The offer, made this week, was called unrealistic by Denise L. Kruger, senior vice president of regulated utilities for Golden State Water.
City officials made the offer after residents were hit with substantial water hikes.
Golden State officials said they have no interest in selling the assets, but city officials have pushed forward.
Kruger said the city's formal offer "is nothing more than the first step in an expensive and financially risky eminent domain takeover process."
Golden State Water submitted a rate increase application to the state Public Utilities Commission for more than 24 percent in 2013 with additional increases in 2014 and 2015.
A proposed settlement with Claremont's 11,000 customers and ratepayers in Region 3 would receive a 15.1 percent rate increase in 2013. An additional 2 percent increase would come in 2014 and followed by a 1.8 percent increase in 2015.
Mayor Larry Schroeder countered the company's description of the city's offer.
"The offer made by the city is based on an inspection of the Claremont water system and an independent appraisal that was prepared in accordance with state law and accepted appraisal procedures," he said. "The offer made to Golden State Water is for the full amount of the current fair market value of the utility system and its assets."
Golden State Water has been in a pitched battle with customers in Claremont as well as in Barstow and Apple Valley and other Southern California communities over rate hikes.
Kruger said the city's position suggests it does not understand the true costs or financial responsibilities associated with providing reliable and quality water service.
"A $54 million offer does not at all account for the quality of the infrastructure, the value of the water rights or reflect estimates made by a third party more than six years ago," Kruger said.
"In 2006, the League of Women Voters suggested the value of the system could be $100 million and noted that it would cost taxpayers almost $200 million to finance the acquisition. The actual value of the system today is significantly higher."
Kruger also said the offer was not serious because the city knows water company officials have said the system is not for sale.
"Despite promises of transparency and accountability, Claremont officials have refused to disclose documents that are the basis for this action," Kruger said.
"They have obviously decided, without public discussion, to begin eminent domain proceedings, which ultimately would obligate taxpayers to hundreds of millions in water taxes. Customers will pay more for a lower level of service."
Claremont spokeswoman Bevin Handel said the city would not release its independent appraisal because "those documents have privileged information and if shown it will show our hand."
Handel said this week the city's legal team would send out an explanation of why the information could not be released. She added she had not heard of a response from Golden State Water after the offer was sent.
"Our council remains committed to ensuring that Claremont ratepayers are treated fairly when it comes to water service and rates," said Councilman Opanyi Nasiali.
"As we move forward, city staff will continue to evaluate and examine a variety of options to cost-effectively manage and finance the potential water system purchase."
Information on California's eminent-domain process was included in the Claremont offer, according to a city news release.
The water system appraisal and offer made to the water company does not trigger the eminent-domain process, which requires City Council authorization.
The council unanimously approved making an offer to Golden State based on the appraisal.
In addition to Claremont, the water company services small portions of Upland, Montclair, Pomona and unincorporated areas.