Strawberry Property Owners Association
President's Response
The following is the SPOA President's response to the proposed water rate increase at the public meeting
conducted on September 30, 2006 meeting in Strawberry.
Fri, 27 Oct 2006
SPOA Members:
For those of you who have been following our efforts supporting the
transition from the Conlin Water Company to the Del Oro Water Company, the
California Public Utilities Commission (PUC) conducted a public meeting on
September 30 at the Pinecrest Elementary School in Strawberry to collect
public input on Del Oro's application for a 76% water rate increase.
The meeting was attended by approximately 35 Strawberry residents and
property owners along with PUC staff and representatives from Del Oro. The
primary reason for conducting this meeting was to give staff the opportunity
to collect comments and concerns over the proposed increase prior to preparing
a staff report for the Commission to use in making a decision. According to
Del Oro, the large increase is necessary to raise revenue ($111,000) up to a
level to meet estimated operating expenses due to long-standing losses incurred
during the entire time that Conlin Water was running the water company and
provide an adequate return. Because of this, coupled with the fact that rates
have not been adjusted since 1999, Del Oro has applied for this large rate
increase.
In addition to the letter SPOA submitted to the Commission on September 19,
we were present at the meeting and reiterated our concerns with the size of the
increase and asked staff to validate the accounting data that Del Oro is
using to justify their request above the 40% they had originally projected in
the settlement agreement negotiated in the purchase of the company earlier this
year. If the Commission finds the data accurate, they can decide to increase
our water rates to the level that Del Oro has requested. If not, it is very
likely we will see a 40% increase at a minimum then future adjustments made
through additional General Rate Increase (GRI) applications to the PUC.
Given the long-standing history of mismanagement within the water company
under the previous owner that has led to its purchase by Del Oro and
the poor physical condition of the entire water system (pipes, holding
tanks, and treatment facility) our water rates do need to be increased.
Because this application is only for increased expenses and providing Del Oro
with an adequate rate of return as the new systems owner/operator, we still will
be faced with a substantial rate increase to pay for the much needed physical
upgrades and repair of the equipment within the entire system. This will be
done separately sometime in the future once the engineering studies have been
conducted that will outline what improvements need to be made and in which
order of priority. Only until then will Del Oro be able to submit another
application to the PUC for another rate increase.
According to PUC staff, they cannot determine when the Commission will act on
Del Oro's current application given other issues they are currently adddressing.
We can be assured that no action will be taken until after the staff report
has been prepared and distributed for public review and comment. Only after
this is completed will the Commission schedule a public hearing on the
application and make a final decision. My guess is that this will not happen
until the December/January time frame at the earliest or sometime in early 2007.
We will continue to keep you posted on the progress of this important action
by the PUC.
Michael Jackson
SPOA President
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