Embattled water company seeks transfer of assets
October 9, 2008
The California Public Utilities Commission will host two public participation hearings today to discuss the transfer of Lake Forest Water Company assets to Tahoe Park Water Company.
Tahoe Park owner Richard Dewante has been operating Lake Forest since purchasing the company’s assets from David Robertson in 1996, a deal that did not include official ownership approval from the Utilities Commission.
While official ownership is still in the hands of the Utilities Commission, transfer of Lake Forest assets to Tahoe Park will give Dewante some choices, allowing him to either apply for government grants to improve his water supply or sell both companies to the Tahoe City Public Utility District.
Though Dewante has been operating Tahoe Park and Lake Forest for twelve years, customers concerned with water quality and consistent supply believe the utility district should be responsible for the water supply, not a privately owned company.
In 2007, Lake Forest property owners petitioned the utility district to form the Lake Forest Improvement District as a vehicle for the utility district to acquire Lake Forest from Dewante.
Following the formation of the improvement district, an assessment engineer and a water system appraiser were hired to assess Dewante’s water systems based on information from Dewante, the utilities commission and the Department of Public Health. Based on this information, the utility district has made an offer to Dewante requesting to purchase his assets for $308,000.
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“We have made him a written offer and he has not responded to us directly but has commented on the offer in his most recent filing with the utilities commission,” says Alan Harry, Utility District Administrator of Planning and Public Works.
Dewante’s comments in his Sept. 17, 2008 filing state a price discrepancy between utility district and Lake Forest cost estimates as a problem, what he says is an “apples and oranges” comparison between the assessments.
“The unit prices Lake Forest used are not comparable to the utility district prices because they both include and exclude items not included or excluded in the utility district unit prices,” says Dewante’s Sept. 17 filing.
In a recent interview, Dewante stated that the utility district is not offering the rate-based value set by the utilities commission, the accumulated capital of the company less its depreciation, adding “they’re not offering what it’s worth.”
While the utility district’s offer has been made public through Dewante’s recent filings, those who have made the offer have yet to hear back from Dewante.
“We haven’t had an opportunity to sit down and discuss why he disagrees with the offer,” says Harry. “He has yet to respond directly to our proposal.”
In spite of the standoff between Dewante and the utility district, Dewante has been receiving most of his water from the utility district since November 2002. Dewante was forced by concerned Lake Forest customers to discontinue his water intake from Lake Tahoe.
Though Harry says the utility district has been in contact with Dewante over the past few years to discuss a possible permanent connection, Dewante denies receiving the offers while the utility district waits for a response.
Though today’s public participation hearing will not be the deciding factor for Lake Forest’s assets, it will be a chance for customers to voice their opinions.
An Administrative Law Judge will preside over the hearings, aided by a court reporter, and will listen to public comments in an effort to help create a proposed decision for the transfer. Once the judge has made a decision, the proposal will be given to a five-person utilities commission board for later judgment.
“I will be presenting my plan and utility district will be presenting their plan,” says Dewante, “and the judge will be listening to statements from our customers for which plan they support.”
The public participation hearing will be at the Tahoe City Public Utility District Department of Parks and Recreation Board Room, 221 Fairway Dr., Tahoe City, CA. from 1p.m to 4p.m. and 6p.m to 9p.m.
Those who cannot attend either of the two meetings are encouraged to send e-mail or written comments to the Utilities Commission Public Advisor, Public.firstname.lastname@example.org or CPUC Public Advisor, 505 Van Ness Ave., Room 2103, San Francisco, CA 94102.
The Tahoe City Public Utilities District will also be holding a public workshop at the Utility District Department of Parks and Recreation Board room at 10 a.m. on Friday morning to answer any questions the public might have about the Lake Forest Improvement District and Utilities Commission public hearing.