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‘Where’s the Big Bad Wolf?’

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Posted: Thursday, January 19, 2012 8:55 am

At least one of the Rimforest Water System customers who attended the Tuesday workshop about its possible takeover by the Lake Arrowhead Community Services District left disappointed.

"I came expecting some devious action but I can't see any," was the comment made by Cheryl Pirih at the end of the meeting.

Jack Hoagland, LACSD general manager, told the small group assembled in the library at Rim High School that the workshop was prompted by a phone call he received from the City of Big Bear Lake Department of Water and Power.

"They asked if we would be interested in operating Rimforest Water," Hoagland said. What's driving Big Bear, he added, is a municipal service review being done of that agency by LAFCO (the San Bernardino Local Agency Formation Commission).

LAFCO, Hoagland said, doesn't like Big Bear servicing 300 customers 30 miles away in another agency's service area.

That other agency is LACSD, which already provides wastewater service to the Rimforest customers.

"We are trying to do our due diligence to see if there is a way to make this work," Hoagland said. To work, he added, the transfer has to be cost neutral.

When some wondered why Rimforest was being serviced by Big Bear, Hoagland said when Big Bear bought the Southern California Water Company about 15 years ago, Rimforest was part of the package.

The biggest obstacle to effecting the transfer in a cost-neutral way appears to be the outstanding debt by the Rimforest customers. The smaller of two amounts-$71,000-is owed to the Department of Water Resources and carries an interest rate of 2.995 percent. It is due in October 2015.

Because of this loan's lower interest rate, it is not of great concern to Hoagland.

It is the other loan-$417,409 in 25-year bonds-that may be the impediment to the transfer of the Rimforest folks to LACSD. That loan carries an interest rate of 6 percent.

Were LACSD to assume responsibility for Rimforest Water, which would remain a separate entity, Hoagland would like to repay Big Bear. The problem, as he sees it, is that 6-percent interest rate.

The bonds, he said, cannot be called, which means Big Bear would have to continue repaying them until the due date of April 2022. He doubts they would be able to invest the money paid to them by LACSD and cover the 6-percent rate, which would result in their losing money.


Should LACSD take over servicing of the water side of Rimforest Water, they would have to install new meters for the 300 customers. The meters Big Bear installed in Rimforest about 13 years ago do not have the necessary wiring to be connected to LACSD's automated meter reading system.

Because LACSD no longer employs meter readers, the change would be necessary, Hoagland explained. And the Rimforest customers would gain the leak detection feature that has proven so beneficial to LACSD's ratepayers.

With those new meters, the Rimforest customers would also move from bimonthly to monthly billing. The rates would stay the same, with customers being billed at a rate of $4.83 per unit of water used.

"There will be no tiered rates?" was the question from Carol Pedder.

No, was Hoagland's answer. "You are paying a flat rate for your CLAWA (Crestline-Lake Arrowhead Water Agency) water. LACSD has tiers because the different sources of water cost different amounts. Your water costs one price."

Hoagland also raised the possibility of creating an advisory committee of Rimforest ratepayers to monitor the operations of Rimforest Water under the umbrella of LACSD.

It was that possibility that intrigued Butch Baumann. "I think it's interesting that we could control what happens. We have no input to Big Bear at all. That would be worth something. We've never had this opportunity before."

Rimforest resident Rick Miller told Hoagland he came to the meeting very skeptical. "Why would you want us?" he asked. "What's in it for you? Where's the Big Bad Wolf in all this?"

"The only thing you'd notice," Hoagland said, "is a monthly bill and you'd send your payment to someone else."

You also, he added, would get service, when needed, a little more quickly.

"I don't have a recommendation I'm going to put to my board," Hoagland told the Rimforest ratepayers. He had attended the Big Bear agency's board meeting that same morning.

"This might not even rise to the level of an annoyance to them," Hoagland said. "I don't see a huge hue and cry to make it happen.

"I got the sense," he added, "that if it weren't for LAFCO poking them, this would never have come up.

"What I'm hearing from you," Hoagland said at the workshop, "is this is interesting. And you're wondering what is going to happen to your bills.

"If this is going to cost anyone anything, we can't go forward," Hoagland said.

The LACSD general manager promised to keep the Rimforest folks informed. "We're waiting on Big Bear to get back to us with alternatives or suggestions."


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