20160506Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: MAY 6, 2016

SUBJECT: APPLICATION OF PACKSADDLE WATER SYSTEMS, INC. FOR A NAME
CHANGE UNDER NEW OWNERSHIP, CASE NO. PKS-W-15-01

On November 30, 2015, the Commission received an Application from Packsaddle
Water Systems, Inc. (“Packsaddle” or “Company”) seeking Commission approval of a name change
from Packsaddle Estates Water Corporation.
APPLICATION
Packsaddle requests that the Commission approve its purchase of a small water company
formerly known as Packsaddle Estates Water Corporation. Packsaddle states that it is a new non-
profit corporation. Packsaddle estimates that the former water company, Packsaddle Estates Water
Corporation, operated the water system for the subdivision named Packsaddle Creek Estates for
nearly 40 years. The subdivision is located in Teton County, Idaho.
Packsaddle explained that the previous small water company was a for-profit corporation
run by a single person, Rea Fulmer. According to the Company, the for-profit corporation did not
permit the subdivision’s water customers a vote or input concerning the operation of the water
system.
Packsaddle’s Application includes a copy of its Articles of Incorporation filed with the
Idaho Secretary of State. The Company states that it has no By-Laws. The Company alleges that
each customer of the new water company is a voting member and the Company has a four-member
Board of Directors serving without compensation. Officers also serve without compensation.
Packsaddle explained that the formation of the new corporation was necessary because
the former owner, Rea Fulmer, is in very poor health and is unable to attend to the maintenance and
DECISION MEMORANDUM 2
operation of the water system. Ms./Mrs. Fulmer requested that residents assume those
responsibilities. Packsaddle states that the new corporation serves the same functions as a
homeowners association (“HOA”).
The Company included a copy of the Purchase/Sales Agreement and Quitclaim Deed
transferring the pump house and the land upon which it is situated to Packsaddle. According to the
Company, it paid nothing for the assets of the previous owner, as the previous operator was
medically unable to operate the system and wanted to be relieved of the responsibilities. Packsaddle
claims that 100% of all fees collected from subdivision customers will be used for the operation and
maintenance of the water system. The Company believes that this will allow for the growth of a
fund for emergencies and capital improvements at the rate of approximately $500.00 per month.
Packsaddle attached a copy of a letter it sent to all customers apprising them of the
purchase of the water company by the new non-profit corporation. Packsaddle states that it is aware
of all IDEQ environmental requirements and has access to individuals with the requisite knowledge
and expertise to maintain compliance with said requirements. The Company is also aware that the
accounting for the water system is in accordance with the Commission’s Uniform System of
Accounts and must be maintained on a stand-alone basis separate from any other business activities
of the buyer.
Packsaddle believes that because it functions as a HOA, in all significant respects, and is
a “mutual non-profit organization represented by board members in a democratically-run
corporation,” the Commission may approve its purchase of the water system without a CPCN
transfer.
COMMISSION DECISION
Does the Commission wish to process Packsaddle’s Application for Commission
approval of a name change associated with the sale and purchase of the water system through
Modified Procedure with a 21-day comment deadline?

M:PKS-W-15-01_np