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LUCERNE, Calif. – An administrative law judge heard nearly two hours of testimony Friday night from Lucerne residents angry, frustrated and – in one woman’s case – choked with tears over a proposed water rate increase for the lakeside town.
The California Public Utilities Commission hosted the hearing, attended by more than 200 people, at the Lucerne Alpine Senior Center.
Statewide, California Water Service Co. is seeking $92.7 million in rate increases. In the Redwood Valley-Lucerne District, Cal Water is asking to raise rates by 58 percent or $839,300 in its “no phase-in” plan or by $1.29 million or nearly 69 percent over three years in its phased proposal.
Cal Water says an average user who now pays $62.85 a month for 500 cubic feet of water would see bills rise to $104.59 per month under the no phase-in plan and $124.22 under the phase-in.
The County Administrative Office, which submitted testimony for the rate proceeding, doesn’t agree with Cal Water’s estimate of an average user’s bill, pointing to high foreclosure rates and many vacation homes. The county’s estimate puts an average monthly bill for Lucerne at $158.77.
Cal Water officials told Lake County News on Friday that they are unable to separate out vacation homes, and they didn’t believe the county’s estimate was accurate.
For the small town, which over the past decade has seen several sizable rate increases in the midst of foreclosures and the recession, it’s a devastating scenario. Cal Water previously proposed a 273-percent rate increase proposal in 2005; residents were galvanized by that effort and fought it, although a 120-percent rate increase eventually was passed.
Administrative Law Judge Linda Rochester insisted that residents behave at the Friday evening hearing as if they were in a courtroom for the proceedings.
She is one of six administrative law judges fanning out over the state to handle 18 rate hearings for Lucerne’s various districts. The main assigned judge is Robert Mason, who will preside over formal hearings in San Francisco, she said.
Also present were Regina Costa of The Utility Reform Network – or TURN – and Ting Yuen of the CPUC’s Division of Ratepayer Advocates.
Darin Duncan, Cal Water’s rates manager, gave a brief overview of the rate case, which was filed last July.
“I know this is alarming,” Duncan said of the rate increase, which elicited laughter from the audience.
Primary drivers for the rate increase are infrastructure, including proposed replacement of 2,000 feet of pipeline, work on system water tanks and water quality enhancements at the district’s water plant, Duncan said.
Yuen said the Division of Ratepayer Advocates has as its statutory mission the work of advocating for the lowest possible rates consistent with safe and reliable service.
“Our recommendation is lower than the company’s,” said Yuen.
He said the division’s proposal was less than half of what Cal Water was seeking for plant investments. After the meeting, he told Lake County News that the division wasn’t proposing to reduce Cal Water’s request to meet government-required water quality standards.
Approximately 37 people testified at the meeting, with each speaker limited to two minutes.
Going to the microphone first was Supervisor Denise Rushing, who filed testimony on behalf of the town and who, along with the county, is a party of interest in the case.
People may seem hostile or angry, she said, but the overriding emotion is fear – with residents fearful that they may have to move from their homes and community, where the water bills already are high. Even if they do go, it’s not clear they can sell their homes, Rushing explained.
She said the town’s residents also are afraid that no one will hear them and respect their concerns. “Will they be able to stay in their homes and stay in the community, to put food on the able?”
Rushing said she understands the CPUC’s process, but she asked the commission to not just see this as another rate hearing. “I would like you to consider extraordinary action,” she said, asking for help for the impoverished town, which pays the second-highest rates among the corporation’s 34 districts.
Those who followed Rushing to speak to the judge challenged the rate hike proposal, citing rates far higher than in other districts, and calling Cal Water a monopoly that has continued to raise rates while people have had their wages and pensions cut.
Frank Parker, a member of the United Veterans Council leadership, said seniors and vets have had only small cost of living increases in retirement benefits, the most recent less than 2 percent.
“They make a profit. We lose. Things are going backwards here,” he said.
Dentist Doug Reams, who leads the recently formed Roaring Mouse Alliance that focuses on Lucerne’s water issues, said the group is advocating for eminent domain and having the system taken over by the county. He said the town is in crisis.
