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HomeMy WebLinkAboutStaff Report TRUCKEE DONN.ER PUBLIC UTILITY DISTRICT RITE-O.FF LIST. Accounts closed 12131192 and prior and still uncollected as of 9117193 WRITE-OFF DA TE CUSTOMER # CUSTOMER AMOUNT CLOSED 16968-0 Anzel, Jack $8.48 08/31/92 15648--9 Bledsoe, Donna 50.28 07/06/92 12975-9 Bronken, Paul 265.10 12/21/92 15081-3 Clark, Yvonne 65.78 05/02/92 16519-1 Cook, Matthew 329.85 09/1 1/92 8861-7 Cox, Robert 177.10 07/23/92 15496-3 Doyle, Kathy 291 .12 08/26/92 16482-2 Eaton, Robert 60.50 07/01/92 16548-0 Hodson, Michael 41 .32 03/02/92 15717-2 Negrete, Jose 42.11 07/06/92 17610-7 Ortiz, Jodie 115.15 12/01/92 16625-6 Paragon Sports 87.72 10/06/92 16994-6 Paragon Sports 53.55 10/06/92 15815-4 Steeber, Kurt 59.06 03/04/92 07008-4 Thompson, Anita 165.17 12/14/92 6378-2 Tilden, David 61 .78 06/30192 12822-3 Vierra, Darryl 13.47 10/06/92 16670-2 West, Linda 192.01 10/28/92 16109-1 West, Tim 53.18 09/18/92 Total Write-Offs $2,132.73 September ?�, 1993 }. Board of directors ROW Mary L. Chapman, Admihis. trative Services Manager' SUBJE`CT.. Bills.;for Bard consideration Attached is a copy of the bills for Board consideration. Among the bills is an invoice for work performed on the SCADA project. The funding for this project is scheduled to come from the COP financing. RECOMMENDATION 1. Authorize payment of the bills in the usual manner. 2. If the SCADA related bill is approved, transfer out of the Certificates of Participation funds on deposit with the Local Agency Investment Fund$425 to reimburse the general fund for the following: Sauers Engineering $425 JP/smc Attachment i TRUCKEE DONNER PUBLIC UTILITY DISTRICT BILLS FOR BOARD APPROVAL - SEPTEMBER 20, 1993 TOTAL ELECTRIC WATER DESCRIPTION ----------------------------f----_-__---------..__----------_------------------------------ DALE BURT 8,298.27 8,298.27 SEVEN SERVICE LINE REPLACEMENTS AND LEAK REPAIRS. DE CUIR & SOMACH 455.00 455.00 LEGAL SERVICES. HARKER & HARKER 10,102.00 10,102.00 LINE CREW CHARGES FOR THE WEEK ENDED 9/3/93, MBNA AMERICA BUSINESS CARD 787.09 626.89 160.20 SEMINAR IN RENO FOR MANAGEMENT TEAM MEMBERS (534.00) BOB QUINN'S USER MEETING IN SEATTLE EXPENSE (253.09). MCDONOUGH HOLLAND & ALLEN 3,386.40 2,370.48 1,015.92 PERSONNEL MATTERS. SAUERS ENGINEERING INC. 24,572.50 24,572.50 PROP 55 (21942.50) HIRSCIIDALE WATER QUALITY (375.00) ANNEXATION STUDY (75.00) DUKES PROJECT (80.00) ELECTRIC SYSTEM WALL MAP (110.00) HWY 267 RIVER CROSSING (160.00) SCADA (425.00) CONTINUATION HIGH SCHOOL SYSTEM MODELING (70.00) DONNER LAKE PURCHASE OF UTILITY (375.00) KENDALL EASEMENT." ACQ (500.00) MISC REQSTS AFTER ANDY (240.00) UNDERGROUND FEEDER NO 3 (220.00) . GLEN WAGNER FIELD SERVICE 3,453.75 3,453.75 VEHICLE REPAIRS AND MAINTENANCE. --- 51,055.01 16,553.1234,501.89 .September J 6 , 1993 TON Board off D►rectors FROlV1�: Susan M. Cra;ig, i7eputy'Oistr ct Clerk ;SUBJEC .i. Staff Report } ENDA A) Monthly bacteriological report Attached is the Summary of Bacteriological Water Quality report for the month of August 1993 prepared by Water Foreman Dave Rully. All distribution system and source samples were free of coliform. The District met the States drinking water standards for the month of August. B) Truckee ground and water source heat pump pilot project • Attached is a memorandum dated September 15, 1993 from Planning Director Terrell outlining a time line for the ground and water source heat pump pilot project The necessary donation commitments for six to ten installations are firm. The program will be promoted in the next PUD newsletter. There will also be public service announcements made to the Sierra Sun and paid advertisements for the project. C) Customer response and needs survey The fall TDPUD newsletter, Current Issues, will include a customer response and needs survey to help identify the level of customer satisfaction and provide an opportunity for customers to request information. Please see Planning Director Terrell's memo of September 16, 1993 attached. D) Acquisition of Donner Lake Utility Company by Del Oro Water Company Attached for your information is a copy of Order Modifying Decision 93-06-093 related to the application of Del Oro Water Company before the Public Utilities Commission of the State of California to acquire Donner Lake Utility. smc Attachments Truckee Donner Public Utility District Joseph R�Aquera John L, Corbett Business Office Engineering Services Robert