8. Public Notification

The Application states that Crown Pointe Estates and DeFalco and Werb accept joint responsibility for informing the community of customers about this filing. Yerba Buena is keeping the same postal address, the same 24-hour emergency telephone service, and the same location where the accounting, billing, and computer requirements are processed.

9. 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 DeFalco and Werb be granted authorization to sell all of the shares of common stock outstanding of Yerba Buena to Crown Pointe Estates.

3. That Crown Pointe Estates be authorized to assume the water utility service to the customers of Yerba Buena.

4. That Yerba Buena remains responsible for payment of utility user's fees to the Commission.

5. That Crown Pointe Estates 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 Crown Pointe Estates' acquisition of Yerba Buena, Crown Pointe Estates 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.

10. Categorization and Need for Hearings

In Resolution (Res.) ALJ 176-3146 dated January 27, 2005, 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 176-3146.

11. 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.

12. Assignment of Proceeding

Kevin P. Coughlan is the assigned Examiner in this proceeding.

Findings of Fact

1. DeFalco and Werb seek authority to transfer ownership of the Yerba Buena Water Company, which serves about 226 customers.

2. The prospective new owner, Crown Pointe Estates is financially capable and is retaining the services of Berry, who is an experienced water system operator that managed and operated Yerba Buena for 23 years.

3. The transaction is not contrary to the public interest.

4. The Commission does not by this decision determine that the value of the company's stock or property presented herein are necessary or reasonable for ratemaking purposes nor are indicative of amounts to be included in proceedings for the determination of just and reasonable rates. Yerba Buena's depreciated rate base will be the Commission's basis for ratemaking and the cost paid for the system in excess of rate base will not be considered in setting rates.

5. Yerba Buena's corporate status remains unchanged with the stock transfer authorized.

6. There is no known opposition and there is no reason to delay granting the authority requested.

Conclusions of Law

1. The transfer of ownership of Yerba Buena meets the Standards of Legal Review in that customers will be unaffected or better off in terms of service, water quality, and continuity of service.

2. No protests have been received.

3. A public hearing is not necessary.

4. 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.

5. Section 854(a) requires prior Commission authorization for the acquisition or control of a public utility.

6. This is an uncontested matter in which the decision grants the relief requested.

7. Today's order should be made effective immediately.

ORDER

IT IS ORDERED that:

1. The Application of John A. DeFalco and Neil N. Werb to transfer all the shares of common stock outstanding in Yerba Buena Water Company to Crown Pointe Estates at Malibu, LLC, as described in Application 05-01-014 and exhibits attached to the Application is granted.

2. 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, DeFalco and Werb shall be relieved of public utility responsibility for the operation of the Yerba Buena water system.

6. Yerba Buena shall continue offering its current services and using the same name and authority after the transfer of ownership.

7. Crown Pointe Estates 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 first 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 05-01-014 is closed.

This order is effective today.

Dated March 17, 2005, at San Francisco, California.

MICHAEL R. PEEVEY

President

GEOFFREY F. BROWN

SUSAN P. KENNEDY

DIAN M. GRUENEICH

Commissioners