Los Angeles Business Journal

Ojai Voters Kick Out American States Water Subsidiary

By Howard Fine Wednesday, August 28, 2013

Voters in Ojai on Tuesday approved a bond measure to allow a neighboring municipal water district to take over water service from a subsidiary of American States Water Co. of San Dimas.

The bond measure authorizes the Casitas Municipal Water District to issue up to $60 million in bonds to finance the acquisition of Ojai’s water system from Golden State Water Co., the regulated utility subsidiary of American States Water.

According to preliminary results from the Ventura County elections office, 87 percent of voters supported the bond measure, well above the two-thirds threshold needed to pass the measure. Final results are expected Thursday.

The election capped a two-year campaign by a group of Ojai residents to wrest control of the water system from Golden State Water. The residents were upset over a series of water rate hikes, which they say have averaged 8 percent a year for the past 20 years.

Golden State Water executives have said the rate hikes were needed to perform maintenance upgrades on the aging water system and said that any other operator would face the same maintenance issues. They said the Ojai system was not for sale and filed suit to block the election and challenge the measure.

In June, a lower court rejected Golden State’s attempt to stop the election. However, Superior Court Judge Mark Borrell set a hearing for early next month to hear arguments over whether the use of Mello-Roos bonds to finance the acquisition of a private water franchise was legal.

Shares of American States Water rose 25 cents to $54.99 Wednesday on the NYSE.