A.Jones (916) 587-3896 (916) 587-3944 FAX(916) 587-5056 James A. Maass Patricia S. Sutton General Manager Peter L. Holzmeister MEMORANDUM Date: September 7, 1993 From: David Rully To: Peter Holzmeister Subject : Monthly Bacteriological Report - August, 1993 Attached is the "Summary of Bacteriological Water Quality" report for the month of August, 1993 . The August portion of the report shows that all 43 distribution system samples were free of coliform bacteria. The report also shows that all 30 source samples were free of coliform bacteria_ Thedistrict has met the State ' s drinking water standards for the month of August . Post Office Box 309 11570 Donner Pass Road Truckee, California 96160 TRUCKEE DONNER PUBLIC UTILITY DISTRICT , System► Source Samples Portions Percent Samples Portions Percent Yr. /Month Collected Positive Positive Collected Positive Positive 1993 May (Truckee) 26 0 0 8 4 50 (Prosser) 7 0 0 6 0 0 (Hirschdale) 1 0 0 0 0 1993 June (Truckee) 32 0 0 19 4 21 (Prosser) 10 0 0 10 0 0 (Hirschdale) 1 0 0 1 0 0 1993 July (Truckee) 24 0 0 20 3 15 (Prosser) 7 0 0 8 0 0 (Hirschdale) 1 0 0 1 0 0 1993 August (Truckee) 34 0 0 20 0 0 (Prosser) 8 0 0 8 0 0 (Hirschdale) 1 0 0 2 0 0 __J September;95 , 9993 TO: Board tf directors 1^ 20►f1l: Scoff Terrell, Fannin Director SUBJECT: TRUCKS G :aUND'AIVD WATER SOORC HEST Pt.MP P#LQT'. PROJECT gend' i The Truckee Donner Ground and Water Source Neat Pump (G&WSHP) Committee has been meeting once per week over the last three months to plan and prepare for the Truckee G&WSHP Pilot Project. The Committee's research efforts are paving the way to what I believe will be a successful pilot program. Attached is the timeline for the pilot's activities. We originally anticipated completing the Installations of all the test sites before snowfall. The Committee is committed to doing a proficient job and has decided that having this winter to prepare for the installations is necessary. The Committee, meanwhile, has all the donation commitments necessary from the manufacturers to complete six to ten installations (see status sheet). We are ready to begin promoting the pilot by presenting an article in the next Current Issues newsletter, providing public service announcements to the Sierra Sun, and through paid advertisements (see attached). Also attached is the application for potential participants in the pilot approved by the legal staff. ST/smc Truckee Donner Public Utility District Board of Directors Joseph R.Aguera John L.Corbett Business Office Engineering Services Robert A.Jones (916) 587-3896 (916)587-3944 FAX(916) 587-5056 .James A. Maass Patricia S.Sutton General Manager Peter L Holzmeister G&WSHP PILOT PROJECT DRAFT TIMELINE September 21 - Public Service Announcement -- TDPUD Newsletter Article September - Meetings with Local Regulators Building Department Fish and Game Department of Forestry Lahontan Regional Water Quality Control Board District November - Potential Participant Meetings/Education Dec-April 94 - Education/Training HVAC Contractor Training General Public Workshop Real Estate Agents/Brokers Workshop Building Contractors/Architects Workshop HVAC Contractors Meeting May-October - G&WSHP Installations May 93-May 95- G&WSHP Installations Monitoring Post Office Box 309 11570 Donner Pass Road e Truckee, California 96160 G&WSHP DONATION STATUS COMPANY EQUIPMENT LOOP MATERIALS OTHER STATUS Addison X 1 Heat Pump (2-4 ton) Bard X 1 Heat Pump (2 ton) Carrier X 1 Heat Pump (2-4 ton) Climate X 1 Heat Master Pump (2-4 ton) Command- X 1 Heat Aire Pump (4 ton) Econar X 1 Heat Pump (2-4 ton) Florida Proposal Heat under PUMP review Heatway Proposal under review Hydro Proposal Delta under review JTG Proposal Assoc. under review US X X X complete Power instal 'n Water X X x 1 Heat Furnace PUMP ton) G&WSHP DONATION STATUS COMPANY EQUIPMENT LOOP MATERIALS OTHER STATUS Loop Proposal Tech under review McElroy X 1 or more loops Van X 1 or Guard more loops Cryotech GS4 for 1+ loops Earth Proposal Tech under review .Truckee Donner Public Utility District Newsletter Volume 3 Number 3 Fall 1993 IIPR rsl �e6] ', '� 3h 5S'1 i S E - E y, �3 L jSL '� k 4Yn Fri 1 ti i.f 6FV SiLf�,i F WIN f-a ION Truckee Donner Public Utility District Board of Directors Joseph R.Aguera John L.Corbett Business Office Engineering Services Robert A.Jones (916) 587-3896 (916) 587-3944 FAX 6)587-5056 James A. Maass 4)1 PUBLIC SERVICE ANNOUNCEMENT Patricia S.Sutton FOR IMMEDIATE RELEASE