Fellow Residents of Rolling Hills,
I am writing this not as a member of the board but rather as a resident who has had the opportunity to hear every presentation and attend every meeting with the County, CalWater and Bakman Water Company who also has the benefit of having run a water system with considerable more capacity than ours for a few years. I am by no means an expert in the water out here but my experience has given me just enough knowledge to have a good idea if a proposed course of action will work. It is my conclusion, after more than a year of research and work on our water system that Bakman Water Company is the best choice in the short and long term.
Bottom line up front. I believe that the County, through regulation and ineptitude, does not have the ability or funding (through their waste, not because we don’t send them enough) to adequately maintain our system. Remaining with the county will keep us in a state of perpetual debt, skyrocketing costs, and inadequate supply in perpetuity. CalWater and Bakman both have the funding and technical experience to maintain our system in a way that will ensure adequate water supply and will be, without a doubt, better than the County. Of the remaining two, it is my opinion that Bakman Water has: 1. A history of providing good water at a better price. 2. Specific solutions to our water problems that show a better grasp of our local geology with a more informed and technically sound solution. 3. A specific solution which incentivises them to get us off water restrictions considerably quicker than CalWater.
First, Bakman has a history of customers happy with his rates, supply and quantity. We have a Rolling Hills resident who has 41 years of history with either living in or having family members living in Bakman’s district. She says the water is better and less costly than anywhere she knows in town. Empirically, with the exception of a couple cost of living adjustments, we can see that the water costs haven’t increased in Bakman’s district since 2007.
In contrast, CalWater proposed a 30% increase to rates in Selma (the water system they say our rates will be tied to) in 2015. The resident in this article (http://abc30.com/news/private
Similarly, I was able to find that the Quail Lake neighborhood began exploring privatization in 2010, CalWater was approved to take over the system by the County Counsel in 2012 which was approved by LAFCo in 2013 (http://www.fresnolafco.org/do
“Cal Water’s fees are regulated by the California Public Utilities Commission and approval by the PUC will be required before Cal Water can take over the operations. In order to keep costs down, the water portion of the operations will be included as part of the City of Selma service area so as to increase the base of customers and ultimately spread the costs of various maintenance and operational aspects out across a wider customer base. Sewer service is not offered in the City of Selma.
A survey of the Quail Lake residents was conducted on April 26, 2012, which resulted in 82.6% of the respondents being in favor of the transfer of the water and wastewater systems to Cal Water. A public meeting was also held on May 8, 2012, at the Quail Lake Clubhouse that was attended by the County, Cal Water, LAFCo, and approximately 75 residents.” (From “DOD-13-1” document)
Despite the vote noted in this document, rather than getting water in 2014, the county and CalWater were granted a one year extension to complete the transition (http://www.fresnolafco.org/do
“prior to finalization of the agreement, members of the community voiced their opposition to the transfer of water and sewer services.” (From “DOD-13-1” document)
CalWater may bear no responsibility for this deal falling through, I don’t know because I wasn’t there. But I am worried about what happened. Quail Lake was where we were in 2010, voted 82.6% for CalWater in 2012 and not until 2015 did the deal with CalWater somehow fall apart. And now the community has to pay more to the County and their system is still under County control. I can only surmise there is more to the story or something happened that was bad enough for the community to go from 82% in favor to enough apposed to stop the deal. Either way, we don’t want Rolling Hills to be in a situation even close.
In summary, while both companies have maintained good supply and quality throughout the years. The difference is that I have found nothing but good reports out of Bakman’s water district whereas CalWater seems to have a local history that concerns me.
Second, Bakman’s solutions are based on our system and local experience whereas I don’t believe CalWater’s are. I have personally watched Tim Bakman and his company leadership walk around our various well sites and brainstorm possible ideas. He has spent hours with the most respected people in this area on water.
For example, Mr. Bakman was inspecting our well #3 and asked the County Engineer why our Arsenic filter wasn’t working. He was told it was because of the very fine sand. The Engineer stated, in order to solve it, we would have to get either an entirely new type of filter or we would have to install another one to better filter enough water. Tim asked why we couldn’t just filter out the sand, which is much easier and cheaper and will then allow the existing filter to work correctly. The county engineer had obviously never thought of this but after thinking for a moment said he didn’t see any reason it wouldn’t work. I bring this up because installing another filter is exactly what CalWater and the County proposed.
