Update on research...

With the big meeting on the horizon, residents have been doing their due diligence through research, and forwarding it to me. There have been a few discoveries I would like to share with you.  First, I would like to share a concern related to the Madera Ranchos Water Company Inc.   Second, I would like to share the two most recent financial reports for Calwater and Bakman Water Company.

It has been brought to our attention that a privately owned water company called Madera Ranchos Water Company Inc. was sold to Madera County approximately 20 yrs ago. The Ranchos Independent, has an article printed in 2014, explaining the history of the Ranchos water system (Link), and the article states that in 1996 the county purchased the water system from the Madera Ranchos Water Company Inc. for $350k.

On a document registered with the SOS, (link) it shows Francis H. Ferraro as the CEO of the Madera Ranchos Water Company Inc.  A concern has been brought up regarding a connection with Francis S Ferraro who retired as an officer of Cal Water in 2016.  He is now a Manger of Special Projects, and has represented Cal Water in meetings regarding the Rolling Hills water system. This publication shows the current officers and directors of Cal Water. (Link)  

I contacted Francis S. Ferraro by email to inquire about the connection. Mr. Ferraro expressed that he has never been involved in the operations of Madera Ranchos Water Company Inc., however, his father was.  He shared that his father sold the system, but had to take it back after it was sold when the new owner did not operate it correctly; he then proceeded to sell it to the county.  Additionally, Mr. Ferraro stated he would be available at the meeting to answer any questions.

My analysis is this, regardless to who was involved in the Madera Ranchos Water Company 20 years ago.  Calwater is not one person, it is large corporation, with a strong accountable history. (Link)  In this financial report it shows there are many directors and officers, and over 1000 employees, they provide water to over 2 million customers and to over 100 communities. The company is profitable and shows a profit of over $40 million per year. (Link to CPUC website 2015 Annual Report). (Link to Financial Report)  Bakman on the other hand, who is a great guy, is only showing a profit of less than $9k for the year ending 2015, according to this financial report found on the CPUC website, and other years at a negative profit.  (Link to Financial Report 2015 on CPUC website) (Link to 2010, 09, 08 report found on CPUC website)

Below is a Statement from an Association Member, who asked me to add this to the Pros and Cons.

"I believe Bakeman is going to be running Riverstone Development, 

Riverstone is how I think his business is doubled in the past 12 month.

We can not tie together with Riverstone unless we pay many thousands in hookup fees per home.

This is because Riverstone would have to cut the number of homes in their subdivision to be able to give us water.

That leaves us where we are right now 335 connections paying for infrastructure wells and the whole mess.

CalWater I believe will be operating the water system for Gunner Ranch subdivision.

Gunner as part of a settlement in a legal action does not have to count any water they provide to either Rolling Hills or Children's Hospital against what they can pump.

Stability is one of the drivers in my decision.

If Bakeman dies where are we. Calwater could lose a dozen employees and another would step up.

Property values:

I refer to Calwater as the PG&E of water companies.

If I am selling my house and the buyer wants to know who provides my power and I say PG&E, end of discussion

If I am selling my house and I tell them I get my power from AAA power Company, I will be providing documents all week." 

Below is an Interesting video of Calwater just in case your interested.

Update on Meeting this Thursday Sept. 7th at 7:00pm

Basically all RH residents have the same common goal:

We want a reliable, stable, and trouble free water system at a fair price.  We want these problems related to water delivery, to be a thing of the past, and we do not want to hear about the details of why our water system doesn’t work, or that we need to raise more capital to repair or improve our water system.

We want to “Re-Green” our community and increase our property values back to where they should be, if we had a reliable and trouble free water system.  Or we at least, want a company that we can trust and hold accountable to keep our water system in good order.

We want a company that knows what they are doing, has the capital ready to fix the problems immediately, when they arise, and we don’t want hear about the details.  We want a company that has their management in order with extensive experience, a good reputation, reliable, and has the financial resources to keep us in water.

Below is a table showing what arguments have been vocalized either for or against the proposed options.  These are arguments people have expressed, and may not be 100% accurate.  These are the arguments I have heard; which is hearsay...  This is why it is important that you attend the meeting on September 7^th to hear from the presenters, and decide for yourself what you think.