General Manager Peter L. Hoizmeister ECONOMICAL ELECTRIC HEAT A several decades old heating technology is just entering California territory. Many of you may have never heard of a ground or water source heat pump (G&WSHP) , but it is a clean, efficient, and economical way to heat your home using electricity. This system is installed and operating in many homes and businesses in other regions of the country, some just as cold or colder in the winter than ours. Truckee Donner PUD staff has asked local construction industry professionals to form a G&WSHP Steering Committee and volunteer their time to pilot a study on the feasibility of using this technology in the Truckee-Tahoe area. This team of professionals will be spending the next several months working with G&WSHP manufacturers, dealers, and contractors to set up demonstration sites in Truckee. About six TDPUD customers will be selected to participate in the pilot program. Pilot program participants will receive the G&WSHP equipment and materials free from manufacturers and dealers. Participants will pay for the installation. The ground or water source heat pump doesn't make heat like conventional systems, rather, it moves the available heat from the ground or water into your home. It operates in the same fashion as an air-conditioner or refrigerator, but provides heating by reversing its process. The most efficient G&WSHP systems are over four times more efficient than conventional electric heating. This system is an excellent choice for new construction as an alternative to propane or wood heat. It can also replace aging electrical, propane, or wood heat in existing homes. It is a little more costly than conventional systems to install, but can cut your monthly space and water heating fuel bill over 50%. The G&WSHP Steering Committee will periodically update you on their progress in future articles. If you would like more information on ground and water source heat pumps and are interested in receiving an application for consideration in the pilot demonstration program please call Scott Terrell., TDPUD Planning Director, at 582-3931. Post Office Box 309 11570 Donner Pass Road = Truckee, California 96160 Truckee Danner Public Utility ' District Board ofJose Directors Ag ra John L. Corbett Business Office Engineering Services Robert A.Jones (916) 587-3896 (916)587-3944 FAX(916)587-5056 James A. Maass Patricia S. Sutton GROUND & WATER SOURCE HEAT PUMP General Manager Peter L. Holzmeister PILOT PROJECT PARTICIPANT APPLICATION Truckee Donner Public Districtcting a pilot program on ground and water source heat pumps in its service area The purpose of the project is to demonstrate this technology and determine its technical feasibility and cost-effectiveness for heating local area homes and businesses, The goal of this project is to provide TDPUD customers with a safe, reliable, and economical source of space and water heating. A brochure on G&WSHPs has been included with this application to provide you information on this technology. Participants in the pilot project will receive the G&WSHP equipment and materials free through donations by G&WSHP manufacturers and dealers. Equipment and materials labor/installation will be paid by the participant. A quote will be provided to the "final" candidates to determine their ability to cover these costs. This application process for participation does not guarantee any applicant participation in the G&WSHP pilot project. Applications will be reviewed by the G&WSHP Steering Committee, made up of local Truckee area professionals and community members, to determine the successful candidates for participation. The application selection process is based on an applicants's ability to meet the criteria below. Applicants will be chosen from the following Truckee neighborhoods: Donner Lake Sierra Meadows Downtown Truckee Tahoe Donner Prosser Area Olympic Heights Applicant Criteria Participants will be selected based on the following criteria: Permanence -- A customer must be a full time resident, live in the TDPUD service area, and have a good credit history. They also must be planning to live in the selected residence for at least 2 more years. Site Ability - The site, including the land and buildi.ng(s) , must have the necessary elements sometotherplete the distribution system)SHP . (i.e. central ducting Post Office Box 309 11570 Danner Pass Road Truckee, California 96160 Dedicated G&WSHP Heating - The