On March 26, 2013, Golden State Water Company (GSWC) filed a lawsuit against Casitas Municipal Water District (CMWD) and its newly formed Mello-Roos Community Facilities District No. 2013-1 to stop an unwarranted eminent domain taking of GSWC’s Ojai water system. GSWC, which has owned the system for more than a century, strongly opposes the takeover and has repeatedly indicated that the system is not for sale.

To fund the eminent domain takeover, CMWD’s board approved a ballot measure designed to raise $60 million in bonds to be voted on in a special election on August 27. The bonds would then be repaid by new, secured property taxes levied against every parcel of land in the City of Ojai.

According to GSWC’s Senior Vice President for Regulated Utilities Denise L. Kruger, “After careful review, we believe the Casitas Municipal Water District’s adopted Mello-Roos parcel tax plan is illegal. The Mello-Roos Act is clear and does not authorize financing for an eminent domain takeover of existing facilities that are already devoted to public use.”

“GSWC has asked a judge to review the law and rule promptly to protect Ojai residents from facing expensive and annual increases in Mello-Roos taxes levied through a recurring property lien,” added Kruger.

In a news release, CMWD’s General Counsel John Mathews stated, “Casitas intends to vigorously defend its right to use the well-established (Mello-Roos) law to acquire Golden State’s Ojai water utility if that is what the citizens of Ojai wish us to do.”

The citizens’ group, Ojai FLOW, or Friends of Locally Owned Water, favors the takeover, while the Sacramento-based California Alliance to Protect Private Property Rights (the Alliance) opposes it. The Alliance has launched a public education campaign “Stop the Ojai Water Grab.” As noted in a press release, “The Alliance’s campaign is intended to convince the Casitas Municipal Water District that the water grab is motivated by a political agenda and not one of lower water prices. This agenda could also pose risks to their customers in the Ojai Valley and Ventura.”

Ojai City Manager Robert Clark indicated the city is reviewing the lawsuit to decide its options.

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