[CLWA] – Castaic Lake Water Agency’s Board of Directors is scheduled Wednesday night (Dec. 12) to consider authorizing Agency staff to initiate the purchase of Valencia Water Company, a move that would bring 84 percent of Santa Clarita Valley retail water connections under CLWA’s umbrella.

“This is an outstanding opportunity to ensure local public ownership of a water company that has always been privately held,” said CLWA General Manager Dan Masnada. “The acquisition would result in future cost savings and enhance water supply reliability for the entire Santa Clarita Valley.”

On the agenda Wednesday night is a “resolution of necessity” that, if approved by an eight-member super-majority of the board, would authorize Agency staff to initiate eminent domain proceedings with the goal of reaching a negotiated settlement with Newhall Land, which owns Valencia Water Company.

Eminent domain is a legal process through which public agencies can acquire private property to be utilized for public benefit. In this case, both parties would enter the proceedings with the intent to reach an agreement for the sale of the private company to the public agency.

“Technically, we would be negotiating a stock acquisition in which CLWA would purchase the Valencia Water Company stock,” Masnada said. “At least initially, Valencia Water Company would continue to operate as a utility regulated by the California Public Utilities Commission.”

Valencia Water Company was established in 1954 to provide retail water service to developments built by Newhall Land, which has developed the master-planned communities of Valencia and plans to develop Newhall Ranch west of Interstate 5. Newhall Land is managed by FivePoint Communities.

The details of a negotiated settlement remain to be determined, but the acquisition would bring Valencia Water Company’s 29,022 service connections under CLWA oversight.

In 1999, CLWA acquired Santa Clarita Water Company and its 21,437 service connections for $63 million. The formerly private company became CLWA’s Santa Clarita Water Division, and represents CLWA’s first foray into operating a retailer. CLWA was established 50 years ago to bring State Water Project water to the Santa Clarita Valley.

If Valencia Water Company is acquired, CLWA would then own two of the SCV’s four water retailers and would be responsible for 59,306 out of 70,327 retail connections valleywide. The other two local retailers are the Newhall County Water District (approximately 9,600 connections) and Los Angeles County Waterworks District No. 36 (approximately 1,300 connections).

Masnada said the potential acquisition of Valencia Water Company is a significant and logical step for CLWA.

“During our public strategic planning workshops in recent years, the concept of ‘One Valley, One Water’ has gathered some steam. It’s viewed as a sensible way to achieve economies of scale that will benefit all ratepayers, and also to enhance the Agency’s ability to effectively manage the valley’s water resources,” Masnada said. “This acquisition, if completed, would bring us significantly closer to realizing that vision.”

The Board’s meeting is scheduled at 6:15 p.m. Wednesday, December 12, 2012 in the Boardroom at the Rio Vista Water Treatment Plant, 27234 Bouquet Canyon Road, Santa Clarita, CA 91350.

About the Castaic Lake Water Agency

The Castaic Lake Water Agency is the Santa Clarita Valley’s public water wholesaler. CLWA is one of 29 State Water Project contractors and receives water imported from northern California through the California Aqueduct.  CLWA operates two large treatment plants, three major pump stations, three water storage facilities, and over 45 miles of large diameter transmission pipelines delivering water to four local water retailers. Our mission is to provide reliable, quality water at a reasonable cost to the Santa Clarita Valley.

About FivePoint Communities