customer-participant must be willing to commit to using only the G&WSHP system for space heating and, if so desired, include water heating. Thermostat Setting - The customer-participant must be willing to keep the system operating at a daytime temperature of approximately 68 degrees Fahrenheit and 55 degrees Fahrenheit for the night during the whole winter season (November-April) . The thermostat will be an "intelligent" recovery thermostat. Public Accessibility - Each participant must be willing to allow other customers to visit the actual installation as well as allow for follow-up tours and demonstrations of the equipment. Cost Sharing - Participants must be willing to pay the contractor' s installation costs. Retrofit Applications - On older homes, successful applicants will be required to retrofit their homes with conservation measures to bring their home(s) to the level of the current State building energy efficiency standard (Title 24) . There will be some flexibility in meeting these standards. Education - Successful participants will be required to attend a free G&WSHP seminar in Truckee. _--_---- ------------------------------------- - --------------Pilot Program-Participant Application Applicant's Name Home Address zip Mailing Address Zip Applicant's phone I understand that completing and returning this application does not guarantee my participation in this pilot project. Applicant's Signature Date Please send your application to: Scott Terrell, Planning Director Truckee Donner Public Utility District P.O. Box 309 Truckee, CA 96160 F EP O September 76, 399,3 TOM Boar af'Directars Ftf3tlll, Sean Terre!!, planning atrectar SUBJECT Custcamer response slid creeds survey The District is interested in doing a good job serving its customers`needs. Attached is a survey that will be going out to PUD customers by early October through the newsletter, Current Issues. This survey will help identify our customers'level of satisfaction with the District's operations by looking at such issues as duality of service, reliability, value, etc. The survey also contains a checklist for customers to request information on rates, water and energy efficiency, TDPUD programs and services, etc. ST/smc Attachment .9 �T d. ................. How satisfied are you that the TDPUD: 8.The water service from Truckee Donner 1.keeps you informed about issues that you Public Utility District is: care about: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 9. The electric service from Truckee Donner Public Utility District is., 2.cares about the quality of service it 1 2 3 4 5 6 7 8 9 10 provides its customers; 1 2 3 4 5 6 7 8 g 10 lfl.Overall,what is your impression of the Truckee Donner Public Utility District; 3.provides a reliable supply of electricity 1 2 3 4 5 6 7 8 9 10 without frequent interruption: 1 2 3 4 5 fi 7 8 9 10 Please send me more information on: Electric and water rates or fees 13 4.gives its customers information to help them control the cost of their electric bills: How to use electricity and water more efficiently 0 1 2 3 4 5 6 7 8 9 10 Opportunities for public involvement in 5.provides good value for the price charged decision making and planning 13 for electricity: Safety-related information El 1 2 3 4 5 6 7 8 9 10 TDPUD programs and services C1 6,provides good value for the price charged for water: Name 1 2 3 4 5 6 7 8 9 10 Address 7.carries out its operations in an environmentally responsible manner: Phone Number 1 2 3 4 5 6 7 8 9 10 1 can be contacted regarding comments =Er' 1� 1 G'32 DE CUIR 3,MAC ALJ/J /vdl a Decision 3-09- 41 September 1993 BEFORE THE PUBLIC UTILITIES CCMI SIGN OF THE STATE OF CALIFORNIA Application of Deb. Oro stater } . Co pan t Inc-, a California } o `potation y (U 61 ) , to acquire � all of the outstanding stock and, � assume utility operat oas of Application . 