Yermo Water Company likely to change hands soon

YERMO — It may be sold; it may be taken by the courts, but one way or another the Yermo Water Company is expected to change hands soon.

Owner and Florida resident Don Walker is negotiating with two potential buyers for the company, but he faces the possibility of losing it to the San Bernardino County Superior Court before the sale goes through if he can’t show the California Public Utilities Commision that the water service is being properly run.

Yermo residents have been complaining about their water service for years. Most recently, two fire hydrants were out of service when a fire destroyed the old International Cafe on Calico Road Friday. One of the hydrants was stolen by metal thieves, who ran a vehicle into it to knock it over. The other one is old and needs to be replaced, said Marvin Hardy, who acts as a local manager for the water company.
Even if both hydrants had been working, Yermo Community Services District president Mike Henderson said he doubted they would have saved the building from the fire, which is being investigated as a potential arson. But Jesse Dexter, who lives on Grand View Avenue, a block away from the cafe that burned, would have liked to have a working hydrant to protect his house.

“We had to hose the house down because hot embers were blowing onto the house,” he said.

That was just one of Dexter’s complaints. The water pressure is poor. It smells and tastes bad, is unusable for cooking and drinking, and occasionally goes out of service entirely, he said. Within two years of buying the house, Dexter said he had to replace a brand new washing machine because the water had such a high mineral content that it corroded the pipes.

If the water company fails to produce information about its operations requested by the PUC, the commmission may hand the company over to the San Bernardino County Superior Court and ask the court to appoint a receiver to take control of it, according to PUC documents.

Walker said Tuesday that the company has its documents in order and expects to get all the required paperwork to the PUC by Thursday. Hardy said he expects the PUC to find that the company has fulfilled its requirements.

“We’ve done so much work for them — everything they’ve asked, we’ve done,” he said.

In the meantime, Walker said he is in negotiations with two large water companies, one a national company and one based in California, that are interested in buying the Yermo water service. Walker declined to name the potential buyers.

Henderson said the CSD is still interested in operating the water company as a public utility and plans to apply to the county Local Agency Formation Commission to have its water powers reinstated. If the water company is handed over to the county, the court will ultimately pick a receiver to take over operations of the Yermo Water Company, whether it is a private company or the CSD.

Henderson said the CSD is not opposed to the idea of another private company taking the water services over, as long as the level of service improves.

“The CSD has no desire to see that company shut down,” he said. “We just want to see it operated properly.”

He acknowledged that since the three-day water shut-off in July 2006 that left residents incensed, the water service has improved.
“Once the equipment was repaired and operational again, it’s been operational ever since,” he said.

The main issue is that the company has failed to invest in infrastructure improvements, Henderson said. Hardy said he does his best to keep the water service operating as smoothly as possible. Since he came to work for the company four years ago, Hardy said the frequency of shut-offs has decreased dramatically. He said he recently brought contractors out to check on all the wells.

“I just do what I can to keep it running,” he said.

Hardy acknowledged that there are still major problems with the water in Yermo, especially with old and corroded pipes that lead to poor water pressure. Eventually, the old piping should all be replaced, he said, and the fire hydrants should be replaced as soon as possible. The problem is funding, Hardy said — the company has a hard time collecting its bills and operates at a loss every year.

Henderson said he believes the water company makes enough money to sustain itself but not to pay for infrastructure improvements. If the CSD takes it over, he said, they will need to look for grant money or other sources of funding.

Timeline on the Yermo Water Company and the California Public Utilities Commission:

• July 2006: Yermo residents have no water service for three days after a well is vandalized. The PUC directs the water company to issue a notice to water-users to boil their tap water before drinking. The order is later rescinded.
• May 2008: Yermo Community Services District offers to buy the Yermo Water Company. The Yermo Water Company does not agree to the deal, and it stalls.
• June 2008: After launching an investigation into the water company, the PUC orders the Yermo Water Company to submit financial information, copies of complaints submitted by customers, and other documentation of its operations to the commission, or face having the San Bernardino County Superior Court appoint a receiver to take over the company.
• The water company was given until July 28 to produce the documents, but the deadline was later extended to Aug. 18 and then to Aug. 25. Walker requested and received a final extension until Aug. 28 due to floods and a tropical storm that closed company’s corporate offices in Florida for three days.

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(760) 256-4123 or abby_sewell@link.freedom.com