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PURA hears testimony on proposed sale of Carriage House Apartments and its private water system
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Summary
At a Public Utilities Regulatory Authority evidentiary hearing, three witnesses for the applicants were sworn and testified about the Carriage House Apartments water system, including asset condition, management plans, utility billing (water included in rent for 64 units), and financing timelines; the panel set deadlines for late exhibits and a proposed final decision in April.
A regulatory hearing before the Public Utilities Regulatory Authority (PURA) on the proposed sale of the Carriage House Apartments and its private water system heard sworn testimony from the owner, the proposed buyer and the system operator, and set a schedule aimed at moving the matter toward a final decision.
Brian Krivcher, owner of the Carriage House Apartments and its water system, Douglas Smolov, representing SR Yukon (the proposed buyer), and Victor Nigro Jr., of Aqua Pump (the current and proposed operator), were introduced by applicant counsel and sworn before the panel. Attorney Boucher moved to admit the parties' interrogatory responses into evidence as exhibits; the panel received the submissions for the record.
In cross‑examination several staff questions focused on the physical condition and inventory of system assets. Counsel showed an attachment to DPH 1 that listed equipment remaining useful life and pointed out blank rows and an entry indicating removed tanks. Victor Nigro Jr. explained the blank lines corresponded to tanks previously removed from service and should have been omitted from the table. Under questioning the witnesses said the application identifies the assets and that, at present, no additional assets requiring immediate replacement had been identified beyond what is in the filing.
Counsel examined SR Yukon's planned operations after the transaction. Smolov confirmed SR Yukon currently has no employees and intends to hire a third‑party, full‑time on‑site property manager to handle day‑to‑day leasing, tenant repairs and routine vendor coordination; SR Real Estate principals would retain asset‑level oversight such as financing and capital decisions. On the relationship with Aqua Pump, witnesses said routine inspections and maintenance would generally be coordinated by the property manager, with the owner principals engaging on capital improvements.
The panel questioned how water service charges are billed to tenants. The applicants said water service is included in rent rather than billed as a separate surcharge or per‑tenant charge: "the water comes with that rent," Brian Krivcher said. The property contains 64 units; witnesses said rent is set by unit size, which effectively allocates utility cost across units rather than by a direct water fee.
Counsel reviewed site mapping and asset locations. Victor Nigro Jr. described the pump house, wells, backup generator and delivery plant as colocated on a single lot; the distribution main runs down the road. The office building identified in earlier materials has been converted to two apartments and the distribution "blow off" is at the end of the main near that old office. Witnesses said they had not obtained a cost estimate to connect to the nearby Yukon municipal main but would consider such a connection if it became available.
Commissioner Smith asked whether the well parcel could support additional buildings; witnesses said buffer setbacks for wells likely prevent further construction on that lot and any development would require separate review. The panel also confirmed sewer service is provided by septic, and septic costs are included in the property's operating budget rather than Aqua Pump's contract responsibilities.
On financing, Commissioner Smith noted M&T Bank is expected to be the lender and asked whether the loan would require an operating reserve; Smolov said a reserve would be funded at closing and calculated as a dollar amount per unit multiplied by 64 units, but he did not have the per‑unit figure available at the hearing.
Attorney Boucher asked whether staff or the panel could expedite the regulatory timeline to assist lender certainty; PURA acknowledged the concern. The panel set deadlines for late‑file exhibits (April 2), said a proposed final decision is targeted for April 24 with written exceptions due May 1, and noted a commissioner vote on the final decision is currently scheduled for May 27. No formal votes were taken during the evidentiary hearing.
The hearing record will include the parties' submitted interrogatories and attachments; parties were directed to file any additional briefs or motions as needed. The panel closed the hearing after thanking the witnesses, staff and counsel and confirming no further cross‑examination by DPH or OCC counsel at that time.
