Letter from Eric Olsen Regarding Bakman Water Co.

I agreed to post this letter on my blog, written by Eric Olsen, to give an alternate point of view:

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-water-company-seeks-steep-increase-in-selma-water-rates/874080/) was paying $145 in an area where the maximum lot size is one half acre before the rate increase. 

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/documents/staff-reports/March%202013/11-DOD-13-1.pdf ).  Of specific interest to me in this public documents is the following excerpt that sounded very familiar:

   “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/documents/staff-reports/February%202015/CSA%2047%20Staff%20Report.pdf).  Strangely, I can’t find any information until an entry from 2016 stating that the county completed a “218 Election” to raise rates and had replaced a pump (http://www.co.fresno.ca.us/home/showdocument?id=9354).  I don’t know what happened in that time except the statement:

“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

Community Meeting this Thursday Night at 6:30 at the Rolling Hills Fire Station

This Thursday there will be a presentation by Bakman Water Co to explain his proposal.  I will be posting my personal thoughts, on my personal blog, regarding the proposal after the meeting.

Update on 10/11/17

I’ve been getting a lot of inquiries from residents wondering what is going on with the water system; after our majority vote for Calwater on 9/7/17.

Cal Water   120

Bakman Water 43

Madera County   9

Delay the vote    8

Any Private company!  2

After requests from Bakman Water for 30 more days to assess the water system.  Supervisor Frazier agreed he would give Bakman Water 30 days, after our last meeting to submit a proposal. What I have heard is that Bakman has turned in a draft to Supervisor Frazier, but is still finalizing his numbers.  He plans to meet with Frazier and discuss the plan.

This is all the news I have.  We are waiting to see what the plan entails and when the Supervisor plans hold a meeting.  At this time, the only thing we can do is wait and call our supervisor.  He is having a townhall meeting in the Ranchos on Thursday October 26th at 8:30am at the Ranchos Cafe. If you want to ask him in person.

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.

Save the Date (Sept 7th) for the Water Vote

Save the Date!  September 7^th at 6:30pm (stay tuned for more details)

Chester will be sending out more details soon, we are waiting on the finalized agenda from Supervisor Frazier’s office.  However I decided to get this out now, to give a heads up.  There will be a big association meeting on Thursday September 7^th at 6:30.  It’s critical that everyone tries to make this meeting; regarding the future of RH Water.  We will hear about our 3 different water options and we will take a vote at the end of the meeting.  This vote is not a binding vote on Madera County.  However, it will be a vote to demonstrate the direction our community residents want our supervisor and the B.O.S. to pursue.  Supervisor Frazier wants to get a strong sense of what direction the community desires.  

At this meeting you will hear about the three options: 

1) Stay with County 

2) Support of County to Sell the System to CalWater 

3) Support of County to Sell the System to Bakman Water and his investment partners

Again, It's Important that you attend!

Overview: Basically all RH residents have the same common goal: (My Opinion)

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 don’t 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 at least, a company that we could 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.

June 29th Update on Water

Update on 6/29/2017

I’m sure everyone is wondering what the status is on our water system:

On June 19^th, Calwater issued a letter of interest to Supervisor Frazier expressing their interest in taking over our water system.  They mentioned normally they wouldn’t be interested in a system of our size, however due to all the development in our area, they are willing to take on our system and the deal would be kept separate from any other acquisitions through Madera County.

·        The rates are projected to be somewhere in the neighborhood of $100 to $125 per month, depending on if you use a lot of water.

·         Their projection of an average household use for our area, based on lased year’s usage, was 21,000 cf per household.  Therefore on their proposed rate schedule (which is the same as Selma’s) the average monthly cost (based on last year’s use) would be approx. $102 per month. 

·         Of course some months higher some lower, that is the estimated average.  They said they could offer a balance payment plan, for those who prefer more consistent monthly payment.  In addition, they have a low-income program for discounted rates to those who qualify.  For example, if you qualify for the PG&E low income program, you should qualify for Calwater's.

·         In a meeting with Calwater, they plan to make an investment in our water system of up to 2 million, if needed, to replace the arsenic treatment facility and upgrade infrastructure to make our system reliable.  By reliable, I mean IN FULL COMPLIANCE, You can water your lawns, your property values will go up!  You can sell your home, honestly, if you so choose to.

·        Calwater's attorneys believe we should not have to pay off the bond debt to sell the system, contradictory to what the county council advises.  Therefore presently, the county council is reviewing the legal requirements and reviewing the citations of Calwater’s attorneys.

·         We will have a public meeting when this is figured out. Please keep in mind, even if we stayed with the county for water, they are pushing for a rate increase (similar, or more than the amount Calwater is projecting here), and I believe they would not contribute as much as Calwater is willing to; towards the capital improvements. (Nor correctly).

In addition, there is still hope that we might get a backup well connection from the Gunner property, they were testing it last week and the output is over 1000 gallons per minute.  Supervisor Frazier thinks the county might start working on making a connection to this well, to our system; soon.  They are waiting on test results now.  All that prep work we were seeing on lanes bridge and 10, might have been for us; so we need to be appreciative of that; and cross our fingers we can have access to this well; if the water quality tests come back accordingly.

Right now we are still in a wait mode.  I will let you know as soon as all is ready for community discussion.

Update on Calwater Evaluation

Here it is about 3 weeks after our big association meeting, where the members who were present unanimously voted to pursue a partnership with a large water company, with financial strength, such as Calwater.  I am sure many of you are very concerned and are wondering if any progress is being made about our water situation.  It can be uneasy sitting on the sidelines waiting for answers to such important questions.   Questions such as: what is happening in regards to our most precious resource; a resource which we all so desperately depend on?  You may be wondering is anything being done to fix this problem?  As I promised at the meeting, “I would be all over it,” and I would keep in frequent communications with Calwater and the County, on the behalf of our community.

