Contents
Intro
It’s been a while since I have posted an update. Besides the fact, that I have been extremely busy
managing my business and employees, I have been waiting to find the time to
write this. As Eric stated in his letter, we are writing these updates as
personal opinions, after being closely involved with the developments related
to the sale and condition of the Rolling Hills Water System. As most of you know, I started reporting on
my blog, about Rolling Hills Water, long before I joined as a board member. This will probably be my last post for quite
a while.
For those who don’t know, I am fully invested in Rolling Hills,
and I believe in RH; as I just built a 6200 sf home on an undeveloped lot on
Sierra View St, and I still have a prior home on Fig Grove Rd, built in 1976. I’ve lived in the central valley all my life,
raised by a single mother, and I have always worked for everything I’ve
received. As a youth, I started working
as a janitor’s aid. Then at 15, I began door to door sales. Every day after
school and every Saturday I knocked doors selling newspaper subscriptions. I’ve
walked just about every street in Fresno and knocked on thousands of doors. At
18, I knocked doors for Fresno Cable for 9 years, until starting my own vending
machine company at 27. After 3 years and
over 100 locations, decided to open a restaurant, on Cedar and Shepherd called
Burrito Loco. What a challenging
business! This is where I truly learned how to hire and manage people. After 6 years and while working on my secondary
mathematics teaching credential, I decided to get into the public sector. I sold the restaurant, and began teaching high
school and middle school mathematics for 6 years; I quickly realized teaching
is one of the lowest paid, hard work careers found; my hat is off to
teachers! Luckily the charter school I
was at, had a complete turnover of staff and everyone was let go. This is when I found my best suited career to
date, and strangely enough all the ventures leading up to this, is what
prepared me to be the best at what I do. I help people manage their everyday risk. Today I have 10 employees and over 3000
clients, as an Allstate Agent, and 6 time honor ring champion.
Why does all this matter?
Because I started from the ground up, like many of you. No money given as a head start, and no father
figure to learn from. These hard
lessons, figuring it out on your own, are the best lessons one can learn. It makes you stronger; the more challenges you
face in life and overcome, the wiser you become. None of this comes without risk, starting a
business is like building a well. There are no guarantees, but if you do your
homework, put your time in, and have the right intuition you can achieve a
successful return.
What are the Possibilities?
I believe in Rolling Hills; If we can establish a strong
redundant water system, homes our little community could hold far greater
property values than homes in Riverstone.
There are so many possibilities for Rolling Hills. However, like a business, to make Rolling
Hills great, it takes investment and leadership. Just think what this community could be, if it
were gated, we had new roads, and we had a maintenance program. We are in such
a desirable location, just look around to see, this is where everyone wants to
be! In addition, our large lots are a
thing of the past, and believe it, most people do prefer more land; it’s just
not feasible for todays developers.
What is the status on the water situation?
Since the last big association meeting, where we voted in
favor of Cal Water 120 to 43, Supervisor Frazier decided to wait for Bakman
Water to submit a proposal; with the strong encouragement from two of our RH
Board members. Bakman’s plea was they didn’t have enough time to develop a
proper proposal, and “30 days would not make a big difference” in the grand
scheme of things. However when the 30
days was awarded, then begun the continuation of weeks thereafter to have
meetings and explain the proposal to the county, our board, and have a public
meeting to inform the ratepayers. At
that meeting there were approximately 50 attendees, to hear about Bakman’s
proposal compared to the 180 ratepayers who turned out for the original vote at
Valley Childrens. This is understandable
because many of the people who voted, have already made up their mind and voted
it; thus why show up for another meeting?
The original plan given by Supervisor Frazier, at the
meeting between the County, Bakman, and our Board, was that the County B.O.S.
would present this to the County Board for a vote this December. I made sure to ask him, before the meeting
adjourned, if he would take it to the board this year.
I have made multiple calls to Supervisor Frazier’s Office,
and I have been told that we were not scheduled on the calendar yet, because
the situation is with county council.
