Possible Sale of Bellflower Municipal Water System
By Tammy McDuff
The Bellflower Municipal Water System [MWS] is an outdated water system in need of more than $25 million dollars in repairs. Historically the Water Commission has heard the complaints of customers who have not been happy with the service or water pressure. The MWS serves only 1,800 customers within the city.
The City of Bellflower has decided to sell the water system they own, serving about 10% of its residents. After conducting a full Request for Proposals (RFP) process and considering four formal bids, City Council selected California American Water to own and operate the water system. The remainder of the City is served by water providers other than the City of Bellflower and this sale would get the city out of the water utility business. According to the City’s impartial analysis the decision to choose California American Water [CAW] and sell the system, was based on CAW’s ability to keep rates the same, while maintaining customer service and water quality at equal or higher levels, and invest in the water system to insure it is adequate for the future. The purchase price would be $17 million and would be paid to the City at the close of the sale. The sale is subject to approval of Bellflower voters in November 2016.
Len Gorecki, Director of Public Works for the City stated, “Last year, when the Water Commission made a recommendation to Council to explore the sale of the Municipal Water System, it was based on recommendations that the sale would stop the drain on general fund dollars, totaling 2.7 million, would supply clean and reliable water and guaranteed rates.”
If approved by the voters on November 8th, the purchase would allow the City to pay off guaranteed MWS debt bonds and obligations, purchased and paid by all city taxpayers, of approximately 12 million dollars. After reconciliation of this debt, funds generated by the sale of the system would help pay for economic development projects and recreation facilities.
Pending the results of the election, CAW will seek approval of the California Public Utilities Commission [CPUC] to keep water rates at the current level until January 2021, with the exception of a small surcharge. That surcharge would add 1.17% to your bill, which comes out to around 37 cents on an average monthly bill. This means rates would remain exactly the same from the time the sale is final until January 1, 2021.
Vice President of California American Water, Kevin Tilden, notes “If the vote is successful, then we will sit down with the city and negotiate a contract, purchase agreement and then file for approval with the California Utilities Commission. It will take almost a year to obtain approval, file necessary papers and close the deal.”
There will be a meet and greet held by CAW on October 25, 2016 at Simms Park Auditorium, beginning at 6:30pm. This will be more of an open house, where customers can discuss rates, conservation, community involvement or whatever questions they may have.
For more information on Measure W, visit the City’s website Resolution No. 16-53 – Intent for the Expenditure of MWS Sale Proceeds.
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