POINT RICHMOND, Calif.--(BUSINESS WIRE)--Jan. 4, 2000--Western Water Company announced today that Scott A. Katzmann resigned from its board of directors, effective Dec. 31, 1999.

The company also announced that Ira Yellin, president of The Yellin Company, a diversified urban real estate development company based in Los Angeles, recently joined the board. Commenting on these changes, Michael George, chairman, president and CEO, noted that the election of Yellin and the resignation of Katzmann complete an important transformation of the board.

"When I joined the Company in April of 1998, we agreed that Western Water Company's Board should be made up of more outsiders and people with a broad understanding of the region in which we do business. Although this has been a difficult period for the Company, I am pleased that our Board of Directors now consists of one representative of our strategic investor, Aguas de Barcelona, two well regarded Los Angeles businessmen with experience in areas important to the Company's future, and two officers of the Company."

The company's board is now made up of: Michael George, chairman; Juan Ras, director general of Aguas de Barcelona, one of the world leaders in water cycle management; David Abel, president of Abel & Associates, a publishing and public affairs consulting company based in Los Angeles; Ira Yellin; and Ronald I. Simon, the company's CFO.

The company also announced that it has taken steps to consolidate corporate headquarters in its office in Point Richmond and downsize its office in San Diego. The company continues to maintain regional customer service offices throughout its service area. The consolidation reduces administrative headcount and overhead.

In connection with the consolidation, Ronald I. Simon, executive vice president & CFO, chose not to relocate to Point Richmond and will leave his position as an officer of the company at the end of his employment contract in April, 2000. Although Simon intends to continue as a director of the company, he sold all of his shares in the company during December, after the decision to consolidate corporate offices. The first of the planned San Diego staff reductions became effective on Dec. 31, 1999.

The company will reflect the estimated cost of the consolidation -- including personnel severance and exit costs to be incurred over the next several months -- in its fiscal third quarter ended Dec. 31, 1999.

The company also announced that, on Dec. 28, 1999, the State Water Resources Control Board unanimously adopted an order approving in part and denying in part a transfer of conserved agricultural water, based on a petition jointly submitted by the company and the Natomas Central Mutual Water Company.

Approval of the order came after months of legal arguments, following a full evidentiary hearing before the board and despite objections from both the State Department of Water Resources and the United States Bureau of Reclamation. Although the order itself has no immediate revenue implications for the company, it validates the company's position that water conserved from one historic beneficial use -- in this case irrigation -- can be effectively transferred to a new beneficial use under applicable California law.

"This was a complex, expensive, contentious and time consuming process. In the end, however, the Board provided valuable guidance and direction that will be useful in arranging practical water transfers in the months and years to come. We are anxious to begin implementing the Board's clarification of the complex rules for moving water around the State," said George.

Finally, the company announced the execution of a contract for the sale of up to 24,000 acre feet of water to the Westlands Water District located in California's Central Valley. Westlands is the largest agricultural water delivery agency in California. Water will be delivered under the contract over the next three water years.

On Dec. 30, 1999, Westlands made its initial payment under the contract for water to be physically delivered from the company's existing inventory under a schedule to be agreed upon. No other terms of the contract were disclosed.

Commenting on the sale, George said, "This is an important milestone for the Company because it marks our first water sale to an agricultural user and our first in the Central Valley. Particularly in light of the obstacles the Company faces in gaining economic access to public conveyance facilities for long-distance transfers, we are pleased with this progress in establishing our presence in this active market area in which water transfers are encouraged. We are extremely pleased to have Westlands as a client."

Western Water Company is engaged in the identification, development, transportation, sale and lease of water rights and water to municipalities and other end users in the western United States and owns water rights and real estate in California and Colorado.

Statements contained in this release which are not historical facts are forward looking statements that involve risks and uncertainties that could cause actual results or future events to differ from those contained herein. Factors that could cause actual results or events to differ include the company’s ability to purchase water rights and obtain financing and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.