WATER/RHG*
Decision _________
BEFORE THE PUBLIC UTILITITES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of HILLVIEW )
WATER COMPANY, INC. U-194-W, for )
Authority to issue evidence of indebtedness ) Application 00-10-043
(Promissory Note and Loan Agreement) and to ) (Filed October 19, 2000)
grant security interest in its assets. )
)
INTERIM OPINION
Summary
In Application (A.) 00-10-043, Hillview Water Company, Inc. (Hillview) requests authority, pursuant to § 816 et. seq. of the Public Utilities (PU) Code and Rule 33 of the Commission's Rules of Practice and Procedure to enter into a loan agreement with the Department of Water Resources (DWR) to borrow $3,408,477 under the Safe Drinking Water State Revolving Fund (SDWSRF); to encumber its assets pari passu, or ratably, with the interest of Hillview's existing or future secured loans; and to place in effect a surcharge on existing water rates for the purpose of amortizing the loan and accumulating a sinking fund reserve equal to one year's debt service.
On March 15, 2001, Hillview filed an Amended Application requesting for additional authority to enter into a funding agreement with DWR for a $25,000 planning loan under the SDWSRF. The purpose of the loan is to finance the cost of studies, planning, and preliminary engineering incurred in conjunction with the proposed construction project in the Oakhurst and Sierra Lakes districts.
These pre-construction expenses are now due and payable.
This interim order grants Hillview the authority to obtain a planning loan in an amount not exceeding $25,000 under the SDWSRF in order to disburse the pre-construction expenses associated with its proposed construction project.
In a separate matter before the Commission is an investigatory proceeding on Hillview on possible violations of statutes and regulations in connection with, among others, utility investment in plant and dealings with customers obtaining water service. Ordering Paragraph 7 of Order Instituting Investigation (OII) dated July 16, 1997 in I.97-07-018 states that:
Until further order, any proposals to increase rates or charges submitted to the Commission on behalf of Hillview, as well as any individual complaints filed against Hillview, shall be consolidated with this enforcement proceeding for consideration.
Because SDWSRF financing compels a simultaneous approval of a source of repayment of the loan, this interim order consolidates into the OII, Hillview's request for authority to borrow $3,408,477 under the SDWSRF as contemplated in the Amended Application.
Notice of the filing of A.00-10-043 appeared on the Commission's Daily Calendar of October 27, 2000. Eleven protest letters were received. Notice of the filing of the Amended Application appeared on the Commission's Daily Calendar of March 21, 2001.
Background
Hillview, a Class C water utility, operates a water utility subject to the jurisdiction of this Commission.
For the year ended December 31, 1999, Hillview reported that it generated total operating revenues of $878,360 and net loss of $78,528. The company's
balance sheet as of December 31, 1999 is summarized below:
Assets Amount
Net Utility Plant $4,072,168
Construction Work in Progress 139,921
Current Assets 313,410
Other Assets 620,750
Total Assets $5,146,249
Liabilities & Equity
Common Stockholders' Deficit $ (85,290)
Long-Term Debt 1,412,905
Current Liabilities 1,045,308
Other Liabilities and Deferred Credits 899,803
Contributions in Aid of Construction 1,873,523
Total Liabilities & Equity $5,146,249
Hillview owns and operates the Oakhurst-Sierra Lakes (OSL) water system, a community water system (OSL System). The OSL System serves the area in and around Oakhurst in the foothills of eastern Madera County. The water system serves a permanent population of over 2,000 through approximately 900 service connections. In addition, the community hosts an estimated one million visitors per year that pass through on their way to Yosemite National Park.
