CLWSC assets purchased by SJW Corporation

by Crystal Gottfried, Staff Writer

San Jose Water Corporation announced that the purchase of the assets of Canyon Lake Water Supply Corporation by San Jose Water-Texas closed last week.

Canyon Lake Water Service Company, the newly re-named subsidiary of SJW Corporation, in California, took up the reins from the former member-owned water supply company that serves about 20,000 people, with 7,000 metered connections in an approximate service area covering 390 square miles around Canyon Lake, Western Comal County and Southeaster Blanco County.

Transition Team Leader Tom Victorine of SJW has been working with General Manager Dale Yates and local employees of CLWSC to document the system components and create a drawing of the entire water supply system prior to the closing on May 31.

"It was more complicated than we expected, but now we understand how the system is put together," Victorine said in an interview at Canyon Lake last Friday. "The general manager knew every aspect of this water supply system."

Victorine said that there are some changes taking place behind the scenes as the new Canyon Lake Water Service Company emerges..

"The employees will remain the same but they will be changing to a different and better health coverage that includes dental," he said. "The salaries will remain about the same."

The new CLSWC will be operating under a new tariff since the closing. The Texas Commission on Environmental Quality has asked the company to delete some initial fees for water service that were charged by the previous company. However, the water commodity remains the same and the monthly charge will be the same.

Victorine seems proud of the growth that CLWSC has already experienced and looks forward to the changes and upgrades that are planned for the water supply system.

"CLWSC will commit about $7.5 million plus another $1 million in the first year to capital improvements like new pumps, new water mains, upgrades to the filter plants, and water treatment capacity expansions at the Park Shores and Triple Peak surface water treatment plants," he said. "Later this year, there will no longer be any problems during peak summer usage periods and we will build in the capacity for growth for the next twenty years at the same time."

The new water service company will continue to commit about $1 million a year after that to upgrade and improve the water delivery system.

Victorine said that as of last Friday, CLWSC had 7,122 connections.

"We are growing with the addition of about 25 houses a week," he said. "Canyon Lake is growing even faster than San Jose!"

SJW is an investor-owned water service company whose stock is traded on the New York Stock Exchange (NYSE symbol: SJW). SJW also owns and operates San Jose Water Company which is one of the largest and technologically sophisticated water systems in the United States.

According to Victorine, SJW was attracted to Canyon Lake because of the growth of population in the area as well as the job market growth in San Antonio and Austin.

"People growth is the engine for business growth," he said.

The new CLWSC will incorporate San Jose Water Company's strategy for achieving customer service and operating excellence through innovation and the effective use of technology.

Improvements to the former water supply's customer information system and computer technology have already started.

CLWSC's facility records will be preserved and updated into a new Geographical Information System and a computerized maintenance management system will help the company efficiently plan for complex repairs as well as to improve maintenance work scheduling.

Field staff will use mobile data terminals to remotely monitor the water system in the near future.

Other plans include performing detailed hydraulic modeling and analyses of the water distribution system to determine the proper water main size for replacement projects and planned expansions and the employee base will be expanded.

Members of Canyon Lake Water Supply Corporation approved the sale of the locally-owned company to SJWTX, Inc., a Texas-based subsidiary of San Jose Water, Inc. of California last November and also approved a change in the by-laws that would allow a distribution of $3.2 million of the purchase price proceeds to the membership.

Victorine said that the average distribution amount would be around $450, with larger water users receiving a bit more.

The money has been wire transferred to former board President Larry Ratliff, and a computer file has been run for submission to an auditor for review. When the auditor gives his approval, another company will handle the mail-out of the distribution to the former members.

The purchase agreement also required that SJWTX would retire the former water supply company's $20 million indebtedness and that the new CLWSC would not seek a water rate increase for at least two years.

San Jose Water Company's CEO Rich Roth congratulated the employees at CLWSC last week shortly after the closing took place. In an e-mailed message, he extended his thanks for their commitment and professionalism and said that "we are lucky to inherit such a dedicated staff."

Victorine echoed those sentiments and is excited about the future for the new CLWSC.

"San Jose Water Company is delighted to be in Texas and we think that this is a good step for the area and the company," he said. "We just love the people here."

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