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Broken Promises, Property Tax Increases and the Myth of Local Control in Ojai, California

A new Truth from the Tap case study shows how the experience in Ojai, California should serve as a cautionary tale for other communities, exposing the ways activists can weave a dishonest narrative and lure citizens into supporting a condemnation takeover under false promises and assumptions.

In 2011, activists in Ojai, California, began pushing for a government takeover, or condemnation, of the state-regulated and professionally managed local water system owned by Golden State Water Company. The activists claimed that a takeover was necessary because of unfairly high rates.

Between 1998 and 2013, Golden State Water invested more than $18 million to maintain and improve the Ojai water system. Rates funded these necessary investments, and any operator that properly maintained the system would have faced the same costs.

Activists began coordinating a takeover attempt with the Casitas Municipal Water District (CMWD), a neighboring water system with a history of providing foul smelling and poor tasting water to customers. In August 2013, with the support of CMWD Board Members and staff, a property tax increase was approved by voters to finance a takeover of the Ojai water system. The property tax increases approved up to $60 million in bonds to be issued by CMWD to purchase the water system from Golden State Water.

In their campaign to enact the property tax increase, appearing on the ballot as Measure V, activists made several predictions and promises that turned out to be false. Most notably, activists underestimated the acquisition costs of condemnation, made deceptive rate predictions using incorrect assumptions, and pushed a shortsighted narrative on local control that has been proven false by previous takeover efforts.

In the end, instead of a protracted and costly legal fight, Golden State accepted an offer by CMWD to purchase the Ojai water system for $34.4 million in April 2017. Since the takeover, Ojai customers have faced massive rate increases unchecked by any government authority – and the largest property tax increase ever implemented in their small city.

Read this new case study and see other content cautioning against government takeovers on our condemnation microsite here.

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