With a 9-1 vote, Castaic Lake Water Agency board members approved the acquisition of the Valencia Water Company on Wednesday.
The sole voice of opposition came from board member B.J. Atkins, who said he did not necessarily have a problem with the water agency's purchase of controlling stock from Newhall Land and Farming Co., but the nature and expedience of the transaction.
"The amount (the CLWA) will write the check for is $58.7 million," said Dan Masnada, CEO of the Castaic Lake Water Agency. "The agreed-upon price for Valencia Water Company is $73.8 million before any adjustments," but that includes approximately $24 million in an outstanding debt CLWA is assuming that will be refinanced, he said.
Water officials were approached by representatives from Newhall Land around the beginning of last year, but company officials demanded negotiations be done behind closed doors as a condition of the deal, according to water officials.
"They wouldnt negotiate unless we were absolutely committed to doing an exclusive confidential negotiation with them," said board President Thomas Campbell.
If the board refused to act on the offer at the hearing, it would jeopardize future negotiations, Campbell said. If CLWA did not take the deal, then the Valencia Water Company and its customers, which represent 84 percent of all retail water customers in the Santa Clarita Valley, could potentially be sold to a nonlocal source, he added.
One of the issues brought up at the meeting was whether it was legal for the Castaic Lake Water Agency to operate the
"We've worked out a strategy whereby we have the right to operate it," Masnada said. "We clearly have the right to buy it."
CLWA officials are remaining tight-lipped on their strategy for how it may be acquired, Masnada added. We don't want to dislcose it out of an abundance of caution at this stage of the game.