LIVE OAK SPRINGS WATER FACES $1 MILLION FINE AND TAKEOVER UNDER CPUC PROPOSAL

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Company had flood of violations, including providing unsafe drinking water and illegally selling water to SDG&E and other contractors

By Miriam Raftery

May 20, 2013 (Live Oak Springs) – Chief Administrative Law Judge Karen V. Clopton with the California Public Utilites Commission has issued a decision recommending that  owners of Live Oak Springs Water Company be fined $1 million for violations that have put public health at risk.  The CPUC proposal would  ask the Superior Court to appoint a receiver to take possession of the property , including the bankrupt Live Oak Springs resort, and operate the water system.

“Nazar Najor, the controversial owner, has been selling water to large construction projects without authorization from his small regulated water district that is meant to serve Live Oak Springs ratepayers,” said Donna Tisdale, chair of the Boulevard Planning Group.

That accusation is substantiated by a notice of violation issued by the CPUC on March 21, 2013 against Live Oak, which was ordered to stop selling trucked water to Beta Engineering for use at SDG&E’s East County  (ECO) Substation project. The company was also issued  fined $67,000 for illegal water sales in 2011 for construction of the boulevard Border Patrol Station.

Tisdale filed an action complaint with the Inspector General as well alleging illegal water sales for construction at a new Border Patrol station in Boulevard.   “There is no excuse to flout local authorities or to put the local community’s water supply at risk,” she wrote, adding that the area relies on a sole-source aquifer.

Straub Construction and Army Colonel R. Mark Toy at the Army Corps of Engineers have refused to cease using the water despite complaints from local agencies and Congressman Duncan Hunter.

The company has also been in hot water with the County Department of Environmental Health and the subject of an investigation by the CPUC Division of Water Audits. The DWA testified that ownership and/or transfer of public utility assets of Live Oak have been transferred at least three times without Commission authorization, most recently in 2008, when Nazor Najor acquired ownership from his wife.

“Since 1982, when a Najor family member first acquired Live Oak without Commission authorization, ownership of Live Oak by various members of the najor family have continuingly ignored and been unresponsive to the Commission’s rules and orders,” the Judge ruled. “The Najor family’s inability to operate the public utility water utility is further demonstrated by a history of their non-compliance with the County of San Diego’s Department of Environmental Health,” the decision noted.

For example,DEH issued five compliance orders to Lve Oak including overdue water quality testing, violation of the California’s Safe Drinking Water Act, expiration of an annual health permit, and bacteriological total coliform in the water.

“Live Oak continues to provide public utility water service without a required environmental health permit,” Judge Clopton found.  Further, the company submitted a falsified lab report and has been consistently late with testing required for lead and copper in drinking water.

The administrative law judge found that sales and transfers of Live Oak and its real property, including property comingled with other business interest, are null and void. The Commission should petition the Superior Court to appoint a receiver to assure water supply needs for the community will be met and ultimately, find a new owner.

The owner has 30 days to file an appeal.

Resources:

Proposed decision by CPUC administrative law judge

Violation notice 3-21-13

Violation notice 3-28-13

Nazar Najor's response to CPUC proposed decision on Live Oak Springs Water Company

Court case on Live Oak resort bankruptcy and receivership

Tisdale letter of complaint to Army Corps of Engineers

Army Corps of Engineers response