Lenny Matthews and others who spoke challenged the CPUC on whether or not it was unbiased, asking if the town could even get a fair hearing out of the state commission, the membership of which includes former utility employees.
Kurt McKelvey said the town’s rates have climbed by several hundred percent. Based on his calculations, which come from his reading of the public documents, McKelvey said Cal Water currently is taking in about $2 million from Lucerne each year.
“What can possibly justify us having to pay this much?” he asked.
Michael Santorelli told the commission that it’s as if Lucerne is being punished for not using enough water, with reduced water sales being one of the rate increase’s stated justifications.
He said that by his estimate fixed charges on bills are 67 percent of the overall cost for each customer. “It doesn’t make any difference if we conserve or not.”
Deputy County Administrative Officer Alan Flora recounted that the town was planned in the mid 1920s, but it never fulfilled the vision for it due to the Great Depression. However, in recent decades redevelopment made it possible to revisit the original vision for the town.
Since then, millions have been invested in improving lake access and public facilities, with the county also working to bring Marymount California University to the town, the county’s first four-year college.
However the burden of water costs is harming the county’s ability to bring more businesses to the town and hurting residents. He said the town was battling for its life.
Flora said a a longterm solution must be initiated, as the county doesn’t feel like the current model for water in Lucerne is providing a fair and sustainable service.
“The community of Lucerne is tired. It is worn down by the great recession,” he said.
Becky Ornellas, who along with husband Ken owns the town’s popular Foster’s Freeze restaurant, said the water rates are “killing us.”
She said the water tastes and smells terrible, yet their bills have been around $800 a month. “This is ridiculous. This is water.”
Lloyd Guintivano, deputy county counsel, said the county owns facilities and parks subject to the Cal Water system. The costs have hampered the county’s ability to bring new business to the area.
He said Lucerne families can’t afford more than $700 a year in additional water costs, and noted that previous increases imposed by the company have had the effect of driving business away from the Lucerne area.
Guintivano said the county is trying to eliminate blight and improve the town’s economic status, and Cal Water’s proposal won’t help.
Karen Kennedy said when she heard Cal Water was again coming to Lucerne over water rate increases, she started to think of parasites.
“I think we've reached the tipping point and Cal Water is killing Lucerne,” she said.
Archaeologist Dr. John Parker challenged the company’s proposal.
“This company does not provide a luxury or optional commodity,” but rather provides a commodity necessary for life, he said.
As the only water purveyor in Lucerne, Cal Water has a monopoly, and has made many rate increase requests, said Parker. Many of those requests have been amended, but none turned down.
Parker said the corporation recently paid out $26 million to investors, and suggested it needs to redirect profits to cover the needs of its systems. If it’s too onerous, he said the residents would be happy to purchase the system and turn it into a public utility.
The CPUC must maintain control over monopolies, said Parker. “Do not allow this rate increase.”
Clearlake resident Jim Steele, who sits on the Clearlake Oaks County Water District – which offers both water and sewer services to about 1,800 connections – said that district also had to do a rate increase, with rates going up to $32.36 a month for the first 1,500 gallons.
Like Lucerne, Clearlake Oaks also has 1960s-era infrastructure, takes water from the lake and is an older community. He said they did $100,000 in capital projects this year, have another $360,000 funded and stand to be $40,000 in the black, with depreciation fully funded, with combined water and sewer rates at $78 per month.
Michael Martinez, a 35-year Lucerne resident, said Cal Water knew the Lucerne system was old when it bought it. He accused the company of only doing emergency repairs and establishing a history of high maintenance costs, which he said have been used to justify the rate increases. “They’ve made millions.”
Those are the kinds of things the CPUC should address, Martinez said. “They need to clean their house and take care of things.”
Rochester thanked community members for coming, and said the meeting had been recorded and would be reported back to the commission. She told the group they were well informed about their water issues and how rates are made.
“There were ears here tonight that will work on your behalf, that heard everything you said,” Rochester added.
Email Elizabeth Larson at [email protected] . Follow her on Twitter, @ERLarson, or Lake County News, @LakeCoNews.
The risk of wildfires has already increased due this year’s dry conditions, and in preparation Cal Fire and the California National Guard are holding their annual fire aviation training.
