Newhall Land’s developments. The law states that ground water in existing service areas, may not be transferred for use outside their area. CLWA continues to run Valencia as a private company and without proper public oversight. Valencia Water has caused ratepayers to pay $800,000 a year in dividends.

Proposal SB 634 plans to consolidate the CLWA and NCWD into “Santa Clarita Valley Water District.” To approve consolidation the bill requires legislative consolidation of the two agencies. Without a legislative action, the proposed consolidation would need a proposal filed to LA LAFCO by one of the districts and consideration by the Commission. Local Agency Formation Commission for the County of Los Angeles (LA LAFCO) unanimously opposed the notion of the bill SB 634 on March 8th unless it is amended.

Along with being privately owned, CLWA appears to be in significant debt. Valencia water agency(owned by CLWA) also appears to be in considerable debt. NCWD is in excellent financial standing and will pay off its debt within six years. The ratepayers in Newhall should know whether CLWA has exceeded its state-set in debt omit before the proposal.

Sierra Club California suggests “The bill be amended to require an independent forensic audit of CLWA to disclose the state of their finances before consolidation be considered,” and “that a private water company owned by a public entity must have either PUC oversight or subject to all public governance laws, such as the Brown Act, Political Reform Act, and the Public Records Act.”

1CLWA Law Sec. 15. The agency may acquire water and water rights, including, but not limited to, water from the State of California under the State Water Resources Development System, and provide, sell, and deliver that water at wholesale only, for municipal, industrial, domestic, and other purposes, through a transmission system to be acquired or constructed by the agency.
2 Sec 15.1 of CLWA Law added 2002

 

Author – Lauren Van Sloten, Santa Clarita, CA (SCV Press)

April 26th, 2017 by