As a matter of fact, there are very few differences between CalWater’s proposal and the County’s. And this makes sense because, if my memory serves, CalWater’s proposal was formulated using the same “expert” consulting company the County used for our Rate Study. This consulting company is based in the Bay Area and I was not impressed the time I met them. To a finer point, after one meeting, I would never consider hiring them for any business I was involved with.
In summary, Bakman Water knows the local geology, knows and works with all the local experts in the field, and wants to find innovative solutions. CalWater uses Bay Area consultants to come up with the same solutions we have been using for decades.
Third, Bakman Water knows how to create a win-win to solve our problems. He isn’t going to raise our rates until he gets us off restriction. He wants our system and we want water. This is how a business owner thinks. He will prove he can do it before he charges us for it.
It is undeniable from the numbers that Bakman will be less costly in the short term based on his proposed rate schedule. But we all know talking about water rates more than three years in the future is not very accurate. I think Bakman’s history of low rates shows that, whatever the rates go to, he will maintain our rates as low or lower than we will find anywhere else. This is made even more profound for me when compared to CalWater’s history of significant rate increases. It is noteworthy that CalWater will increase out rates on the first day (to approximately $115) and not get us off restrictions until the summer of 2019 “hopefully” at which time we would be going through our first rate study with them for a probable rate increase in 2020. With Bakman, we probably wouldn’t even see rates of $108 until 2019 or 2020 and we will be off restrictions by next summer (2018).
In summery, Bakman Water Company’s proposal incentives him to meet our immediate needs, immediately, and keeps our rates lower in the long run whereas CalWater doesn’t.
To address some concerns I have heard about Bakman.
First, the financial report showing he made a small profit last year. None of what I am about to write comes from Bakman Water. But I have consulted for a lot of business owners and this lack of profit shows he is a smart business owner, not that he doesn’t have enough money. He invests his money rather than paying taxes on it and therefore shows the smallest profit possible. These investments can then be used as collateral for loans, infrastructure improvement, and equipment upgrades of any number of other things. I have worked with companies approximately the same size as Bakman, based on external indicators, and I would guess he has a standing line of credit for well more than $5,000,000. Once again, I haven’t seen his books. But based on looking at the financials of many businesses, I have no doubt at all that Bakman Water has the ability to financially back our community in anything we could possibly have. I am also even more confident in my assessment of Bakman’s financial strength because the California Public Utilities Commission (PUC) has seen their plan and stated in writing that the Bakmen Water Company had the funds and technical expertise to run our system. And the PUC being the regulating agency for Bakman Water from the beginning, they have the access to his history and know what he is able to do.
Second, I have heard a couple of comments about fixing the system right instead of “bailing wire and bubble gum.” I assure you, the ideas I have heard from Bakman aren’t “patches,” and are, in fact, good fixes. Like the story above about the arsenic filter, they fix the root of the problem. Rather than getting a bigger, more expensive, Arsenic filter to filter out more of the sand, Bakman proposes to filter the sand with a simple sand filter so the existing Arsenic filter can do it’s job. This gets our system fully functional at a fraction of the cost.
Lastly, Tim Bakman’s performance at the Children’s Hospital meeting was not good and turned a lot of people off. Despite having considerably less time to prepare than CalWater, I hoped he would at least have more. I asked him about it afterward and he told me he would not give a number until he was 100% sure that number was the right number. He sees giving a proposal as his personal promise to us and he will not allow his company not to keep his promise. Once again, I compare this to the only other real proposal by CalWater. We know that, as of a few weeks ago, they hadn’t even notified the PUC that they were looking at our water system. Bakman has. CalWater based our proposed rates on Selma’s rates but they do not have PUC approval to do so, Selma has much smaller lots, and there is a real question as to whether the PUC would even approve our rates being combined with Selma – something they haven’t historically done. When going through these concerns, I realized that, while CalWater’s proposal was very good, they really have very little hard information behind the numbers.
In conclusion, I think Bakman Water Company will get us water sooner, gives us a better chance of bring happy with our service, and will be less expensive in the long run (without compromising service quality).
Thanks for taking the time to read this long post but I wanted to pass on all the information I have as I see it.
Eric
