This letter is a response to Doug Reams, DDS, letter to the editor titled “The mouse that roared.”
If the mouse is going to “roar” he should get his facts straight. He said that “Bob and Nadine Strauss sold Lucerne Water Company to the California Water Service Co. (Cal Water) for millions of dollars. Not true.
The truth begins when Stan Korth purchased the Lucerne Water Company in 1962. It was totally run down, barely surviving with approximately 400 customers.
Water rates were way low and the water quality was poor. Stan did what he could, but had little money to improve the system.
Nadine starting working as office manager in 1970 and I joined the team as plant manager in 1972.
We began purchasing stock in the company in 1975. In 1990 we were the sole-owners and operated Lucerne Water Company together for 27 years.
Water rates were based on a small operating budget and a return on our investment in the company.
We were allowed to receive up to 10-percent. Any profit that was made was always reinvested into the company. We kept our wages low, below poverty level, as is reflected by the $1,000 monthly Social Security check we now receive. Most people I talk to who have worked all their lives get quite a bit more than this. We did this to keep the water rates low.
We did everything possible to keep expenses down. I operated the plant, did all the repairs, installed new services, read meters and ran the backhoe. Nadine did all the office work including the monthly billing. Because we did everything ourselves we were able to control spending. After seven years of working alone, and as our customer base increased, we finally hired a helper. Many years later a second plant operator and an office assistant were hired as we had grown to more than 1,200 customers.
We decided to sell because the state and federal government formulated new standards for the water and told us what they wanted and how and when we were going to do it. Those entities were taking the control and operations out of our hands, but failed to tell us how we were supposed to pay for all the changes they wanted. I was spending more time filling out paperwork than in the field getting things done.
I could see what the future would hold and I wanted out while I could still look my customers in their eyes. It was obvious that the water rates would be going up.
The sale of a public utility is 100-percent regulated by the Public Utilities Commission (PUC). It decides the purchase price based on the owner”s investment in the company. We had been investing money into the Lucerne Water Company for 27 years. Stan Korth had also invested for 10 years plus the original purchase price. The PUC set the price at $750,000.
It seemed low compared to all the work of two people, 24 hours a day, 365 days a year for 27 years.
This is about the same amount as a nice house was selling for at that time. This amount was the only amount the PUC would accept for rate-making purposes, passed down from us to the new owners. No other amount was allowed.
Dominguez Water Company owned several small water companies and one large company in Long Beach. It seemed to have a value system similar to ours. That company purchased Lucerne Water Company in 2000 and ran it for two years much the same way as we did.
Dominguez then sold to California Water Service. We had nothing to do with that sale or anything else that happened to the water company after the sale. And we did not make millions of dollars as the “mouse” stated.
When we sold the Lucerne Water Company we had the lowest water rates for agencies using surface water in Lake County. The regulations are set by the federal government, passed down to the state, and then passed down to the consumer.
This is why your water bill is outrageous. This type of thinking has the federal government $16 trillion in debt.
Cal Water is very good at using these mandates to its financial advantage. I don”t like it either. I think it”s wrong and unfair, but I have nothing to do with it. Doug Reams was way out of line attacking us in his letter.
Bob Strauss
Former owner,
Lucerne Water Company
Lucerne