The annual joint helicopter training that began Friday, April 12, and will go through Sunday, April 14, at the Cal Fire Academy in Ione in addition to Lake Pardee in Amador County.
“This training allows us to call upon the National Guard helicopters to assist us when California experiences extreme fire conditions,” said Chief Ken Pimlott, director of Cal Fire. “Last Summer, the Guard helped us battle several large wildfires.”
“This cooperative training is crucial to our fight against the imminent California wildfires,” said Maj. Gen. David S. Baldwin, adjutant general for the California National Guard. “Our longstanding partnership with Cal Fire and other state agencies has proved a winning combination; our interagency training translates into maximized preparedness and seamless cooperation when the fires inevitably hit.”
Each year, the two departments join forces to train military pilots on how to effectively make water drops on wildfires and how to safely integrate into a wildfire situations.
Cal Fire will be instructing National Guard helicopter pilots and crew members in basic incident management and firefighting operations so they can safely assist Cal Fire in battling massive wildfires.
The two departments have a longstanding cooperative relationship that has spanned over three decades.
Cal Fire holds similar trainings with the United States Marines and Navy.
“By training military pilots to fly fire missions, Cal Fire ensures that California has every available air resource when major firestorms occur,” said Pimlott.
Cal Fire has the largest aerial firefighting fleet in the world with over 50 aircraft including 11 UH-1H Super Huey helicopters.
What is vesting and why is vesting important? Vesting occurs when an interest becomes an enforceable legal right. Until vesting occurs, an interest is a mere expectancy. Let us examine vesting in the context of estate planning.
First, let us consider vesting in the context of a will.
Anyone named as a beneficiary in another’s will has a mere expectancy in receiving a future inheritance. Only when the person dies does the beneficiary’s rights under the will vest.
This can be changed, of course, by the beneficiary predeceasing the testator of the will, any creditor claims against the deceased testator’s estate, and perhaps even a will contest, as relevant. Until then, the named beneficiary has only a mere expectancy of a possible future inheritance.
The will can always be re-written to reduce or eliminate the beneficiary’s inheritance; the assets in question can be sold or spent; the beneficiary might die; and creditor claims might reduce the estate. Any and all of which can occur without the involvement or consent of the potential will beneficiary.
Next, let us consider the case where someone gifts real property subject to a reserved life estate. In this case, the transferee (recipient) named in the deed has an immediately vested right in a future interest.
Like the beneficiary named in the will, the transferee’s rights mature later when the transferor dies. But, unlike the will beneficiary, the transferee in the deed has a legal right that cannot be defeated by any changes in the wishes or fortunes of the transferor.
Even if the transferee is not alive when the transferor dies, the transferee’s estate (or living trust) owns what is called a “vested remainder interest” in the subject property.
Now let us consider a beneficiary of a living trust. So long as the living trust is revocable, the rights of any trust beneficiary is subject to change through amendment or revocation of the trust.
That said, unlike a will, a living trust commences while the settlor (person who established the trust) is still alive. While the settlor is alive, other people, such as the settlor’s family, may be allowed rights in the trust to benefit from trust distributions.
These rights are vested and enforceable agaist the trustee (legal owner). But so long as the trust is amendable or revocable these rights can be reduced or eliminated at the pleasure of the settlor(s). Once the living trust becomes irrevocable, at the death of the settlor(s), then the terms of the trust, including the rights of the beneficiary, are unalterable.
That does not, however, mean that the death beneficiaries of the trust are necessarily entitled to outright distributions. Some inheritances are held in further trust with the trustee given some or complete discretion over when, how much, and how to make distributions.
For example, a beneficiary of a fully discretionary special needs trust has no right whatsoever to demand distributions. But such a beneficiary does have a vested interest in the trust to enforce other rights, such as requesting an accounting.
Persons named as death beneficiaries in a living trust are in the same situation as a will beneficiary. That is, their rights only vest once the settlor(s) dies.
Until then, the settlor(s) can amend or revoke the living trust, can sell or spend the trust assets, and can lose the trust assets to creditors. Any and all of which events can reduce or eliminate the death beneficiary’s expectancy of an inheritance.
