20030721Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:JULY 21, 2003
SUBJECT:CASE NO. BIT-03-1 (Bitterroot Water)
SALE/PURCHASE OF WATER UTILITY
On June 17, 2003, documentation was filed with the Idaho Public Utilities
Commission (Commission) pertaining to the sale/purchase of the Bitterroot Water Company.
The Bitterroot Water Company is a regulated public utility maintaining and operating a water
system and water supply and providing water service to approximately 101 customers in
Kootenai County, Idaho in an area more particularly described as Silver Meadow subdivision
located in Township 53 North, Range 03 West, Sections 20 and 29, Boise-Meridian, Kootenai
County, Idaho, as recorded in the Kootenai County Recorder Office, Record No. 1375350.
Certificate of Public Convenience and Necessity No. 319 was issued to Bitterroot Water
Company, Inc. by the Commission on December 14, 1995. Reference Case No. GNR-95-
Order No. 26268.
As reflected in an amended Purchase Agreement filed with the Commission on July
2003 the Seller, Bruce Burnett, agrees to sell Kenneth and Cathy Rickel of Kootenai County,
Idaho, hereinafter called Purchasers, the Company stock of Bitterroot Water Company, Inc.
consisting of 100 000 shares of stock for the purchase price of $50 000. Pursuant to terms of
payment, Seller acknowledges receipt of $25 000 for 000 shares of stock. The balance of the
purchase price for the remaining 000 shares is payable at 8% per annum commencing June 1
2003. Payments shall be $303.32 per month with the first payment being due on the 15th day of
the month following Commission approval of this stock transfer. Payments will be due month to
DECISION MEMORANDUM
month until the balance is paid in full. The unpaid balance is secured by a promissory note.
Seller will retain possession of the balance of the shares until the note is paid.
The addresses of Seller and Purchasers are:
Seller: Bruce Burnett 4240 Old Seward Highway, Suite 13, Anchorage, AK 99503
Purchasers: Kenneth and Kathy Rickel, PO Box 1261 , Hayden Lake, ill 83835
The SalelPurchase Agreement recites that the Certificate for Bitterroot Water
Company, Inc. will not change as a result of this transaction.
As reflected in the filings, the attorney for the Purchasers states that while this is not
to be a consolidation of water companies, his clients, the Rickels, currently own the contiguous
water company that bears their name. (Rickel Water Company - Commission Certificate No.
324.) Both parties to the sale/purchase agree that it only makes economies of scale and logistical
sense that the companies be owned by local people. Further, it is recited that the companies
share a communal reservoir and some infrastructure.
The Rickels intend to leave the existing water service fees for Bitterroot "as is" for
the near future, but based on economics, contend that it is possible that an increase may be
needed. There are reportedly a number of hook ups which may be losing water due to faulty
back-flow prevention valves which need to be fixed and/or replaced. This repair, the Rickels
contend, will potentially stop the water shortages which have been occurring in the Bitterroot
system. The Rickels contend also that there is no question that the Company will need to have
another well and reservoir for the expansion of housing north of the Company s present customer
base.
COMMISSION DECISION
Staff recommends that the Application for sale/purchase of Bitterroot Water
Company stock be processed pursuant to Modified Procedure. Does the Commission agree with
Staff's proposed procedure?
Scott D. Woodbury
bls/M: BITWO3 0 I
DECISION MEMORANDUM