92-0 ®04.1 Donner Lake utility Company and for ) (Filed. May 20, 1 2 7ohn B. Williams, III to Sell all petition to Modity Deg. - - 9 f the outstanding stock and be (Filed July 23, 1993) relieved of operating � responsibilities for Don,r�ei" Lake � Utility Company (U 84 ) . � RDER moDIFYING DECISION 9 - -093 Statement of Facts Applicants Del Oro Water Company, Inc . (Del Oro) and John B. Williams III (Williams) have joined in filing a petition for modification of Decision. (D. ) 93-06-093 in which we denied the captioned application without prejudice, having found therein that applicants had failed to meet their burden of showing that the proposed sale of the stock of Donner Lake Utility Company (Donner) to Deg. Oro, involving a considerable premium over back value, would be in the interests of either utility's ratepayers , By that decision., the door was left aspen should applicant d.ec:1-de to reconsider the premium or demonstrate clearly that the buyer has the financial ability to serve the acquisition debt used to parcha e the Donner stock, Donner, a CaliferTzia corporation granted a Certificate of Public Convenience and Necessity (CFC&N) by D.50545 .in, 1954, presently is awned by Williams, who holds all 161,242 , 18 outstanding shares of its stock. Deb. Oro, a California corporation granted a. CPC&N by Dg 9745 in 1965, operates -through several districts, Paradise pines and Lime Saddle, and a wholly owed, subsidiary, Sterling Bluffs . SEP 15 '93 1-6:32 DE CUIIRI & SOMACH P.4/12 A. 92-05-041 ALJ/JBW/vd-1 Corporation. By D. 93-06-078 issued June 23, 1993, Del OrO was also authorized to :extend into and acquire operating responsibility for the water system Of the Magalia County Water District. The joint petitioners have recognized the Co=issionos concerns for the continued fiscal integrity of both Del OrO and Donner, and have consequently renegotiated the tems .of the proposed purchase and sale of Donner's stock. Sy the terms of the initial application, Del Oro was to pay a purchase price of $667 ,000, including a $250,000 cash down payment. The $417,000 balance was to be financed by the seller under a promissory note for 10 years bearing interest at 10% Per annum, Monthly installments were to be $5,510 . 69 with Donner's stock pledged as the security. 8y amendment, Del Oro also requested Commission authorization for Del Oro to borrow the $250 ,000 cash down payment from the Safor Corporation, a California corporation of which Del oro,s president and principal shareholder, Robert S. Fortino, is also the major shareholder• This loan would be for a term of 15 years and was to be repayable in ecTaal annual installments at the prevailing annual prime rate plus 1%, with a cap of 9% per annum. Tn addition, a ,consultant agreement" incorporated in the purchase contract provided for a first year jump sum consultant payment to Williams Of $20, 000 , plus out-Of- pocket travel, meals, and lodging expenses . Thus, the first Year cost to Del Oro under the original application as amended would have approximated $93,000 ($66,000 + 27,000 - Note + Safer loan) plus the one-time S20,000 "consultant fee. ,, Against this we could see approximately $65,800 to be available from Donner sources and not, enough pour Over from the other Del Oro districts to meet annual Donner acquisition costs and the first-year ,consultant fee. ,, most of the high acquisition cost was attributable to the $211,900 5ubstantial premium over the $456,100 book value. We coricluded that good ecoiiomic reasons for the premium had Tot been shown, that adequate working capital would not remain, and that 2 -H P 15 '93 '16-33 DE CUIR & SOMA] A.92-05-041 ALJ/JBW/vdl there was danger that ratepayers would have to underwrite the acquisition by higher rates, The petition for modification filed July 23, 1993 presents different terms. The purchase price is revised downward to $539, 000, includiRg a $250,000 cash down payment to be paid at close of escrow. The remaining $289,000 of the purchase price will be financed by the seller by a promissory note by Del Oro with interest at 8% per annum on unpaid principal, payable in equal monthly installments of $2 ,761- 83. All installments are to be paid on the anniversary date of close of escrow. Seven years from close of escrow, all amounts of principal and interest then owing on the note shall become due and payah-le. The Safer Corporation will loan Del Oro the $21-50,000 cash down payment on a 5-year promissory note bearing interest at 6% per antrum, payable in equal annual installments of $25,315 ,68. Williams will also be paid a one-time $20, 000 "consultant fee" upon close of escrow. The parties, by the petition for modification, in which they and Safor Corporation Join, ask that the Commission, acting ex parte, modify D.93-06-093 to permit Del Oro to purchase all of the outstanding shares of Donner from Williams, and for Williams to Sell said shares, on the revised terms set forth above, and for authority for Del Oro to issue its promissory notes to Williams and Safer Corporation reflecting these