As the saying goes, “don’t count your chickens before your eggs have hatched.” That sums up the situation when it comes to mere expectancy of a future inheritance as opposed to a vested right.
Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 55 First St., Lakeport, California. Dennis can be reached by e-mail at
April is Earth Month, and the National Aeronautics and Space Administration is marking the occasion with a number of educational features and videos.
Take a minute to enjoy the view from orbit above, and for interactive features visit http://www.nasa.gov/externalflash/earthmonth2013/index.html .
Airborne imaging technology developed at NASA and transferred to the U.S. Department of Agriculture’s Forest Service (USFS) in 2012 is being tested to prepare for this year’s wildfire season in the western United States.
The Autonomous Modular Sensor (AMS) is a scanning spectrometer designed to help detect hot-spots, active fires, and smoldering and post-fire conditions.
Scientists at NASA’s Ames Research Center in Moffett Field, Calif., and USFS engineers installed it on a Cessna Citation aircraft that belongs to the Forest Service.
The USFS plans to use it in operational fire imaging and measurement.
The western United States is expected to have continued droughts this year resulting in increased potential for fire outbreaks, according to the National Interagency Fire Center (NIFC) in Boise, Idaho.
To help mitigate fire danger, NASA researchers and USFS firefighters are collaborating to improve fire management capabilities.
“NASA technologies in the fields of data communication, aircraft systems, advanced sensing systems and real-time information processing finally have coalesced into the operational use that supports national needs in wildfire management,” said Vincent Ambrosia, principal investigator of the Wildfire Research and Applications Partnership project and a senior research scientist at Ames and California State University, Monterey Bay.
Developed by NASA’s Airborne Sciences Program, the Autonomous Modular Sensor acquires high-resolution imagery of the Earth’s features from its vantage point aboard research aircraft.
The sensor transmits nearly real-time data to ground disaster management investigators for analysis.
The sensor has been modified to fly on various crewed and uncrewed platforms, including NASA’s Ikhana remotely piloted aircraft, a Predator-B modified to conduct airborne research.
Between 2006 and 2010 the AMS flew on the Ikhana and NASA’s B-200 King Air to demonstrate sensor capabilities, support national and state emergency requests for wildfire data, and ensure its operational readiness.
Data gathered during those flights was used to develop and test algorithms for scientific programs that monitor changes in environmental conditions, assess global change and respond to natural disasters.
The Autonomous Modular Sensor will be operated daily over wildfires throughout the United States, providing an unprecedented amount of data to the fire research and applications communities.
USFS also will use the sensor to support other agency objectives, such as vegetation inventory analysis and water and river mapping.
“I see tremendous opportunity for my agency and other land management agencies to benefit from the application of NASA-developed technology,” said Everett Hinkley, national remote sensing program manager with USFS in Arlington, Va. “The AMS expands our current capabilities and offers efficiencies in a number of remote-sensing applications including fire, post-fire and forest health applications.”
NASA will continue to support the Forest Service’s use of the Autonomous Modular Sensor. Researchers with NASA and other agencies will have access to the data and can request mission use through partnerships.
For more information about Autonomous Modular Sensor, visit http://airbornescience.nasa.gov/instrument/AMS .
LUCERNE, Calif. – Lucerne residents are urged to attend a Friday evening meeting on a proposal to significantly raise water rates in the town over the next several years.
The California Public Utilities Commission will host the meeting on California Water Service Co.’s proposed rate increases beginning at 6 p.m. Friday, April 12, at the Lucerne Alpine Senior Center, 3985 Country Club Drive.
Cal Water is proposing rate increases of $818,000, or 57 percent in January 2014; and of $48,700, or 2.2 percent, in January 2015; followed by a decrease of $27,400, or -1.2 percent, in January 2016 in the Redwood Valley-Lucerne Service Area.
An administrative law judge will preside over the hearing in order to take community comment on the proposed rate hikes.
Additional details about the proposed increases can be found at www.calwater.com/rates/grc or at https://www.calwater.com/bill_inserts/luc/20130325_Notice_of_public_participation_hearing_-_Lucerne.pdf .
Cal Water customers who are unable to attend the hearing or who wish to file comments directly with the Public Advisor’s Office can send an email to