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News: 05/15/2019

Community meeting on water service yields results

Costs and confusion raised hackles at firehouse event last month



The Kenwood Village Water Company (KVWC) is a small water company serving 296 customers, including 29 homes that burned up in the devastating fires that ripped through Kenwood, Glen Ellen, Bennett Valley and Santa Rosa, eventually destroying more than 5,000 homes in October of 2017. Today 17 of those KVWC customers are in the process of rebuilding their homes, and many have expressed shock and dismay at the bills for upgrading their previous water capacity to meet new county fire codes, in addition to the reconnection fees.

Kenwood Fire Chief Daren Bellach and First District Supervisor Susan Gorin sponsored an April 29 community meeting to address these issues, and KVWC owner Jim Downey was on hand to hear from his customers and respond to their questions.

The community meeting yielded positive results, with KVWC waiving the reconnect fees for all its clients affected by the fire, addressing issues of water pressure, and the cost of up-sizing the feeder lines and meters to meet new fire codes.

Bellach announced that an agreement had been reached with the water company concerning access to emergency service valves during crises, a problem brought to light by the inability of water company employees to get to the alternate water supply valve after electricity failed during the firestorm. The fire department and water company will keep each other informed about policies and personnel, and exchange active contact numbers annually.

KVWC employees checked out a complaint of low water pressure from Brown Street residents. The service pressure was found to be adequate and KVWC suggested the owners check the rest of their water systems to source any pressure problems.

Recurring service fees are ongoing sore points for fire victims, but there is no getting around them.

After the fire, the water company sent out letters to fire victims saying it would waive reconnection and service fees for one year, until Dec. 22, 2018.

“The problem with that was the one year limit,” Downey said later. “That was a judgment call on my part. In retrospect, it was too short. We now realize that the waiver period was too short as a practical matter.” He officially announced the company’s new policy in a letter to Treehaven Lane resident Gail Chapin, retracting a prior request for full payment of close to $6,000 for reconnection and upgrade fees, though noting that she will still have to pay for the upgrade costs. The difference amounts to several thousand dollars.

Sonoma County now requires all new homes – replacement or not – to include sprinkler systems and enough water pressure to serve them, which can vary with the size of the home. Since the diameter of most of the existing lines to the lost homes are too small to meet new requirements, upgrades have to be made before permits are issued. And there lies a big point of contention for the customers.

Customers don’t feel that the upgrades are optional, but from KVWC’s viewpoint, any “upgrade” is discretionary because the company isn’t requiring it. Downey explained that the water company will provide whatever service a customer wants. Why they ask for it is not in the company’s purview.

State law is on his side. Rami Kahlon, chief water regulator and director of the Division of Water and Audits for the California Public Utilities Commission (CPUC) District 3, located in San Francisco, toured Kenwood’s fire damaged areas with Downey. “Kenwood is one of my 100 or so regulated utilities,” he said. California has over 400 independent and mutual water companies, all subject to CPUC rules and regulations under California state law.

“[The water company] can charge for service connections,” Kahlon said. “If a customer has to upgrade … it’s being made at request of the customer, then [the water company] can charge to upgrade using their own contractor.” That can run as high as $3,500. Once done, the upgraded services are owned by the water company.

“We have a decision specifically on this that says that the customer is responsible for funding the improvement if the reason is fire protection,” Downey said, citing CPUC Tariff Rule 15(b)(3).

Additionally, Treehaven Court resident Susan Miron and others were irked at the $59.57 monthly service fees that are charged, even though they are not using any water while rebuilding, just because their properties are connected to the KVWC system.

Again, the law is in KVWC’s favor. All water company service charges are reviewed and set under CPUC rate setting rules, Kahlon said. KVWC’s last rate increase was made on Aug. 23, 2018, after legal public notice. Letters explaining the proposed increase were sent to all customers at the time, giving them 20 days to protest. No protests were received. [NOTE: The Kenwood Press is not a legally approved paper of record for these kinds of public notices since it is only published twice a month. – Ed.]

As defined by law, the “service charge” applies to all customers regardless of how much water they use. The service charge recovers fixed expenses and is commonly used by all water utilities to cover a portion of their costs to operate and maintain water systems.

KVWC is a Class D independent water company – the smallest of California’s four ratings.

“Small companies with fewer than 500 [customers] cannot deal with revenue fluctuations,” Kahlon said. “The bigger guys get 30 percent back, though that is being raised.” Smaller companies recover 100 percent of the fixed costs through the service charges. “These are costs that are not dependent on the volume of water sold,” he continued. “The rate for Kenwood is the sum of operating expenses, purchased water from Sonoma County, pumping costs, employee labor, transportation, salaries, benefits, etc. We have a formulaic process to figure it out.”

A check of several water bills in the village shows that everyone is charged the same amount: $59.57 a month for the 5/8-inch and 3/4-inch meter connections. Most new connections will have to be at least one inch to meet county sprinkler codes, Downey surmised. The one-inch pipe and meter combo service charge is $148.92 a month.



If you are unhappy with your water company, you can file a complaint online at the CPUC’s website, or call to talk about it.
Website: consumers.cpuc.ca.gov/CABUtilityComplaint.aspx
Phone number: 1-800-649-7570


Email: jay@kenwoodpress.com

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