revised terms . GALS-Cussi-oln As stated in 0.93-06-093, the function of the Commission in determining whether or not to authorize a transfer of control of a public utility company is to protect and safeguard the interests of the public by preventing impairment of the public service by the transfer of utility property aiid functions into the hands of parties incapable of performing an adequate service at reasonable rates or upon terms which could bring about the same undesirable. result (So., Cal Mountain Water Co,- (1912) 1 CRC 520) . We want to SEF 15 92: 16:34 DE CUIR & SOMACH A,92-05-041 ALJ/JBW/vdl be assured that the purchaser is financially capable of the acquisitiorl and of satisfactory operation thereafter. As initially proposed, we were not able to see how Del Oro could, based on a Donner only cash flow analysis, handle the debt service that would have resulted from the acquisition terms as initially proposed and amended. The disproportionate high purchase price/book value, the completely leveraged pu-cr--haze proposition, and the necessity for nel Oro to dredge every financial coffer to try to make acquisition debt payments did not bode well for the ratepayers of either Do=eT or Del Oro. However, we left the door ajar should the applicants decide to reconsider the premium Or demonstrate clearly that there was the ffinar�ciFLl ability to se lice the acquisition debt. The parties have reconsidered and 'renegotiated the terms for an acquisition. As set forth in the July 23, 1993 Petition for Mod-ification of D.93-06-093, they have demonstrated a reasonable feasibility for servicing the renegotiated acquisition debt, The major breakthrough was a reduction in the Purchase price from $667 ,000 to $539 ,000. Now the premium over book value is $82,900, The financing interest rates have been lowered, although d balloon payment 7 years out remains a potential problem. The $250,000 cash down payment to he borrowed at 6% interest from Safor Corporation results in an annual repayment obligation of $25,315.68 over a 15-year period. The Williams ' note secured by the Donner stock will bear 8% interest and results in an anal ual obligation of $33,141.96 for 7 years, with a balloon amount for all principal and interest then owing due and payable. Thusf the anTxual debt obligation relative to the acquisition over the first 7 years will be $58,457.64 as opposed to the previously proposed $93, 000. At the end of the 7 years Del Oro proposes to refinance the then due balloon payment obligation. 4 SEP 15 '92 16:34 DE CUIR & SOMRCH A. 92-05-041 ALJ/JBTA/vdl Looking to the analysis accompanyizig the Donner Pro Forma income Statement for 1993 and its IIPUC Estimate" (see pages 12 and 13 of D.93-06-093) ,, we there noted that a net Profit of $38,100 before pre-existirtg debt service of approximately $10,000, resulted in producing a possible net income of $28, 100. Adding to this $28e100 the $24,700 depreciation, less the $20, 000 one-time only ,,consultant "fee" that Williams is to be paid at close of escrow, plus $34, 000 out of the "management fee" to Del Oro, produces an approximate $66,800 against the $58,457 .64 required to service the Donner acquisition debt the first year. Thereafter the $20,000 ,consultant feel, drops out, so that Del Oro, using the same $28, 100 net income (enhanced yearly as the pre-e- .fisting debt to be serviced is reduced) , plus the $34 ,000 portion out of the Del Ciro "management fee, ,, would have at least the same $66j800 available to meet the annual $58,500 debt service. And this without having to look for any "pour-over" from Del Oros Paradise Pines, Lime Saddle, or Magalia districts. The concerns memorialized in Resolution W-3285 are tempered when applied to the present acquisition by the significant changes to the terms as proposed by the July 23, 1993 Petition. The previous analysis cast against these revised terms persuades us that adequate working capital remains despite the premium, and that it should not be expected that Donner ratepayers will be expected to underwrite the acquisition by higher rates. Accordingly, the Petition of July 23, 1993 to Modify D. 93-06-093 pursuant to the renegotiated terms of the proposed purchase and sale set forth in that petitio should be granted. The transfer would not be adverse to the public interest. The Legislature established Public Utilities Commission Reimbursement Fee5j the amouiat of which are determined annually by the