I0310038 Notice of Opportunity for Hearing & Order to Show Cause Why the Commission should not Petition the Superior Court for a Receiver to Assume Possession & Operation of the Conlin-Strawberry Water Co.

II. BACKGROUND

CSWC is a Class D public water utility located in an unincorporated portion of Tuolumne County near the town of Strawberry, California, approximately 30 miles northeast of Sonora, California. The service area consists of 9 square miles and contains 366 service connections tariffed at fixed or metered rates. CSWC furnishes domestic water to the Strawberry subdivision (406 lots, 284 or more of which are improved and receiving water service) and Dymond's Strawberry Ridge subdivision (103 lots, 45 or more of which are improved and receiving service). Both areas are near State Highway 108 and the Sonora-Mono Highway. The population fluctuates from approximately165 permanent residents to over 1,000 seasonal visitors because of the winter ski resorts and summer campgrounds in the vicinity.

Danny Conlin has operated the company and water system since 1963. After inheriting sole ownership of CSWC in 1981, he applied for Commission approval to transfer his ownership to a newly formed California corporation, the Conlin-Strawberry Water Co. Inc. The Commission approved and granted this application in 1983.¹¹ Danny Conlin is CSWC's sole director, officer, and shareholder.

In 1983 and 1986, the Commission authorized the Respondents to borrow for system improvements $ 411,200 and $51,500, respectively, under the Safe Drinking Water Bond Law of 1976 (SDWBL). The SDWBL loan program is administered by the California Department of Water Resources (DWR). The Respondents were also authorized to collect a surcharge from ratepayers for repayment of the SDWBL loans, which had to be deposited into the SDWBL Trust Account.¹²

¹¹ See, Applic. of Danny Conlin, Executor of the Estate of Miriam E. Conlin, dba Strawberry Water Co. D. 83-03-007, 1983 Cal. PUC LEXIS 624. ¹² See, Ordering Para. 10, Applic. of Colin-Strawberry Water Co. for general rate relief -- In the matter of D. 83-05-052, 1983 Cal. PUC LEXIS 916 at *37 - *38; Ordering Para. 2, Applic. of Conlin Strawberry Water Co. Inc. to Borrow Funds under the Safe Drinking Water Bond Law and to Add a Surcharge to Water Rates, D. 86-11-004, 1986 Cal. PUC LEXIS 670 at *5, 22 CPUC2d 292 (November 5, 1986).