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http://www.omniture.com --> Email Story to a Friend July 2, 2006 Private water offers residents buy-ins By JENNIFER STRANGE for the Mail Tribune A privately owned water system being built in Shady Cove to service several new residential developments will eventually be offered to the rest of the town, builders say. "It will be available on an on-demand basis," said Ron Boehm, owner of Grey Oaks Development Inc. and Two Pines Smokehouse and general manager of Shady Cove Waterworks, LLC, all in Shady Cove. The project initially will provide water for new homes built by a group of developers that Boehm has been meeting with. "They will receive the water first because they are paying for it," said Boehm. Private residences along the initial system also will be able to buy into it, said Boehm. Waterworks estimates a minimum of 500 water user connections in the first phase just north of Rogue River Drive and west of Highway 62. After that, service will grow depending on demand. The first phase includes a station that will pump water from the Rogue River to a water treatment plant located above the city on property owned by Boehm and his wife, Charlotte, according to Waterworks officials. The plant will be able to treat 500,000 gallons per day that will then flow to a water storage reservoir that is required for disinfection, water demands and residential fire protection. "The goal is to have a citywide water system that will serve approximately 2,000 customers with a total storage capacity of 2 million gallons," according to Debbie Minder of Medford, Waterworks attorney. Shady Cove Mayor Dick Bailey said Boehm is designing the water system to meet the city's plans for future expansion and development. There are more than 950 private wells in Shady Cove, Bailey said. More than half of them go dry in the summer. "We are the largest city in Oregon without a water system and that's strange," he said. "But a good number of people have come here, invested their money, retired, and they just want to live the way they want to live. They're happy with their well or shipping in their water." Bailey envisions the Waterworks system working its way through town as buying groups are formed in interested neighborhoods. "They'll run the pipe up the road, looking for money," said Bailey. "But this would be something you wouldn't have to hook up to. It's free enterprise — the city has no say-so because it's a private industry." That's exactly what has some Shady Cove residents concerned about the water system. "There are those of us who want a public district that we can control and have some say-so on costs and fees. If not, the developer will tell you whether you can have water and can set the price," said Jim Collier, chairman of the Shady Cove Water District. Collier has been keeping the Shady Cove Water District alive since it was publicly voted into dissolution last year. The water district had formed in 2002 to research the affordability of building a public water system, which it discovered would cost from $11 million to $14 million — too expensive for the city to pursue. Boehm said rates for the new water system will be overseen by the Oregon Public Utilities Commission. "It's not a shoot-from-the-hip sort of thing," he said. "They will govern the rates of all utilities from wall to wall." Boehm has been discussing rate regulation with the commission, said PUC Media Liaison Bob Valdez. "At a meeting about six months ago they indicated to us that they would actually give us a plan before they would make the request for regulation," Valdez said. No plan or application has yet been received from Shady Cove Waterworks, but "they fully intend from the get-go to be regulated through us," he said. Once the company's application is filed and accepted, the commission will take about six months to determine final rates for water service based on the company's cost of operation. Rates could be high at first because of the expense of building a new water plant, said Valdez. "The information will come from Shady Cove Waterworks and our folks will go over the books and determine what rates the customers should pay," Valdez said. If service is provided before the commission has established rates, Shady Cove Waterworks will operate under interim rates set by the company itself, Valdez said. "At the end of the PUC examination, if they're charging people, for example, $30 a month and we found rates to be, for example, $26, all rates going forward would be adjusted until customers are made whole again." There's no way to predict what rates will be in this case because each small system has unique variables, said Valdez. The PUC regulates about 92 private water companies in Oregon, many of them comparable in size to Shady Cove Waterworks. A company with more than 500 customers is required by state law to be rate-regulated, said Valdez. "If customers are not happy with the rates, they can file a petition," he said. Jennifer Strange is a freelance writer living in Central Point. Reach her at [email protected]. Advertisement s Mail Tribune Home | Local News | Sports | Business | Obituaries | Life | Opinion AP News | Archives | Site Map | Community | Classified Copyright © 1997-2006 Mail Tribune, Inc. All rights reserved. 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