6. User Fees, DHS Approval

Water and sewer utilities subject to Commission jurisdiction were required by the Legislature beginning January 1, 1983, to impose user fees

on customers' bills. (See Pub. Util. Code §§ 401, et. seq.) MCWC, Inc., will continue to collect and remit these fees to the Commission. For the period prior to transfer, Mesa Crest is required to collect and remit these fees before it can be relieved of its public utility responsibilities.

The sale will relieve Mesa Crest's owners of their duty to provide public utility water service to the service area. MCWC, Inc., is to record the acquisition of Mesa Crest at original cost in accordance with the Uniform System of Accounts for Water Companies.

Pursuant to the provisions of California Health and Safety Code (H&S) § 116525(a), any person or entity operating a public water system must have a permit from DHS to operate that system. A change in ownership of a public health system requires the prospective new owner to apply to and satisfy the DHS requirement that the new owner "possesses adequate financial, managerial, and technical capability to assure the delivery of pure, wholesome, and potable drinking water" (H&S Code § 116540). Accordingly, apart from the authorization from the Commission and the County for the acquisition of Mesa Crest, the new owner also must apply to DHS for re-issuance of the existing permit of Mesa Crest.

This application involves only a proposed change in control and operation of existing water facilities. No new construction or changes in the source of water supply are being proposed. Accordingly, there is no possibility that the transaction may have any significant effect on the environment.

The authority granted by our order today is not a finding of the value of the rights and property to be transferred.