Now, as of last week, my sources are now informing me they will not vote
on it this year. This week I spoke with
Supervisor Frazier, he stated they have submitted a request for documentation
to both Bakman and Calwater. They will
use this document and its answers to aid in their decision making, and to form
the contract outlining the responsibilities of the company taking over. He also stated, they plan to mail out ballots,
by mail, to each ratepayer, and he will use the results of that vote to aid him
in his vote.
Did our vote matter?
I feel that it had an impact, showing the voice of our
community. However with all the stalling
and behind the scenes political juggling, who knows what direction we will wind
up in. I feel the stalling in waiting
for the Bakman proposal, and now explaining it, has now created doubt amongst
the county. In contrast to feeling that everyone at the county was “on board
for Calwater” at the July meeting when they presented the county rate study
findings to our RH Board.
Details about the Bakman Proposal
In October Bakman Water revealed their proposal to us, below
is a summary of that proposal:
Shallow Water Wells
Their plan is primarily based upon using shallow water wells
and adding a new well into the system. Their shallow water well theory is based
on the premise that wells around the 400 to 500 foot range will have less problems
with water quality. Their claim is that
deep water wells, like the newest one we have (around 900 ft), supply water
with more contaminants; specifically the arsenic, which is our main culprit at
well 3.
Concerns with the shallow water well theory
A concern from a resident of 42 years
At the Bakman presentation, a resident of 42 years in
Rolling Hills, stood up to ask why they thought shallow water wells would be
the solution? He informed us that 30 years ago, Rolling Hills residents were
informed their wells were not deep enough and that shallow water wells were
causing problems back then. (If the gentleman who spoke, reads this, please
contact me. Or anyone who has experience with shallow water well issues in the
past)
Bakman’s response was “their geologist Ken Schmidt who is
the authority on water wells in this area, informed them, this was our solution
to water quality”. Bakman is basing
their plan on the opinion of this geologist; which we have not seen his opinion
in writing yet. I have concerns with
this response for two reasons: 1. Where does the buck stop? If its decided that
our next service provider is going to use shallow wells, and there is a problem,
where will the finger point? Is Bakman
going to point there finger toward the geologist? Most likely, yes, because of the way they
answered. They didn’t say they think
this would solve our problems; they said their geologist thinks this
would. 2. Just about every well driller,
I’ve spoken to, uses Ken Schmidt. In fact, he works with the county, in
developing most of their wells. Most
likely, he was the geologist involved in the development of our last well;
which we are having problems with. I say
this because county employees have told me they use Ken Schmidt when developing
a new well.
What happens if shallow wells run dry?
Let’s face it, with all the development going on around us,
and the history of droughts we’ve experienced, there is a good chance we may
need to go deeper. There are tens of
thousands of homes slated to go in around us; in addition to a new Community Hospital
on 12 and 41. They plan to make this
area into a little city. If we are
sitting here with shallow water wells and the drought hits, who is going to run
out of water first?
Riving Old Wells or Using that Land
Another strategy of Bakman Water is to try to revive old wells
or use the land where the old well was located.
From the documentation they showed us; they revealed:
1.
They may be able to use old well sites to drill
a new well next to it. However when asked if the sites would meet they current
well site requirements of 100ft by 100ft, they didn’t know. Back when the old wells were developed there
were less restrictions; these days, the county code requires 1/3 of a football
field for a well site; along with a lot of other expenses that were not in the
Bakman budget for the development of a new well site.
2.
They revealed, the only well site they may be
able to revive, would be the S&J well that we used to lease. There are two problems with this: 1. It’s an
ag well 2. We don’t have permission, from the land owner, to use it any longer.
Funding
Bakman’s proposal is fundamentally circled around. Rehabbing
the 2 wells we have, and digging a new well. This is the exact same proposal
the county presented; there are only 2 differences:
1. The cost to build the new well.
2. Bakman’s plan to use shallow water wells.
2. Bakman’s plan to use shallow water wells.
This leads me to the financing of the new water well. Bakman admitted that his company would have
to secure long term financing, in order to fund the capital improvements
(installing the new well). Because his company
is unable to show the cash reserves, without borrowing, needed to fund the
proposed new well. His team brought a letter of credit from Tri-County bank,
stating he has the ability to qualify for a $800k line of credit. This concerns me, because I don’t see how we
could even consider handing over our water system to a company, for free, who
has to go get a loan in order to make the improvements they admit are required.
