9. Public Notification
LaBudde has been managing the WWC water system since October 2000 and has worked with WWC since 1997. Upon transfer of the water system to LaBudde, WWC's phone number and mailing address stayed the same. WWC's office was relocated from Fahlen's home to LaBudde's home. WWC's new office address is listed in the local telephone directory. In the monthly water bill, WWC's phone number and mailing address are listed. While no formal notification was provided to WWC's customers, the steps taken by WWC (1) ensured that customers had no lapse in their ability to contact WWC, and (2) allowed for an orderly continuity of service. Furthermore, a public meeting was held on January 20, 2004 with regard to a general rate increase application, which afforded customers an opportunity to meet LaBudde.
10. Conclusions and Recommendations
The Water Division recommends:
1. That the Application be accepted and approved with no further hearings, pleadings or filings necessary.
2. That Fahlen be granted authorization to withdraw from providing water utility service to customers of Weimar Water Company.
3. That LaBudde be authorized to assume the water utility service to the customers of the Weimar Water Company.
4. That LaBudde comply with the provisions of California Health and Safety Code (CH&S) § 116525(a), which states: "No person shall operate a public water system unless he or she firsts submits an application to the department and receives a permit as provided in this chapter. A change in ownership of a public water system shall require the submission of a new application." Accordingly, apart from authorization from the Commission for LaBudde's acquisition of WWC, LaBudde also must file an application with the Department of Health Services.
The Commission has considered the Water Division's recommendations and, finding them reasonable, will adopt them as stated above.
11. Categorization and Need for Hearings
In Resolution (Res.) ALJ 176-3125 dated December 18, 2003, the Commission preliminarily categorized this Application as ratesetting, and preliminarily determined that hearings were not necessary. No protests have been received. Given these developments, a public hearing is not necessary, and there is no need to alter the preliminary determinations made in Res. ALJ 176-3125.
12. Waiver of Comment Period
This is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to Section 311(g)(2), the otherwise applicable 30-day period for public review and comment is being waived.
13. Assignment of Proceeding
Izetta Jackson is the assigned Examiner in this proceeding.
Findings of Fact
1. Fahlen seeks authority to transfer ownership of the Weimar Water Company, which serves about 400 customers.
2. The prospective new owner, LaBudde, is an experienced water system operator and has operated the Weimar Water Company since October 2000.
3. Fahlen and LaBudde have violated Section 854(a) and the October 8, 2000 Stock Purchase Agreement is void.
4. The execution of a new Stock Purchase Agreement to replace and cancel the unauthorized transaction is in the public interest.
5. Ratepayers will benefit from the transfer because the prospective new owner is experienced in operating the water system and has been doing so successfully since October 2000.
6. The Commission's Water Division has determined that the purchase price of the three systems, $311,322, is the fair market value, as required by Section 2720.
7. There is no known opposition and there is no reason to delay granting the authority requested.
Conclusions of Law
1. Transfer of ownership of WWC meets the test of ratepayer indifference, in that customers will be unaffected or better off in terms of service, water quality, and continuity of service.
2. Pursuant to California Health and Safety Code, a change in ownership of a public water system shall, and a change in regulatory jurisdiction may, require application for a new operating permit from DHS.
3. Section 854(a) requires prior Commission authorization for the acquisition or control of public utility.
4. This is an uncontested matter in which the decision grants the relief requested.
5. Today's order should be made effective immediately.
ORDER
IT IS ORDERED that:
1. Frederic J. Fahlen is authorized pursuant to Public Utilities Code §§ 851-854 to sell and convey Sleepy Hollow Acres, Inc. doing business as Weimar Water Company (WWC) to Gerry O. LaBudde, as more fully described in Application 03-12-018 and exhibits attached to the Application.
2. Fahlen and LaBudde may execute a Stock Purchase Agreement in substantially the same form as set forth in the Application.
3. The Stock Purchase Agreement shall be effective prospectively and shall replace the document that was issued and executed without authorization from the Commission.
4. Applicants within 10 days of the transfer of ownership shall notify the Director of the Water Division in writing that the transfer has taken place, attaching copies of the transfer document.
5. Upon consummation of the transfer of ownership, Fahlen shall be relieved of public utility responsibility for the operation of the WWC water system.
6. WWC shall continue offering its current services and using the same name and authority after the transfer of ownership.
7. LaBudde is directed to comply with § 116525(a) of the Health and Safety Code, which states: "No person shall operate a public water system unless he or she firsts submits an application to the department and receives a permit as provided in this chapter. A change in ownership of a public water system shall require the submission of a new application."
8. Application 03-12-018 is closed.
This order is effective today.
Dated January 13, 2005, at San Francisco, California.
MICHAEL R. PEEVEY
President
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
