In Marysville, California, some members of the community, city council and board of supervisors have expressed interest in having the City take over the local water system in order to reduce water utility rates. The system, which is not for sale, has been owned and operated by California Water Service Company (Cal Water) since 1930 and currently serves approximately 12,000 people through 3,700 service connections.
Cal Water responded by commissioning an independent study to examine the financial feasibility and operational consequences of the City’s proposed takeover. The study was conducted by Rodney Smith, Ph.D., president of Stratecon Inc. and water resources expert in economics, finance and public policy.
After an extensive analysis, Smith concluded, “If the City does manage to acquire the Marysville water system by eminent domain, higher water rates for Marysville residents are a virtual certainty for many years to come. If the goal of acquiring the system is to charge lower water rates, then the effort should be abandoned because that goal is not a feasible outcome through the condemnation process.”