3. Description of the Applicant Water Companies
Mesa Crest was granted public utility authority in 1957 in Decision 55615 and has been operated since that time by the Flynn family. The service area consists of approximately 600 acres, known as Mesa Crest, located north of and adjacent to the Angeles National Forest in or near the City of La Canada Flintridge.
The water system includes a Metropolitan Water District (MWD) connection through the Foothill Municipal Water District, from which Mesa Crest purchases all of its water supply. The water system has five pumping stations ranging from 15 to 100 horsepower capable of pumping 300-800 gallons per minute, along with five reservoirs with a total capacity of 3.5 million gallons. The system has 55,587 feet of water main and 710 active services with 710 meters installed and 60 available for installation. The system has 79 fire hydrants.
For the 12 months ended December 31, 2002, Mesa Crest reported total operating revenues of $907,842 and net income of $16,145. The Water Division has analyzed the company's balance sheet as of December 31, 2002, and summarizes it as follows:
Assets and Deferred Charges Amount
Net Utility Plant $424,135
Investments -
Current and Accrued Assets 295,068
Total Assets and Deferred Charges $719,203
Capitalization and Liabilities
Common Stock $355,000
Preferred Stock 60,000
Retained Earnings 112,498
Total Capital and Retained Earnings $527,498
Long Term Debt -
Current and Accrued Liabilities 71,513
Deferred Credits 49,893
Net Contributions in Aid of Construction 70,299
Total Liabilities and Other Credits $191,705
Total Capitalization and Liabilities $719,203
Mesa Crest's owners seek authority to sell their water system and transfer their public utility water service responsibilities to Cal-Mich and its subsidiary MCWC, Inc. A copy of the acquisition offer and key terms and conditions are attached to the application. The original cost of the utility plant being transferred is $1,613,367, and the depreciation reserve as of December 31, 2002 is $1,189,232, resulting in a net book cost of $424,135. The selling price is $425,000 cash on closing.
Cal-Mich owns 100% of the outstanding stock of East Pasadena Water, a Class B water company regulated by this Commission. The water system serves the East Pasadena area, contiguous to the cities of Pasadena and San Marino and is within a portion of and contiguous to the cities of Arcadia and Temple City. East Pasadena Water has operated its system since 1931. It has 2,802 active metered service connections, with 109 fire hydrants.
For the 12 months ended December 31, 2002, East Pasadena Water reported total operating revenues of $1,636,653 and net income of $227,620. The Water Division has analyzed the company's balance sheet as of December 31, 2002, and summarizes it as follows:
Assets and Deferred Charges Amount
Net Utility Plant $3,229,654
Investments -
Current and Accrued Assets 500,325
Deferred Charges 33,086
Total Assets and Deferred Charges $3,763,065
Capitalization and Liabilities
Common Stock $ 338,751
Other Paid-In Capital 4
Retained Earnings 1,871,157
Total Capital and Retained Earnings $2,209,912
Long Term Debt -
Advances from Associated Companies 300,000
Current and Accrued Liabilities 318,231
Deferred Credits 463,975
Net Contributions in Aid of Construction 470,947
Total Liabilities and Other Credits $1,553,153
Total Capitalization and Liabilities $3,763,065
