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Smart Voter
Los Angeles County, CA November 4, 2014 Election
Measure W
Water Revenue Bonds
City of Claremont

Majority Approval Required

Pass: 7,596 / 71.98% Yes votes ...... 2,957 / 28.02% No votes

See Also: Index of all Measures

Results as of Nov 25 1:07pm, 100% of Precincts Reporting (23/23)
Information shown below: Impartial Analysis |

Shall the City of Claremont be authorized to issue water revenue bonds up to $135 million to pay for acquisition of the Claremont Water System and incidental expenses payable only from the water system's revenues?

Impartial Analysis from Shelley Desautels,
City Clerk
The City Council of the City of Claremont is considering the acquisition of a water enterprise system and intends to use the revenue generated by the system to issue bonds to pay the acquisition price. The system has been appraised at just over $55 million. The City's analysis shows that the system may generate enough revenue to issue bonds up to $80 million. However if the system cost were to exceed $80 million, the City would need to issue additional bonds.

Measure W would authorize the City Council of the City of Claremont to issue revenue bonds in a maximum amount of $135 million. If approved, the City would only issue bonds in an amount necessary to fund the acquisition.

The City of Claremont is authorized under State law to issue various types of bonded indebtedness. Some bonds require voter approval before issuance and others do not require voter approval. Revenue bonds secured by rates and charges for utility enterprises generally do not require voter approval.

The issuance of bonds in excess of $80 million would require higher water rates and charges. Even though the City is legally authorized to issue additional bonds without voter approval, the Council desired a vote on the issue since such an impact would increase rates and charges. The City's analysis projects that if the acquisition price exceeds $80 million and the City is required to issue $55 million in additional bonds, the estimated increase to a fixed capital charge of the water rate on the average single family residence within the service area of the Claremont Water System would be approximately $28 per month, or $336 annually. In addition to the fixed capital charge, charges for actual water use would be set as the variable component of water rates. The projected water rate is based upon a customer with average monthly water usage of 27 ccf per month. Actual increases may be higher or lower depending upon water use.

After bonds are issued, actual future water rates and charges could increase or decrease during the repayment period beyond the City's estimate. These changes could occur as a result of several factors, including the cost of water, infrastructure repairs and costs of operation and maintenance of the system. Water rates and charges will also vary based on consumer consumption.

The City Council called this election to submit this Measure to a vote of the electors of the City. A "Yes" vote on Measure W by a majority of the voters means the City may proceed to sell bonds in an amount necessary to fund the acquisition of the system in an amount not to exceed $135 million, and establish necessary rates and charges, which are also subject to the Proposition 218 process. A "No" vote on Measure W is a vote against the City's sale of the bonds.

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Created: July 23, 2015 14:56 PDT
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