The city is taking the first step toward buying the local water system from California Water Service following complaints by council members about too-high water bills and too-little water cutbacks in the drought.
California Water Service issued a statement that the city is seeking a “hostile takeover” and the system is not for sale.
In a closed session last month, the Visalia City Council directed staff to hire a consultant to put a value on the local water system.
“We’re kicking the tires,” said Mayor Steve Nelsen.
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But, he said, the city hasn’t made a decision about whether to acquire Cal Water’s Visalia operation.
In its statement, California Water Service said Thursday that it views getting an appraisal of its Visalia system as a prelude to something more problematic.
“Although the City may or may not make an offer to purchase the drinking water system after the appraisal is complete, this is typically the first step in a hostile takeover,” the company said.
California Water Service, an investor-owned utility that owns several water systems in the state, serves about 132,000 people in the Visalia area through 42,000 connections.
Visalia is the only city in Tulare County that does not own its water delivery system, the city said Thursday.
City Attorney Alex Peltzer said all that’s being discussed is the value of the system, not a hostile takeover.
“That kind of talk is premature,” Peltzer said.
Cal Water made it clear that it has no interest in selling to the city.
“Our system is not for sale, whether the city opts to spend taxpayer dollars on an appraisal or not,” the company said. “We will oppose any attempt to take the drinking water system.”
Our system is not for sale, whether the city opts to spend taxpayer dollars on an appraisal or not.
California Water Service
If the city does try to buy the local water system, it could seek a negotiated sale or use its power of eminent domain.
The council acted without seeking public input, a company spokeswoman said.
“As far as we know, there was no public discussion or debate,” spokeswoman Shannon Dean said. “We want to be pretty strong that this is not in the best interests of the people of Visalia.”
City Manager Mike Olmos said the council’s directive to city staff occurred in a closed session because the topic involves real estate.
Olmos said council members have been hearing complaints by residents about Cal Water’s latest rate increase request before the California Public Utilities Commission.
“There’s a lot of concern,” he said. “Folks feel they don’t have a voice.”
The city is also unhappy over the failure to reach its state-mandated water use targets, he said. It must achieve a 32 percent reduction but has only gotten to 26 percent.
“There’s a concern that Cal Water, as a seller of water, they haven’t taken the conservation part seriously enough,” Olmos said.
132,000Number of Cal Water customers in the Visalia area
But Cal Water, which has been in Visalia since 1927, said it is working with all of its cities to meet drought targets.
“In other communities throughout the state, Cal Water is working closely and cooperatively with the cities we serve to ensure a reliable water supply now and into the future,” Dean said. “That’s what should be happening here.”