Background

This complaint, which was filed on November 25, 2009, alleges that Defendants Sunbird Mobilehome Park (Sunbird), Hawkeye Asset Management, James Martin, and Betty Martin are charging unjustly and unconscionably high water rates to Complainant, Lucas D. Hernandez, as well as all other Sunbird residents. The complaint also alleges that the water contains impermissibly high levels of arsenic. The names, addresses, and signatures of 29 "additional actual or prospective consumers" were attached in an exhibit to the complaint.

Sunbird instituted new tiered water rates in June 2006. A monthly table attached to the complaint indicates that, with the new rates, Complainant Hernandez' monthly water charges ranged between $14.16 and $595.26.

Complainant asks that the Commission determine that Defendants' tiered water billing system is unjust and results in unaffordable water rates; determine and order just, reasonable, or sufficient rates for water usage; award Complainant restitution of $2,909.35; and order Defendants to provide healthful water free of arsenic within six months.

Defendants filed an answer to the complaint on January 7, 2010. Attached to the answer is a May 12, 2006 notice to all residents of Sunbird, which noticed the following water billing rate schedule effective with the billing for June 2006:

Sunbird Water Rates Effective June 2006

Customer charge		$7.36/monthly billing cycle
Tier 1	0 - 10 hundred cubic feet (ccf)	$0.68 per ccf
Tier 2	The next 1 ccf	$1.10 per ccf
Tier 3	The next 5 ccf	$20.00 per ccf
Tier 4	Over Tier 3	$40.00 per ccf

The answer describes that Tier 1 and Tier 2 rates were set comparable to local utility rates, and that Tier 3 and Tier 4 rates are based upon a percentage of the costs to pump excess effluent from Sunbird's septic tanks. Defendants also describe Sunbird's steps to address the issue of arsenic in the water supply, specifically, that Sunbird has an application pending before the State of California Health and Human Services Agency, California Department of Public Health, which would result in municipal water being supplied, in whole or in part, for Sunbird residents.

The assigned Administrative Law Judge (ALJ) scheduled a prehearing conference for February 11, 2010, in Indio, California, but the prehearing conference was taken off calendar at the request of parties, who desired to pursue Alternative Dispute Resolution (ADR). On February 1, 2010, a neutral ALJ was assigned to handle the ADR issues.

On February 3, 2010, counsel for Complainant Hernandez sent an e-mail stating that her office, California Rural Legal Assistance, represents only Complainant Hernandez and that the 29 other persons who were signatories on a supporting exhibit of the Complaint, and named as Complainants in the caption of the proceeding and as Parties on the service list, should be removed from the caption and the service list.

As described in a February 17, 2010 ruling by the assigned ALJ, it appears that there may have been an intention to file the complaint under Pub. Util. Code § 1702, which allows a complaint to be entertained regarding the reasonableness of "any rates or charges of any gas, electrical, water, or telephone corporation" if it is signed "by not less than 25 actual or prospective consumers or purchasers of such gas, electricity, water, or telephone service." Based on the receipt of additional information from counsel, the February 17, 2010 ALJ ruling established that this adjudication will proceed instead under Pub. Util. Code
§ 2705.6(a).

Pub. Util. Code § 2705.6 provides, in pertinent part, that:

(a) A mobilehome park that provides water service only to its tenants from water supplies and facilities that it owns, not otherwise dedicated to public service, is not a water corporation. However, that mobilehome park is subject to the jurisdiction of the [C]ommission to the extent that, if a tenant complains about the water rates charged or service provided by the mobilehome park, the [C]ommission shall determine, based on all the facts and circumstances, whether the rates charged are just and reasonable and whether the service provided is adequate.

...

(c) The [C]ommission may afford rate relief or may order the mobilehome park to improve its water supply, facilities, and services on those terms that it finds just and reasonable, or both.

The February 17, 2010 ALJ ruling requested that counsel for Complainant contact each of the 29 signatories to the exhibit of the Complaint, and to report which individuals desire to be a party, or be on the "Information Only" portion of the service list, or be omitted from the service list. The ruling also directed that the Commission's Division of Water and Audits (DWA) prepare a staff report "to provide a factual platform for ADR efforts and any subsequent stage of the adjudication," and postponed the planned mediation pending receipt of the staff report. The DWA staff report was filed on May 3, 2010.