Letter to the The Monterey County Herald,
October 16, 2013

Now that petitions for the public purchase of Cal Am are circulating, rumors are once again flying that Cal Am is worth up to $800 million, much more than ratepayers could afford. Really?

A few years ago, Cal Am's parent company was paid $470 million for its Arizona and New Mexico holdings that served 174,000 customers, well over four times the number of customers our local Cal Am has. In 2011, WaterPlus obtained a professional appraisal of Cal Am for $94 million. Cal Am has a debt equal to $59 million. That would leave a shareholder equity of only $35 million, but even that is too high.

The reason is the San Clemente Dam. An eminent-domain judge would have to consider the $49 million cost of the dam's removal to be a liability because a public purchaser would have to pay that amount to remove it.

So, reducing an equity of $35 million by $49 miliion leaves Cal Am shareholders $14 million under water, hardly $800 million above. That loud gurgling sound you hear from Cal Am in its opposition to eminent domain is its gasping for air.

Ron Weitzman

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