Ojai residents will be allowed to wrest control of a private water company through eminent domain to get out from under what voters found where exorbitant prices, a state appeals court has ruled.
The publicly owned Casitas Municipal Water District in VenturaCounty may impose a forced sale of the Golden State Water Co. to take over its service of the city of Ojai, the Second District Court of Appeals ruled Tuesday.
The court upheld the use of Mello-Roos Act funds, generally reserved for redevelopment style projects, to raise $60 million in bond funds to pay for the acquisition.
GoldenState argued eminent domain to replace one water service provider with another was an illegal use of Mello-Roos funds.
GoldenState “advocates for a rule that would shift he bargaining power decisively in its favor, allowing it to hold out for a sale price far above the market rate while it continues to extract monopoly rents from the people of Ojai,” Justice Steven Perren wrote.
Perren pointed out that GoldenState charges its customers rates that are more than double those charged by Casitas, and the disparity is growing. Over the last 20 years, GoldenState’s average annual rate increase was nearly double that of Casitas.
Ojai residents organized a campaign to “declare independence from the economic tyranny of GoldenState,” according to the group.
In an election 87 percent of voters approved a measure to authorize Casitas to buy GoldenState with up to $60 million in bonds.
Case: Golden State Water Co v. Casitas Municipal Water Dist, No. B255408