YOUR Award-Winning Local Newspaper FREE Find Us 24 Hours a Day at: Everywhere www.evalleyvoice.com Covering Porter Ranch, Northridge, Granada Hills, Chatsworth, and Valley Communities West of the San Diego Freeway Volume 8, Number 12 December, 2013 Includes 5,200 Entitled Home Sites Toll Brothers Announces Agreement to Purchase Shapell Homes oll Brothers, Inc., (NYSE:TOL) (www.tollbrothers.com), the nation’s leading builder of luxury homes, and Shapell Industries, Inc. (“Shapell”), a premier Tlocal private California builder, announced that they have entered into a definitive purchase agreement under which Toll Brothers will acquire the home building business of Shapell in a stock acquisition for approximately $1.60 billion in cash. Shapell has a long and illustrious history as one of California’s largest and most successful land development and home building companies in the affluent coastal markets of Northern and Southern California. Since its founding in 1955 by brothers Nathan and David Shapell, and brother-in-law Max Webb, Shapell has delivered more than 70,000 homes. Shapell’s land portfolio, which Toll Brothers is acquiring, consists of approximately 5,200 home sites, 97.5% of which are entitled, in established communities. This land was assembled over many decades in many of the state’s most affluent and high-growth markets: Porter Ranch, the San Francisco Bay area, metro Los Angeles, Orange County and the Carlsbad market. Through August 31st of calendar year 2013, Shapell has delivered 347 homes at an average price of $791,000. CityWatch Having entered the California market in 1994, Toll Brothers has delivered over 7,700 homes, generating approximately $6.5 billion in revenue from more than 90 communities in the state. Toll Brothers is currently offering homes in Why DWP Water Rates Keep Rising 9 communities in affluent Coastal California markets at an average price of By Jack Humphreville approximately $1,000,000. The approximately 5,200 lots Toll Brothers expects to ur water rates are going berserk. acquire from Shapell would bring Toll Brothers’ total lots owned and controlled in Over the last year, water rates have shot up by about 25% to 30% because our California to approximately 9,200. Department of Water and Power has been forced to rely on more expensive purchased * * * O water from the Metropolitan Water District of Southern California as our supply from the Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated: “We are Owens Valley has been curtailed because of environmental regulations and a below average honored and thrilled to have been selected by the Shapell family to continue the snow pack. legacy of such an amazing company. The tremendous land portfolio the Shapell In addition to the pass through of the higher costs of purchased water from MWD, DWP family has amassed over decades in California presents an incredible opportunity is expected to request a multiyear base rate increase of 6% to 7% a year in January. Based for Toll Brothers. This acquisition will provide significant growth over the coming on rough estimates, this bump will total at least $250 million over the next three to four years, years and, we believe, will be accretive to earnings in the first year, excluding adding another 20% to 25% to our bill. transaction costs. These new revenues will be used to upgrade the Water System’s aging distribution “Shapell’s current portfolio dovetails perfectly with our own California system and to implement numerous water quality initiatives, including those related to open footprint and luxury brand, and adds meaningfully to our presence in premier air reservoirs and the use of chlorine as a disinfectant. coastal locations in California. Based on our two decades in the California market, However, there appear to be other projects that Ratepayers will be asked to finance we believe the experienced Toll Brothers and Shapell teams will continue to bring through these higher rates. outstanding lifestyle communities and homes to buyers in Northern and Southern * * * Coastal California for many years to come. We look forward to welcoming a very DWP has embarked on a strategy to reduce its dependence on MWD and its supplies talented group of Shapell employees to the Toll Brothers team.” from the Bay Delta in Northern California, and, to a much lesser extent, the Colorado River. Bill West, Shapell’s chief executive officer, stated: “The Board of Directors of As part of this strategy, DWP is pursuing an aggressive strategy to recycle waste water at Shapell made the difficult decision to sell their homebuilding business after careful the Tillman Reclamation Plant to use in the replenishment of the groundwater in the San deliberation. Toll Brothers’ outstanding reputation as a high quality home builder, its Fernando Basin and in its purple pipe program for the irrigation of