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SCVNews.com | Opinion/Commentary: Water Merger Bill: No Say, No Way | 05-06-2017
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Commentary by Lynne Plambeck
| Saturday, May 6, 2017

Senate Bill 634 and its new amendments make a hodgepodge of changes that will have potentially detrimental and unforeseen consequences for California Water Law and LAFCO (local government agency formation) law.

These changes are made to legitimize the questionable acquisition of Valencia Water Co., a private company formerly owned by the Newhall Land-Lennar Corp. and developers of the 21,000-unit Newhall Ranch project. It will also allow the takeover of the Newhall County Water District, a 60-year-old voting district, without a vote of the people in that district despite their demand to have a vote.

And the bill specifically eliminates any of the voting processes that we all expect from our democracy and local government. There will be no election on the question of whether Newhall County Water should be dissolved.

The bill is being rushed through the Legislature so it avoids anyone having to stand for a 2018 election and then expands their terms for six years so no one can vote them out.

The bill makes sure no public input of any kind, referendum, environmental (CEQA) review or even forming a new district could be used by the public to stop the takeover of Newhall County Water.

Why is Sen. Scott Wilk so adamant about making sure the public can’t have a say? Newhall County Water District customers are paying hundreds of thousands of dollars for lobbying efforts to get rid of their own water district and to make sure they have no say in the matter.

This is not democracy. Why are Newhall County Water’s own elected board members trying to eliminate these rights?

The amendments still do not include Valencia Water Co. and L.A. County Waterworks District 36, instead delaying their inclusion to some later date. There is no guarantee that either will agree to be included in the future.

When asked how this would be enforced, a legislative staff person stated: “The public would have to sue.” Isn’t this exactly what this bill was supposed to be seeking to avoid? The Castaic Lake Water Agency is a bad actor and has not complied with prior state laws; why would it comply with this one?

Some background: Valencia Water Co. was acquired through a “friendly” eminent domain proceeding in 2012 from Newhall Land-Lennar Corp. (now Five Point), developer of the 21,000-unit Newhall Ranch project, as a private investment, held by Castaic Lake Water Agency, the sole shareholder.

This governance structure of a private water company, held by a public agency, is not sanctioned currently anywhere in California law but would be codified as legitimately existing if SB 634 is approved.

It has resulted in Valencia Water Co. customers paying an $800,000 annual dividend to CLWA, as the sole shareholder. Valencia Water Co. does not hold public meetings and claims it is beyond any public agency law because it is private – as it and CLWA successfully argued to the 2nd District Court of Appeals. At the same time, Valencia Water Co. argued to the Public Utilities Commission that it is public, since it is owned by CLWA, a public agency, claiming therefore it was no longer subject to CPUC oversight.

Does the Legislature really intend to codify this structure into law and allow other water agencies to use this law as a basis for proceeding in a similar manner?

With this bizarre water governance – not public or private – Valencia Water Co. refuses to follow public process, does not respond to Public Records Act requests and holds no public meetings. It can therefore hide water data and other reports completed at its customers’ expense, to the detriment of public accountability and the sustainability of water supplies and the health of the Santa Clara River watershed.

Now this legislation will also allow Valencia Water Co. to avoid the LAFCO annexation process, in spite of the many areas proposed for development outside its current boundaries that should require LAFCO annexation review.

Why is Valencia Water Co. being excluded from the LAFCO process? Does the Governance Committee really want to pick and choose which water companies must be subject to LAFCO and what parts of LAFCO law they must follow?

This water governance structure should not be sanctioned by the Legislature. Water companies must have some legally required public oversight, either from the CPUC or legislated public processes, including the Brown Act (California open meeting law), the Public Records Act and the Political Reform Act. And they must be subject to the Knox-Cortese Hertzberg Act.

Amendment 49 will eliminate even the small protection that the public sought regarding Valencia Water Co.’s evasion of the Brown Act. Does the Legislature really want to ensure that all information can be kept secret while this company moves through this state-legislated process and begins work on the Sustainable Ground Water Act?

Instead of creating a new, consolidated district that will manage water in the area, this proposal leaves huge and questionable gaps that will supposedly be addressed in the future.

The deferral of Valencia Water Co. and District 36 into the future leaves a hole in the middle of the district and the fate of over 30,000 connections to future actions by a board that has a bad record of not following its own laws. This is not acceptable.

Again, when asked how the state would ensure that Valencia Water Co. actually complies with the law in the future, a legislative staffer told me that people would have to sue. I thought that was the action we were trying to avoid?

