Contested takeovers of water utilities are often based on promises of financial benefits. Advocates of a government takeover of the Monterey water system purport that "public ownership provides the best service for the lowest rate." However, public takeovers of water systems around the country have shown that condemnation leads to higher customer payments without providing the promised improvements in water service.

Condemnation, the legal process used to seize private property for public use through eminent domain, is a long and costly process. The condemnation process generally takes 5-10 years to settle with appeals, adding enormous legal costs to the price tag of running expensive water systems. These irresponsible legal costs are borne by taxpayers. Consider the following failures:

  • Residents of Felton, CA were told that a public takeover of their water system would cost $2 million, but the final price was $13.4 million -- all for the same water with no system improvements. Felton customers now pay the highest water rates in Santa Cruz County -- an average of $111 a month by 2021 -- plus an additional $535 in annual property taxes for 30 years to cover acquisition costs.

  • In 2016, public takeover efforts in Claremont, CA failed when the court determined it was in the public's best interest for the water system to stay a private utility. The city ended up paying Golden State Water Co. $7.6 million in litigation expenses.

  • In June 2017, the city of Missoula, MT took ownership of the local water utility after a three-year court battle. The city estimated the legal costs would be $400,000, but the final transition amounted to $7.5 million.

  • The takeover in Montara, CA did not result in lower rates or produce excess revenues as promised. In fact, the financial burden to consumers approximately doubled with the addition of new property taxes to fund the $11 million acquisition and $2 million in legal fees.