GSD Passes on Chance to Buy Benbow Water Company

The Garberville Sanitary District (GSD) board of directors last week learned that that the Benbow Water Company is for sale but did not jump at the chance to buy it.

At the board’s regular meeting on Tuesday, Feb. 23, district general manager Ralph Emerson reported that he had toured the Benbow Water Company after owner Win Benbow informed him that it was for sale.

Emerson briefly described the water company’s operation to the board.

“It is about eight to 10 hours a week. They use Redway’s operator, an operator from Redway, to run it and then the rest of the time he runs it. It’s all pretty automated off the computer or on site,” Emerson said. “And so it’s pretty efficient. It’s really technical but pretty simple to run, it looks like.”

Emerson reported that Benbow told him in early February that Chico-based Del Oro Water Company was buying the Benbow Water Company at the end of February. Emerson said that initially Benbow told him the price was around $550,000, which was the amount of service charges collected for one year. Emerson said he considered that price inexpensive if the system was running efficiently.

“I told him that I would talk to the board to see if we were interested in trying to work with him or work with Benbow Water as a neighboring district and perhaps in the future being able have their rates pay for us to do the operations with the staff we have, and then be able to bring them in, possibly, to the district somewhere in years to come,” Emerson said.

Emerson explained that when he told Benbow the district could not meet Benbow’s three-week deadline for an offer to buy, Benbow asked how long it would take the district to take the steps to purchase the Benbow Water Company.

Emerson told the board that in his legal and financial research about the offer, he found that as a district, GSD could not use their funds to purchase the Benbow Water Company, but found that district staff could do work for the owner.

District operations manager Ron Copenhafer responded to a comment from the public by confirming that the Garberville Sanitary District had purchased the privately owned Garberville Water Company. He commented that the customers of the district have to approve such purchases. Emerson said it would require a long process involving the Local Agency Formation Commission, annexation, and justification.

“It doesn’t appear to be a good move under the circumstances with district funds, to spend any time on it,” Emerson told the board. “Our time is spent within the district. I don’t know how we could do it, I don’t know that we have the time to do it, and I don’t know if it’s in the best interest of the district to do it. With that being said, there are some potential positives that I could see down the road, I just don’t know that we could do it in a timely manner.”

There was very little discussion among the board members about the district buying the Benbow Water Company. The board concurred with Emerson’s recommendation that he write a letter to Benbow declining the offer.

In an email response to questions after the meeting, Win Benbow wrote the sale price for the Benbow Water Company will be calculated at the time of closing based on established California Public Utilities Commission guidelines at something less than $700,000. He noted that the Benbow Water Company is required to allow neighboring public agencies the opportunity to purchase the company.

Del Oro Water Company operates 18 water districts throughout the state of California, including one in Ferndale, according to their website.

Other Business

District business manager Tina Stillwell presented the board with data on customer water usage over the last 12 years.

In addition, she presented several charts showing monthly water usage, water production, and water losses. The charts showed vast reduction in the loss of treated water since the replacement of the Alderpoint water storage tank that was completed in October.

The board discussed the district’s rate structure. The base rate for water and sewer is $95.21, with tier 1 usage charged per unit (748 gallons) for zero to five units, and an additional charge per unit for use above five units in tier 2.

Emerson said that if Gov. Jerry Brown declares another drought year, the district may consider adding a third tier for high water users to offset the loss of revenue that results from water conservation. He pointed out the district would need to go through the state-mandated Proposition 218 process that requires a rate study to add another tier to district rates. Emerson was directed by the board to research rate study consultants.

Board member Gary Wellborn asked questions about the operations manager’s monthly report for January that showed the biochemical oxygen demand (BOD) monthly average of 27 mg/L (milligrams per liter) higher than the state required limit of 15 mg/L. Copenhafer acknowledged that there had been an issue with the new sewer treatment system.

“We have determined that the ponds and wetlands are working fine. We have an issue at disinfection,” Copenhafer said. He said they have cleaned the disinfection system out. Emerson reported staff is working on the problem and they have added more testing per month to try to establish a database.

The State Water Resources Control board sets the limits and determines permit criteria, Emerson said.

Copenhafer gave the board a report on South Fork Eel River historical comparisons. He noted that California is in the worst 15-year drought since the 1150s and 1160s, and he said the drought is predicted to persist in 2016. Copenhafer presented a chart that showed annual rainfall, with low and high flows and the months they occurred in each year.

Copenhafer concluded, “In reviewing the 12 years of data that I have it is apparent to me that the drought does not seem to have impacted the South Fork of the Eel River very much. I believe this is because our rainfall has not changed much over the years.”