HomeMy WebLinkAbout1999-02-23 - AGENDA REPORTS - SC WATER CO POTENTIAL PURCH (2)CITY OF SANTA CLARITA
AGENDA REPORT
UNFINISHED BUSINESS
DATE: February 23, 1999
City Manager Approval:
Item to. be presented bjr Ken Pulskamn
SUBJECT: RETENTION OF CONSULTANTS FOR THE POTENTIAL PURCHASE
OF THE SANTA CLARITA WATER COMPANY
DEPARTMENT: City Manager's Office
BACKGROUND
The Santa Clarita Water Company is the largest water retailer in the Santa Clarita Valley. In
1993, the owners of the Santa Clarita Water Company expressed an interest in selling the
company to the City of Santa Clarita. Several meetings were held, and the negotiations were
terminated after the Northridge Earthquake. During the Summer of 1997, the Water Company
again expressed an interest to discuss the sale of the Company to the City and several meetings
were held to discuss the subject.
As background for City consideration of such a purchase, staff has developed a list of benefits
to the community which such a purchase would provide. The following summarizes the
findings:
Benefits to the Citizens of Santa Clarita
1. Coordination of Service Provision - The City is the largest provider of services to local
residents, and such a purchase would allow the coordination of efforts such as street
improvements, capital improvement projects, and new roads with the installation, removal
or relocation of water lines.
2. Perchlorates - The presence of perchlorates in the Company's water supply presents a
potential threat to the users of the water provided by the company. It would benefit the
community to have the City address this issue, not only for public health purposes, but also
because groundwater from these wells is less expensive than water from the State Water
Project.
3. Development - As water is such a key issue in the Southern California Region, ownership
of a local water company, including water pumping rights in the Santa Clara River, would
give the City a stronger voice in the local water forum, with the goal of ensuring an
adequate water supply for the future of the community.
4. River Preservation - The City would have greater control over the future of the Santa
Clara River, ensuring that it is preserved in the best possible state for water quality,
beautification and recreational purposes.
5. Standard Practice - The purchase would be consistent with standard practices throughout
the County and State, whereby many municipalities also provide water to their residents.
Continued To: 3
6. Water Expertise - The City has in-house water expertise, as the City Manager, Assistant
City Manager, and other management staff have managed water operations in previous
cities for which they worked. In addition, the Santa Clarita Water Company has thirty-
seven employees who are experts in the delivery of water.
7. Community Owned — The community would control the water company, because it would
be publicly owned, and since the Mayor and City Council are directly elected, residents
would have a direct say in its oversight and operation.
Based on these and other reasons, the City entered into negotiations to purchase the Santa
Clarita Water Company. In 1998, the City retained Bookman Edmonston Engineering to
conductan appraisal of the Company and to study preliminary funding methods of the
purchase.
Staff recommends entering into a contract with Bookman Edmonston Engineering to further
assist the City with the purchase the Santa Clarita Water Company. In addition, staff
recommends entering.into a contract with Rogers & Associates, a strategic communications
firm, to help City staff ascertain community attitudes and to provide public information
regarding the provision of water services by the City.
RECOMMENDED ACTION
City Council approve and authorize the City Manager to execute agreements with the following
companies for services related to the potential purchase of the Santa Clarita Water Company
by the City of Santa Clarita, subject to City Attorney approval:
1. Bookman Edmonston Engineering, in an amount not to exceed $30,000, by transferring
$30,000 from account #1240-7401, the City Council Contingency Fund, to account #1210-
8110.
2. Rogers & Associates, in an amount not to exceed the City Manager's standard authority of
$50,000, by transferring $50,000 from account #1240-7401, the City Council Contingency
Fund, to account #1210-8110.
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