Commission and imposed upon each public utility to be passed through to its customers, CQ11ected, and remitted to the Commission pursuant to Public Utilities (PU) Code 5 433. Upon payment of the SEA' 15 `92 1-6:35 DE CUIR & SOMRCH P n S/i2 A992-05-041 ALJ/JBW/Vdl fees collected by Donner up to the date of the gale and transfer, williams may be relieved of his public utility obligations with respect. to Donner. FindjnM of-Fact 1, Both Del Oro and Donner are California water Public utilities within the jurisdiction of this Commissior, =n stock are z zal outstanding shares of Donn w er,s co presently owned by Williams who desires to sell his stock, give ap control over Donner, and be relieved of all public utility obligations associated with Donner. 3 . Del Oro and Williams have revised their initial stock Durchase and sale agreement so as to provide that for a purchase price of $539,000, plus a first-year $20,000 ,cojnsultant fee" to be paid at close of e5crowe Del Oro will acquire all Will'ams' stock in Donner, and Del Oro will take over control and operation of Donner. 4 . The $539,000 purchase price includes a $250,000 cash down paymezit with the $289,000 balance to be seller-financed by a promissory note, with the Donner stock as security, at 8% annual interest payable in equal monthly installments of $2,761- 83 with all installments payable on the anniversary date of close of escrow, and 7 years from close of escrow all amounts of principal and interest then owing on the note become due and payable. 5. Del Oro will borrow the $250,000 cash down payment money from Safor Corporation on an unsecured 15-year note bearing interest at 6% per annum, payable in equal annual, installments of $25,315.68. 6 . The $539tOOO purchase price includes a. premium of $82r9OO in excess of the $456, 100 net book value of Donner. 7 . while the Commission may lack jurisdiction to deteriaine the sale price of a utility, to prevent impairment of service or skyrocketing rates which could result from speculative Or maTginal purchase financing, it does look carefully at amounts over net book 6 P-- jF­-)G LiE CUIR & SOMACH �P A.92-05-041 ALJ/JBW/vdl value proposed to be paid before the Commission approves sales which are heavily leveraged. S. At an October 7 , 1992 public meeting, ratepayers were told that Del Oro after acquisition would initially continue Dormer's rates, but that a rate increase would 8ubequently be necessary to Pay for necessary repairs to the system. 9. The first year cost to Del Oro on the Williams, note would be $32, 142 while, the first year cost on the Safor Corporation note would be $25,316t ±o� an jritia! year debt service cost On the acquisition of $58,458, plus the one-time cost of the $20,000 "con5ultant fee" to Williams . 10. Donner's last rate increase, authorized in mid-1989 by Resolution W-3435, provides benchma-ck departure points for revenues and cost projections. 11. The pro forma 1993 Donner income statement pzovided by Del Oro, adjusted to delete an assumed 14% or $41, 300 rate inc.rea5e, and to reflect more realistic PrOjectiOn of operations labor salaries from those in Resolution W-3435, as well as other adjustments including service on the pre-existIng long-tana debt, indicates net income of. $28,100 which could be augmented by the depreciation accrual to produce net return of $52,800. After deduction of the first year's $20,000 "consultant fee" due Williams, this could leave an approximate $32,800 attributable to Don:aer available. 12. Were $33,000 of the $48,000 "management feet Del Oro proposes to charge Donner (the $15,000 balance being required for office Salaries) also to be applied along with the $32,800 described in Finding 11, a total of approximately $65,800 could be available to Del Oro from Don-Tier sources for meeting the acquisition debt of $58,458. 13. A transfer of Donner to Del Oro should benefit the Donner customers by providing the 'benefits of Del Oro's expertise in water company management. cZEP 5 P9-31 16-36 DE CUIR & SOMRCH A.92-05-041 ALJ/JBW/vdl 14 , There is no known opposition to the proposed sale of Donn82: stock to Del Oro and to Del Oro as'sijmption of management of Donner. 15. The proposed sale and transfer, as modifted by the Iy 23, 1993 petition to Modify D, 93-06-093, will not be adVerse to the public interest. conclusions of Law 1. The application for Del Oro to acquire all of the outstaAding stock of Donner and assume utility Operation Of Donner d for Williams to sell all of L.an the outstanding stock of Donner, as modified by the revised sale price and terms contained in applicants , July 23, 1993 Petition to modify D.93-06-093 should be granted to the extent set forth in the order that follows. 