Golden State Water Co. might have agreed to sell its Ojai water system this month to a municipal water district for $34.5 million, but that doesn’t mean it’s any more willing to sell its Claremont system.

Both Golden State and the city of Claremont are digging in for another round in their bruising eminent-domain battle for ownership of the system, with both sides saying the decision to sell in Ojai will have no bearing on the outcome in Claremont.

Although a small number of Golden State’s total customers are at stake in Ojai and Claremont, the company has taken the eminent-domain threat seriously, in part because of the possibility that the takeover risk could spread to other communities it serves.

Ojai’s water system serves fewer than 2,900 customers, roughly 1 percent of Golden State’s portfolio; Claremont’s system is slightly larger with 11,000 customers. A subsidiary of American States Water Co. with which it shares a San Dimas headquarters, Golden State served roughly 285,000 customers in 14 communities across California last year, generating $303 million in revenue, according to Golden State’s annual financial report. That was about two-thirds of its parent company’s total. American States reported net income of $59.7 million in 2016.

Golden State won its first round in the Claremont eminent-domain dispute in March when Superior Court Judge Richard Fruin denied the city the right to invoke the maneuver and awarded the company $7.6 million in legal fees. He said Claremont failed to make its case that it could provide water at lower rates while maintaining water quality and repairing an aging system of pipes. Claremont is appealing that decision.

“The city is aware of the sale agreement between the Casitas Municipal Water District and Golden State Water Co.,” Bevin Handel, public information officer for Claremont, said in an email. “However, given where Claremont is in the eminent-domain process, it does not change the status of our case.”

Golden State’s attorney said that just because the utility agreed to sell its Ojai system does not mean the company is any closer to selling its Claremont system, no matter the price offered.

“It’s not about the price in Claremont,” said George Soneff, partner with the West L.A. firm of Manatt Phelps & Phillips. “The system is still not for sale.”

Ojai reversal

But that’s precisely what Golden State executives said repeatedly about Ojai residents’ efforts to get the utility to sell its system in that city, even after 87 percent of Ojai voters in 2013 approved the concept of selling the system to the Casitas district. A group of city residents initially launched a takeover effort after what they claimed were years of constantly rising water rates, which Golden State argued were necessary to maintain the aging system. Private water utilities’ rates are subject to approval by the California Public Utilities Commission.

Golden State executives again said their system was not for sale after the Casitas district made an offer of $23.7 million early last year.

But attorney Soneff said last week that a related legal dispute changed the thinking at Golden State. That dispute arose out of the Casitas district’s plan to finance a takeover with Mello-Roos bonds, in which a special district would be formed that would levy a tax on property owners within that district to pay off the bonds.

Golden State challenged this financing mechanism in court, but lost. Immediately after, both the Casitas district and a local activist group, Ojai Flow, sued the company for both monetary and punitive damages totaling $6.5 million related to what they claimed were inflated water rates.

While a judge dismissed Ojai Flow’s claim, the Casitas district’s damages claim was allowed to proceed to trial.

“They were claiming $6.5 million and the clock was ticking: Damages were increasing every day based on their calculation of the difference in water rates” between what Golden State was charging residents and the lower prices the district said it would charge if it took over the system, Soneff said.

So, when the Casitas district upped its offer earlier this year to buy the system from Golden State for $34.5 million and also offered to drop its suit, the utility accepted; an agreement was signed on April 7 and approved by the Casitas board on April 12.

“Considering all this and the complexity of the litigation and the price offered, the best course of action was to resolve claims and transfer the system,” Soneff said. “It was so much more than an eminent-domain case.”

In the Claremont case, however, Golden State doesn’t intend to back down after its court victory.

“If Claremont were to spend another $1 million on appeal and send this back to court, Golden State Water is confident it will win again on the merits,” he said.

But Larry Kosmont, president of Kosmont Cos., an L.A. economic development consulting firm, and a longtime observer of water conveyance politics, said he isn’t so sure a sale is off the table.

“This case could ultimately be a question of price, which is what many condemnation suits are about,” he said.