Agenda - 05-22-1989 - Laserfiche WebLink

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6. ARE THERE CASES WHERE THE COMMISSION HAS ENCOURAGED CITIES OR - COUNTIES TO PARALLEL.A SYSTEM? More often than not the Commission would encourage the paralleling in that many of the systems being paralleled may not be state approved,and may not be providing adequate service. The Comission has had to appoint emergency operators for systems which have been effec- tively abandoned by their owners.Generally when the systems are abandoned they are in a run- down state and it may not be possible or economically feasible to upgrade the system.The com- mission has sought assistance from generally county water systems in these cases.Some coun- ties have been responsive and some have not. *Another problem that often arises under an emergency operator is that the customers must be assessed for the cost of upgrading.If it costs$400 to$500 per customer and it is a low in- come area we are often up against a brick wall. 7. IS THERE A WAY TO KEEP THESE SUB—STANDARD SYSTEMS FROM BEING BUILT? - Often the systems are built and serving customers before the State knows about them. It would be very helpful if the County Building Inspectors would not issue building permits until all necessary tune approvals of the water and sewer system were obtained. Currently many lending agencies will not approve home loans unless the state approvals have been obntained and that has been helpful. Fewer"renegade"systems are now being built. R. ARE THESE COMPANIES REQUIRED TO BE BONDED? In order to try to deal with this situation we recently got Bonding Legislation passed requiring all companies who apply for a franchise after October 1, 1987,to post band.The amount will be a minimum of$10,000 per system with a maximum of 5200,000 per company. All or a portion of the bond may be forfeited upon appointment of an emergency operator in order to make needed repairs to the system without assessing the customers. We are currently considering other solutions to the small water company problem and welcome input from any interested party. 9. ARE THERE CASES WHERE THE COMMISSION WOULD LIKELY DISCOURAGE THE PARALLELING OF A FRANCHISED SYSTEM? In many cases I would encourage the city or county to at least approach the privately owned utility about the possibility of buying their distribution system.Even if the system could not be used a token payment for the distribution system maybe in the best interest of the city or county. the customers and the utility company. On occasion the Commission has encouraged a private company to take over and upgrade a system.A short time after the system was upgraded the county paralleled it and the utility com- pany had no chance to get its money back.Good luck to the Commission if it wants this com- pany to take over and upgrade another sub-standard system in that county. Another problem which arises is that during constructiion the city or county will often cut the existing water lines and the private utility(already mad)will not make repairs.This can result in outages to the customers.It would probably be better if the city or county owned the system being paralleled so that it would be cutting and repairing its own lines during construction. If the utility company wants more for its system than it is worth to the city or county then there will be no choice.I would however recommend at least approaching the private utility up front. 10. WHAT ARE TYPICAL. WATER AND SEWER RATES FOR PRIVATELY OWNED LTILITIES? A typical water rare for a residential customer using 6.000 gallons per month may be$15 and the sewer rate may be$18. The rates vary from system to system based on size of the utility,operating expenses and investment. 11. HOW ARE RATES SET? A utility company under the jurisdiction of the Commission is entitled to have rates which will allow it to cover all of its reasonable operating expenses plus a return.In order to justify its rates it must keep good records of its expenses and investment and submit this information for a 12 month period in the form of a rate increase application. The Public Staff then audits the records of the company and performs a service investigation and presems hs lindmgs and recotrunendations to the Commission in a Public Hearing as previously mentioned.