TUD inks pact with H20 co.

By Pam Orebaugh March 19, 2013 08:04 am

The Tuolumne Utilities District is trying to collect on a wholesale water company that has racked up a six-figure debt in unpaid fees.

The utility district has agreed to a settlement and payment plan through which the Sonora Water Company will pay off $106,585.49 in past-due water charges with interest. The small company purchases water from TUD at a wholesale rate to serve residents between Sonora and Jamestown in Mill VIlla Estates, Mill Villa Manor and other subdivisions.

According to district leadership, collecting the debt is more complicated than with a typical customer, where TUD could place a lien on a property for long-term failure to pay. In this case, property consists of the water company infrastructure such as a tank and distribution system that is worth less than the debt owed. Also, if the district came into ownership of the infrastructure, TUD would be on the hook for improvements.

“We want to get something,” said Steve Sheffield, the district’s director of finance, last week. “If we can kickstart (the company) into making payments, then great.”

And TUD General Manager Pete Kampa said shutting off service would be more complicated than a typical case. The water company, not the residents, is the TUD customer, and the district can’t contact or collect any of the debt for the people using the water. Kampa said a shutdown to that many customers would require other forces like the county health department to get involved.

“The goal of this is to get the money,” he said last week, later adding that turning off the water service would be “an extreme pain. … The whole thing is very difficult.”

But some on the TUD Board of Directors want more assurance that the company will make good on the agreement, which was barely approved last week with a 3-2 vote. Directors Jim Grinnell and Kent Johnson both were unhappy with the agreement and wanted to see better enforcement measures added.

“At some point you say ‘That’s enough,’ ” Johnson said. “I’m saying that’s enough.”

This is not the first time TUD and Sonora Water Co. have been at odds over payment. The water company is still paying off $100,000 on a settlement of more than $130,000 in unpaid connection fees that resulted in a lawsuit between the two utilities.

A representative with Sonora Water Co. would not comment on the agreement when reached Friday by The Union Democrat.