large open spaces such focus on superior customer satisfaction and its employees made the decision easier.” as parks and golf courses. Robert I. Toll, executive chairman, stated: “We have long respected the At the same time, the Department is embarking on a plan to remediate the toxic Shapell family and what their company has accomplished. We believe this is the groundwater supplies in the San Fernando Basin so that it will be suitable for everyday use right acquisition at the right time in the right location for Toll Brothers. We believe in our homes. this positive side of the housing cycle has significant distance to run, and that this These two ambitious initiatives are expected to cost over $1 billion. acquisition should mesh well with the strength in the market.” City Hall also appears to be targeting Ratepayers’ wallets as a funding source for the Los Angeles River and its Stormwater / Urban Runoff program. The remediation and revitalization of the 32 miles of the Los Angeles River that runs through the City is a worthwhile project that will cost the City more than $1 billion. But just City Asks Audit Of 2 DWP Trusts because it involves water does not mean it is the Ratepayers responsibility to foot any portion of the bill. To date, DWP has done more than its fair share by “investing” at least $6 million he Los Angeles Board of Water and Power Commissioners has asked for an to fund the Army Corps of Engineers study. audit of two trusts that received about $40 million in ratepayer money over The City is also looking to tag Ratepayers with a significant portion of the cost its Tthe past 12 years. Water Integrated Resources Plan. This involves the capture, conservation, and reuse of The Joint Safety Institute and the Joint Training Institute together receive our wastewater, stormwater, and recycled water, even though it is the responsibility of the about $3 million to $4 million a year from the Los Angeles Department of Water Department of Public Works and its Bureau of Sanitation. and Power as part of a collective bargaining agreement with the union representing * * * DWP workers. The Water System must also benchmark the efficiency of its operations (including Shared The two trusts have received about $40 million, but city officials asked Services) and its salaries and benefits relative to other regional utilities so that Ratepayers for details about how that money was used say they have received inadequate know that their hard earned money is being used in a prudent manner. answers. DWP must also explain on all City Hall’s pet projects, including, but certainly not The five-member Water and Power Commission, which overseas the limited to, the Silver Lake Reservoirs, Headworks (and its cost overruns), Griffith Park, department, asked City Controller Ron Galperin to move forward with his audit Elysian Park, the bargain basement rates for Recreation and Parks, the Fire Department’s last month after expressing frustration at the failure of the two trusts to complete hydrants and standby fee, and the City’s water fountains. their own internal audit in time for today’s board meeting as promised. While Ratepayers are not overjoyed with huge increases in their water bills, they are The commission also voted to withhold annual payments to the two trusts if entitled to full and complete disclosure off all aspects of the Water Systems’ costs (including they do not provide the past 12 years of financial documents. City Hall’s pet projects and other dirty little deals) and the opportunity to provide real input Members of the two trusts, which are governed by boards that include labor to the Department, the City Council, and the Ratepayer elected Mayor. officials and the DWP general manager, have refused to provide the financial data. DWP management has been open and transparent in its dealings with the Ratepayers. The most recent payments to the trusts were made in July, and the next Now City Hall must earn the trust and confidence of the Ratepayers and the voters. Otherwise, payments are not due to go out until eight months later. say goodbye to any tax increase that requires our approval. Warm wishes from all of us to you. All of us at Facey Medical Group would like to thank you for your support over the past year. We wish you a merry and safe holiday season, and a healthy, prosperous 2014! PORTER RANCH 19950 Rinaldi St Porter Ranch, CA 91326 Ali Goharbin, M.D. Susan Kranzpiller, M.D. Michael Nelson, M.D. (818) 403-2400 Family Medicine Family Medicine Internal Medicine Elise Kwon, M.D. Richard Landers, M.D. David Chien, M.D. Tanya Falkowski, M.D. Internal Medicine Internal Medicine Pediatrics Pediatrics You can join Facey Medical Group at any time. Facey isn’t an insurance company. We’re the doctors who accept most of the HMO or PPO insurance plans that you may have to help cover the cost of your care.