Again, please be warned, this comparison has different opinions and viewpoints. I tried to be fair to all sides, however I have a vested interest, and therefore a strong belief in what path is best for our community.   It’s important you are at the meeting to get first-hand information from the companies themselves.  Please remember the vote this Thursday is non-binding, it is only to give our supervisor an indication of what path the rate-payers want the B.O.S. to pursue.  Basically the vote is between two options Calwater and Bakman; I have not met one person, who would consider "staying with the county" not even "The County Employees Recommend It"

Options	Pro Arguments	Con Arguments
County Owned	1.     They can’t raise rates without a 218 election.	1.     Proposed 7.7m additional bond needed, resulted from the engineering study 2.     Their track record with the RH Water System, has multiple failures. 3.     They cannot make major improvements without raising more capital and holding a 218 election. 4.     All the costs of any improvements must be financed by the 335 RH rate payers only. 5.     They can, and have before sued homeowners who refused to vote in a rate increase.  http://www.fresnobee.com/news/local/article19537395.html
CalWater	Some Proponents Claim: 1.       Combining our water system with 6,000 rate payers in the Selma water system, which would disperse the cost of capital improvements among 6335 rate payers versus the 335 in Rolling Hills Only 2.       CalWater is willing to make a substantial investment in our water infrastructure and has committed to do so in writing. 3.       CalWater has pledged to investigate the lowest cost solutions applicable first, however willing to spend the higher proposed amount; if necessary. 4.       Low income Program LIRA, as high as 50% deduction in the monthly rate. 5.       CalWater has the resources to invest in improvements when an emergency occurs. CalWater has more than 509,000 customer connections, more than $400 million in annual revenue, and more than $1.5 billion in gross utility plant assets. 6.       CalWater has teams of engineers, who work on water quality issues daily, they have more experts who can find solutions to our water quality issues. 7.       They have the legal experts, on call and already on retainer, who can find solutions to difficult legal problems; as they did with the existing county bond debt. 8.       They have been working with county council to find a solution to the requirement of retiring the current $3.7m bond.  These solutions required considerable time and investment by Calwater.  It is highly unlikely this type of solution would have ever been discovered without Calwater’s investment. 9.       They may acquire additional assets in the close vicinity, which could interconnect our water system with others for redundancy 10.   Calwater states that Bakman Water is also regulated by the PUC, therefore follow the same rate setting guidelines in relation to a percentage over investment. 11.   The proposed unmetered rate of $118 month is fair and with the low income program it could be substantially less for those who qualify.	Some Opponents claim: 1.       CalWater is guaranteed a 9% profit by the state, therefore they are incentivized to spend more money on improvements then necessary, in order to raise rates & increase their profits. 2.       Calwater will not look for the most efficient solutions, because they make more by spending more. 3.       Calwater is a big corporation with massive overhead, which will costs rate payers more than a small company, with less management. 4.       Some residents don’t want to be tied to the Selma water district, whose rates are based on smaller parcel sizes.
Bakman Water & Investment Group	Some Proponents Claim: 1.       Bakman Water Company and his new investment partners.  Would find more efficient cost effective solutions.  Which would save ratepayers money by spending less on improvements, therefore charging less in water rates. 2.       They are not guaranteed a profit by the state public utility commission, because they are a smaller company, which will cause them to be more efficient in finding solutions. This would result in them investing less in capital improvements, therefore saving us money in lower rates. 3.       Bakman’s thinking outside the box, and thrifty solutions will be more efficient, and take less money. They are faster solutions, and these creative solutions could get us off water restrictions faster than CalWater will. 4.       They are local and they are customers love them 5.       Bakman Water Company has doubled in size during the past 12 months	Some Opponents claim: 1.       Bakman Water Company has substantially less financial resources: According to this CPUC 2014 audit of financial year ending 2010 (The most recent financial report I could find). The company had 2500 customers & less than 5 million in Assets, $1.7 m in revenue, ending in a total operating loss for 2010 of $112k 2.       Bakman and his New Investment group may be less stable, there is no track record showing this new proposed ownership structure and their ability to effectively work together in the long-term. 3.       The Bakman Plan would leave us, under the same structure as we are now, having 335 rate payers absorbing the capital improvements versus 6335 rate payers under the Calwater plan. 4.       There is more capital, experts, redundancy, and more stability with CalWater, and the proposed rate is fair; in addition there is the low income assistance program. 5.       If they are growing that fast, there are usually growing pains, with hiring many new employees, training them and etc.  Furthermore if they doubled in size, they are still small, in comparison.