The bill requires L.A. County’s LAFCO to oversee the consolidation of the district but picks and chooses which parts of LAFCO law will be followed. It specifically states that LAFCO may not require a vote. I believe this statement is unfair to the community that has strongly objected to the loss of its 60-year-old voting district. Why would the Legislature mandate the elimination of a vote?

Not only does the bill eliminate any possibility of the long-requested vote for residents of the Newhall County Water District, but it also eliminates any possibility of Valencia Water Co. being reconstituted as a voting district under County Water District law as has been pursued by some members of the public. (See section 29 of the bill.) Why is the Legislature seeking to eliminate any kind of local voter control over existing ground water agencies and prohibiting them access to laws that would allow the public to reconstitute water governance to their liking?

This water legislation is complicated. It should not be done in Sacramento where the public is virtually precluded from presenting their case and everything is done by paid lobbyists whom we locals are funding out of our water rates.

Don’t like the sound of this? Contact your state senators, Scott Wilk and Henry Stern, and let them know what you think.


Lynne Plambeck is president of Santa Clarita Organization for Planning and the Environment. Her opinions are her own.



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  1. Ilene Anderson says:

    Lynne- the detailed info and your advocacy are appreciated.

  2. huggeroftrees says:

    Good information to have and well written. Hope the rate payers of Newhall County Water take heed. Water water and not a drop to spear !

  3. claudia says:

    Thank you for all your informative commentary !

  4. jim says:

    It is apparent by the lack of interest in this issue that the service-fee paying, tax-paying, voting-age citizens of most of the SCV have no idea – or don’t care – what goes on in this valley.

    They seem to be taking their cue from the one government agency that seems to be completely blind to this particular issue – the Santa Clarita City Council.

    Now, I know that only 4 or 5 people may ever read this article and even less read the responses, but I have to wonder – is this how things are going to forever be?

    Why is it that 99% of the people affected by the political gamesmanship that is occurring not only don’t know, but don’t care? I get that the local and state political machinations are being done skillfully and with full support ($$$) of those companies and people who stand to make a tidy profit, whether in cash payments or improved political stature. That is no surprise, as that is the way things work.

    Just, for a moment think about the metropolis to the south – LA can’t even get 20% turnout at the polls when they are talking about millions of dollars that will be paid out from the pockets of it’s citizens.

    Hey – this here is small town stuff (although run by big-time money) and even a relatively small group of people who care about the SCV could make a difference.

    But, apparently they don’t care, or don’t exist.

    So suck it up SCVers; you are gonna get what you deserve if you don’t pay attention and then take action.

  5. claudia says:

    @Jim, I agree with you and many times I just complain about and do my share. I was talking about this with my 11 year old on our way to school. This is very important to all of us and to ensure the future and well being of our kids. This time I have called and left a message for Wilk and I am planning to encourage anyone that is willing to listen to call Wilk and leave a message as well. Do the same and maybe we can can get at least 10 other people to call.

  6. Lee says:

    Great analysis. I am somewhat dismayed by the deafening silence from city hall and the Signal, but not greatly surprised either. It seems that the city leaders have transmogrified from citizen activists who once upon a time spoke Truth to Power, to merely being the expediters of other’s agendas.

  7. Maria Gutzeit says:

    Too bad there is so much incorrect information here. Terms extended by 6 years? No. Everyone, including Ms. Plambeck, would get there term extended by two years during the transition, to avoid losing vendors and staff as happened with NCWD a while back. It also doesn’t mention that if there were a vote, it would be the entire CLWA service area, since CLWA and Santa Clarita Water are also going away. Cost estimates are 500,000 – 1 million dollars for a special election, and bear in mind 14 of the 15 publicly elected (one is appointed by county) directors think this is a good idea. If you know any of them, consider talking to them. Amendments already in the bill outline the LAFCO, District 36, and Valencia Water issues. This legislation saves our valley millions and eliminates so much government waste, while enabling us to be more competitive for grant funding for regional watershed projects, and adds in a lot of consumer protections that are not there now. If you want to learn more about the extensive local outreach, including tapes of the four public forums, you can find that at yourscvwater.com. You can also contact the water districts if you have a question. Perhaps I will write a bit more later. It’s unfortunate there is so much misinformation floating around.

  8. waterwatcher says:

    Oh Maria – you are drinking your own cool aid! Didn’t you see that CLWA agenda item increasing salaries and creating new position that will cost $800,000 starting next year? This merger proposal claims to save what amounts to about 1% of the combined expenses of CLWA and NCWD, and probably will not end of saving your agency anything. AND that’s an estimate by a firm that CLWA hired, not an independent. Its better to go by history. CLWA raised rates on the last two agencies it acquired.

    But the biggest question is why are you as President spending all your rate payers money on this scheme?

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