The purpose of this post is an attempt to reassure you that the wheels are turning and there is a strong possibility that we can once again have our neighborhoods green, with beautiful green grass for our mature landscapes, and the healthy trees we would expect from our wonderful Rolling Hills.  For the first time, in a long time, I have hope we may find a possible solution to our water problems; in a relatively quick fashion.   In addition, we could have a company with resources, who knows what they are doing at the controls.  When I say relatively quick, I mean by next spring.

Lets face it, and I think we all came to this very realization at the last association meeting, we cannot take chances on our water system, and time is of the essence.  Some members at the association meeting expressed, “what good is it to try and save money, while our trees are dying and our landscapes look like deserts?” What is our community worth, and what are our houses are worth, if we cannot use the water we need for ourselves and our landscapes?

Since our association meeting, there have been three meetings between Calwater and the County.  Which I had the honor of sitting in on.  On Wednesday May 24, Tuesday May 30, and Monday June 5^th.  At the first meeting between Brett Frazier, Norman Allinder, and Bill Cambell, the county reassured us they are sincere about possibility releasing control of the water system.  Calwater would not usually consider taking over a system, as small as ours, by itself.  However they are seriously considering taking us on, because of the additional growth surrounding us, and a few projects they are looking at which are not too far away.   The county shared there may be other county systems available for transition to Calwater.  However, it was re-affirmed that Rolling Hills is of the highest priority and the county as well as all stakeholders understand; we want to keep our system agreement independent; not dependent on any other system acquisitions.

At the next meeting on May 30^th the Chief Executive Officers of Calwater came down, drove the neighborhood and then met with County folks at Mr Fraziers office.    CEO’s from Calwater asked questions to feel out the county’s intentions.  I was at the meeting, it felt as though the executives were satisfied with the answers and somewhat interested in taking on this project.  However they are concerned about the condition of our system, and the financial debt our system has.  This appeared to be an initial exploratory session; where the exec’s were evaluating the opportunity and future area opportunities.  They were taking this time to evaluate if this is and avenue they would consider pursuing.

At the most recent meeting, on Monday June 5^th, Calwater sent out its engineering team to meet with county public works staff; they traveled to each well site at Rolling Hills, and their engineers took pictures and asked questions to county staff about the operations of the system.  Now they will write up an analysis of our water system, and submit and evaluation to Calwater exec’s.  They will use this report to explore the needs of our rolling hills waters system; both current and future.  Then they will make a decision in regards to if they are willing to take on our water system or not?

As I mentioned, I will keep everyone informed of any new developments and I will stay on top of this situation; as I have developed some solid relationship with the decision makers involved.

Below is an example of the rates Average, High, and Low usage (prepared by Eric Olsen) Based on Calwater's proposed rate schedule.

Last Night's Association Meeting

Thank you to everyone who attended the meeting last night.  It was quite a bit of information!  The county's public works director was there to remind us that we are still on water restrictions, because well 3 is still having Arsenic treatment problems. They are ramping up their citation efforts. If there is any good news, it would be they did get well 3 back online Thursday at just under ½ its rated output.  At the meeting we also learned from Eric more about the Budget and the many problems of unexplained expenses, increased operating costs, and unaudited financials.  John also presented some options with Tri-County Bank to pay off your bond debt early and save money.

 

At the meeting we presented 3 options to the association:  Calwater, Create Our Own Water Company, or stay with the County.  The members present were unanimously in favor of pursuing an agreement with Calwater.   Bill from Calwater spoke about his Corporation and how they operate.  He said they are regulated by the PUC and can only set rates, so they can see a profit of approximately 9% above their capital expenditures.  This means 9% above what they spend on our water system infrastructure.  Not, 9% on top of the routine maintenance.  Calwater has the resources and deep pockets to come in and make the capital improvements we need.   Bill from Calwater mentioned when making capital improvements they are generally less expensive than cost of a county project.  Bill states, when their is a problem, they fix it.  Its cheaper for them to fix it, then to have complaints and fines from the PUC.  Plus they have their reputation to protect, they do not want to devalue their stock.

Members spoke about their dissatisfaction with our current conditions, dead yards, devalued and ugly streets, their kids cant play outside because its full of stickers!  Many members are disgusted and fed-up with us having water restrictions; especially in a record rainfall, and surrounded by others who have the water to build new homes and water their crops.  Members say, they just cant understand what is happening to their once beautiful neighborhood. Other members spoke of their experience with Calwater and their relatives who have Calwater, as a water company, and their satisfaction.  Other members spoke of their extreme dissatisfaction with the county.  Not one person voted to stay with the county.  

I am in frequent communication with Bill at Calwater, Mr Frazier, and the Public Works Folks, and we will work on this tirelessly to get us a proposal within the next 6 to 8 weeks.  Bill says he needs that long to get his engineers out here to write up the analysis of our system and prepare an acquisition package.  Once we have this, your board members will let the association members know more details.  A realistic goal would be to get Calwater on our system correcting mistakes of the county by September and getting off restrictions by next spring.

PS  Some members expressed concern regarding the ones who pre-paid the bond.  Just to clarify,  Bill did answer on that.  There will be an equitable settlement for the ones that prepaid.  Most likely the 50 will get a refund, or some equitable credit.  Not to worry.  

Update: Monday 5/22/17 Bill tells me hes setting up a small team of engineers to come out within the next 2 weeks; ill keep you posted.