2 . Del Oro should be authorized to borrow the $250,000 down payment money for the oonner acquisition from safor Corporation pursuant to the modified terms set forth in the Petition for Modification. 3. The request of Williams that he be relieved of operating and public utility obligations and responsibilities for Donner should be granted, conditioned upon payment to the Commission of all public Utilities Commission Reimbursement Fees due and collected as of the date of the sale and transfer authorized in the order that follows. 4. A public hearing is not necessary. 5. Because the public interest would best be served by having the sale and transfer take place oxpeditiously, the ensuing order should be made effective on the date of issuance, IT IS ORDXMM that: 1. on or aftex the effective date of this order, John B. Williams ill (Williams) may. sell all of the outstanding stock of Donner Lake Utility CoMpallY (Donner) and be relieved of operating and utility responsibilities of Donner, and Del Oro water Company, Inc. (Del Oro) may acquire all of the outstanding stock of Donner and assume utility operations of Donner, all in accordance with the terms of the application as modified by the july 23, 1993 Petition to c ify Decision 93-06-093. 2 . Attachment A to the application, subject to the modification in terns stated in the applicants' July 23, 1993 petition to Modify [decision 93-06-093, is approved as the Agreement for Purohase and Sale of Stock. . As a condition of this grant of authority Del Oro shad assume liability for refunds of all existing customer deposits, i any, and shall notify the affected. customers, 4. Within 30 days of the sale and transfer hereby authorized, Del Oro shall -notify the Commission in writing of that faQtj and within such period shall file with the Commission a true copy of each instrument by which such transaction has been accomplished. 5. The foregoing authority is conditioned upon Del Oro assuming liability for all refunds under main extension agreements between Donner and others existing on the date Del Oro acquires Donner. . Del Oro shall either file a statement adopting Danner's tariffs or refile those tariffs under its own name as prescribed ire General. Order Series 9£. dates shall not be increased unless authorized by this Commissi.on- . Before the transfer occurs, Donner shall deliver to Vel Oro, and Del Ciro shall retain, all records of the construction and operation of the water system. 8. Within 90 days after actual. transfer, Tel Oro shall file in proper form an annual, report on Donner°s operations from the . first day of the current year through date of transfer. 9. Del Oro shall use its existing corporate identification n mher U 61 W in connection with the certificate or authority issued in this proceeding. The number shall appear in the caption of all original pleadings and in th.e title of pleadings filed in existing cases with this Commission. SEP 1S '93 16:337 DE C-UIR & SOMACH P.1 12 A. 92-05-041 ALJ/JBW/Vdl 10. On or after the effective date of this order, Del Oro 4-5 authorized to borrow the $250,000 down payment money for the Donner acquisition from Safor Corporation on an unsecured 15 year- promissory note bearing interest at 6% per annum, payable in equal annual installments of $25, 315 -68, as provided in, the Petition for modification. 11. Upon compliance with all of the conditiciis of this order, including the payment to the Commission of the Public Utilities Commission Reimbursement Fees provided in Public Utilities Code S 433 for year 1993, and such other period as way occur until the sale and trarisl'er is consummated, Williams shall stand reiievL--d of his public utility obligations and may discontinue service concur-rent with commencement of service by Del Oro as contemplated in the Agreement for Purchase and Sale of Stock* 12. The authorities granted in Ordering Paragraphs I and 10 shall expire on December 31, 1993 it they have not been exercised by that date. This order is effective today. Dated September 1, 1993, at San Francisco, California. DANIEL Wm. FESSLER President PATRICIA X. ECKERT NORM" D. SHUMWAY P. GREGORY CONLON Commissioners . ........................