BARSTOW • After weighing a litany of complaints against the Yermo Water Company, a judge with the state public utilities commission decided that the company's Florida-based owner is not fit to run it.
California Public Utilities Commission Administrative Law Judge Michael J. Galvin came out with a decision Monday directing the PUC's legal division to begin proceedings in the Superior Court of San Bernardino County that would take the operation of the company from owner Don Walker and hand it to a court-appointed receiver.
Galvin stated that the water company owner had failed to make necessary improvements to the water system, had not followed PUC and California Department of Public Health directions, moved the business out of state, did not pay fees and fines, and and did not have a certified water operator running the system.
Over the years, customers have complained of outages, poor water pressure and water quality and other issues.
Company owner Don Walker was out of the country Tuesday and not available for comment.
The PUC opened an investigation into the water company in April 2008 but had been concerned about the ability of the water company to provide adequate service since at least 1993, according to Galvin's written decision. Walker has been trying to sell the company for 10 years but has been unable to, largely because it loses money, according to Galvin's written comments.
The Yermo Community Services District had hoped to buy the company from Walker and operate it as a publicly owned utility. The CSD asked the PUC to delay its decision on the fate of the company so they could negotiate a sale.
"We'll continue to pursue possession of the water company, because it's the best thing for the constituents," CSD President Bob Smith said, but added that he was concerned that by the time it goes through the court process, the price will have gone up considerably. "... It's unfortunate that the PUC decided to get this off their plate rather than look after the interests of the Yermo constituents."
The CSD submitted its final application Monday to have its water powers reinstated by the San Bernardino Local Agency Formation Commission, a necessary step in the process of taking over the water service.
The CSD had considered contracting with the county to run the water service, but had second thoughts after hearing the county's bid of $633,000, when the water company only makes about $11,000 each month, Smith said. He said the service district is now looking at contracting with a private company, High Desert Underground, which could run the water service within its current budget constraints.
The parties have 30 days to appeal the judge's decision before it becomes an official decision of the utility commission, Galvin said. Once the court appoints a receiver, the receiver will run the company only until it can be sold to a court-approved buyer, PUC attorney Cleveland Lee said.
The water company is currently in process of requesting a rate increase that would more than double customers' rates. Its last general rate increase was granted in 1993. Fred Curry, chief of the PUC's water and sewer advisory branch, said Galvin's decision on the company's fate will not impact the current rate increase proceedings.
"It really doesn't matter who takes over the system — they're still going to need more money than they're currently collecting to run it," he said.
A public hearing on the rate increase is scheduled for April 14 in Yermo.
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