City of Bellflower

Measure W - Majority Approval Required

Measure W was placed on the ballot by the Bellflower City Council pursuant to California Public Utilities Code § 10061. If approved by a majority of voters within the City, Measure W would authorize the City Council to sell the City’s municipal water system (the “water system”) to California American Water Company (the “Company”) for $17,000,000.

On May 9, 2016, the City issued a request for proposals to fourteen different water purveyors regarding the possible sale of the water system. Several purveyors submitted proposals. After considering the matter at a public hearing on July 25, 2016, the City Council determined that the Company was the best qualified to continue to provide equal or better water service to water system customers. This finding was based, without limitation, upon the following:

1.  The Company agreed that it will not raise water rates for existing water system customers through December 21, 2020;

2.  The Company will provide equal or better customer service than is currently provided by the water system;

3.  The Company will provide an annual Capital Improvement Plan to the City for purposes of coordination and general community knowledge of water operations; and

4.  The Company will take action to ensure the highest quality water delivery services to customers of the water system.

Accordingly, the City Council selected the Company as the proposed purchaser of the water system and directed Measure W to be placed on the ballot for the November 8, 2016 election. California Public Utilities Code § 10061 requires that a majority of voters authorize the sale.

A YES vote would allow the City to sell the water system to California American Water Company.

A NO vote results in the City not selling the water system.

A PROPOSITION TO SELL THE BELLFLOWER MUNICIPAL WATER SYSTEM TO CALIFORNIA-AMERICAN WATER COMPANY IN ACCORDANCE WITH PUBLIC UTILITIES CODE § 10061

Pursuant to Public Utilities Code § 10061, the Bellflower City Council proposes to sell the Bellflower Municipal Water System (“MWS”) to:

California-American Water Company (“Company”)

This proposition is based upon the written proposal submitted by Company on June 7, 2016, that the City Council considered at a public hearing held on July 25, 2016.

Following the public hearing on July 25, 2016, the City Council finds that Company is best qualified to continue to provide equal or better water service to MWS customers on just and reasonable terms that do not discriminate against MWS customers. This finding is based upon the entirety of the administrative record including, without limitation, the following:

1.  Company agrees that it will not raise water rates for existing MWS customers for a period from transaction close through December 31, 2020;

2.  Company will provide equal or better customer service than the City and its contractor currently provides through the MWS;

3.  Upon voter approval and close of transaction, Company will provide annual Capital Improvement Plan (“CIP”) to City for purposes of coordination and general community knowledge of water operations; and

4.  Company will work with Bellflower Somerset Mutual Water Company before, during, and after the transaction to ensure the highest quality water delivery services to customers of the MWS.

Selling the MWS is also in the public interest as it will provide revenue to fund important public projects without the need for additional taxes or financing. Specifically, Company will purchase the MWS for $17,000,000.00, subject to approval by the California Public Utilities Commission. The City Council anticipates that, after paying for all debt associated with the MWS, it will be able to utilize approximately $8,800,000.00 to fund various public projects.

Accordingly, the City Council orders that the issue regarding sale of the MWS be submitted to the City of Bellflower’s qualified voters at the previously called November 8, 2016, Special Municipal Election.