In addition their numbers are very concerning. The Bakman
proposal is to secure a new water supply within 6 to 12mo. However their presentation projected the
costs estimated to drill and install a new shallow water well only; at an
estimated $800,000. Bakman proposes to
fund $800,000 by using low interest rate loans, however the $800,000 costs
projected in their power point presentation, shown at the firehouse in October,
left out the costs needed to secure a new well site, the costs to fence
and connect the site to utilities, and any other water treatment which may be
needed. These additional cost could be hundreds
of thousands.
Calwater’s Proposal
In Calwaters proposal:
1.
They have pledged to put in $1.7 million in
capital improvements, which they already have in cash, and do not need to apply
or wait for a loan.
2.
They have a commitment from Richard Gunner to
use the Gunner Well on Lanes Bridge and 10; which is already in, and is a
commercial grade well, not an ag well.
Yes they will have to treat the water for contaminants; however they are
using the pledged funding improve treatment, and process the water to meet Ca
Water Board Standards.
3.
Their plans are to manage the water and waste
systems for many new developments in this area and they have an agreement with
Richard Gunner for his future development.
4.
With Calwater we have our best chance to get
interconnected with new development in this area, creating a redundant supply
of water capacity (meaning if a well goes down, there will be many other
sources to carry on our water delivery needs.
5.
With their plan, they plan to get our water
system improvements integrated with other rate payers, to prevent only 335 rate
payers from carrying all the costs of capital improvements.
6.
Their plan to get us off restrictions as quickly
as possible; it’s all dependent on when or if they get the approval from the
county, and how many months it would take for the PUC to approve the sale. This process is the same for any company who
takes over.
Summary
In reality we all have the same goal, unfortunately we just
can’t agree on the best horse to get us there. I think we can all agree; we all
want the most reliable, highest quality water system, at the lowest possible cost. However it is an oxymoron to ask for the
highest quality and the most reliable, while having the lowest cost. Because
the first two needs take away from the third.
One of the 3 have to give. You have
to think about value, while prioritizing the order of the 3. It would seem logical that reliability would be
#1, while quality is #2, and while price is always a concern, it is cannot be
at the expense of the first two.
It appears we have two viewpoints (I'll call them Side B & C): Side B (Bakman), is opposed to any large corporation
and their corporate profits, intermingling into their life. They would prefer to do business with a small
business owner, in order to save money; even if that means sacrificing reliability,
quality, and financial strength. Side B’s primary fear is that Calwater
will double, triple, or further increase our water rates, once they get the
chance, and they fear that one day they may be paying $200 or $300 or maybe
even more for the water they could have received from a local company for
approximately $100/mo. Side B’s ultimate
concern is the price of their monthly water bill.
Side C (Calwater) is all about getting the strongest company
possible, who has the most reliability and redundancy; to get a company here
who has the financial strength and millions of dollars in the bank to make
improvements needed; when they are needed; without having to borrow money, or stall,
to figure out where the money will come from.
Side C is willing to pay a little more for this insurance, peace of
mind, and reliability. Side C
understands that in order for Calwater to raise the rates, there is a process
in place with the PUC, in which Calwater must justify any increase in the
rates. However side C is willing to pay more, if needed, so that they do not
have hear about water problems any longer, and so they will enjoy increased
property values.
Ironically, the two proposals show the proposed rates are
about the same anyhow. However side B is
convinced, the large corporation will jack up the rates as soon as they can,
and they will get bamboozled. All the
while, side C is willing to pay more for the security and financial strength,
but most likely will not have to. How is
this possible? It’s because of having more
rate payers to absorb the costs of the improvements; it’s not just the 335
ratepayers!
Calwater is an A class water company, with 2 million
customers, with plenty of capital to invest; while Bakman is a B class water
company, with a few thousand customers, who has to borrow money to make our improvements.
In whose hands are you going to put your most valuable asset in?
