Matthew Renda
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November 16, 2010
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Water wars: Hearing looms on eminent domain takeover of Tahoe water company, amid arsenic allegations

TAHOE CITY, Calif. — Logan Carnell owns a house in Lake Forest — yet, it currently stands uninhabited, mainly due to drinking water deemed unsafe by California's health department.

“I don't allow people to live there, and I can't sell it,” Carnell said. “All because of the water situation.”

That “water situation” is a nearly four-year dispute between customers of the Lake Forest Water Company and its owner, Rick Dewante, who argues that policies established by the neighboring Tahoe City Public Utility District have prevented him from upgrading the quality of his customers' drinking water.

Lake Forest customers are outraged, Carnell said, about the lack of compliance with California drinking water quality standards, consistently low water pressure, a lack of viable fire suppression infrastructure and inordinately high rates.

“We're exhausted,” Carnell said. “We don't know what to do. We haven't received letters of notification regarding water quality standards. The owner keeps delaying things and finding loopholes. It's very frustrating.”

The principal source of the frustration, Carnell said, is arsenic contamination stemming from the Old Mill Well, drilled in 2004 and one of three sources LFWC has tapped in order to provide water to the 117 connections in the district.

According to a California Department of Public Health inspection report addressed to Dewante on Aug. 25, 2010, water samples taken in early 2007 from the well showed arsenic levels twice the Maximum Contaminant Level as mandated by the state of California. The standard for arsenic contamination is 0.010 milligrams per liter.

“An arsenic sample was taken by the Company in March of 2007, which ... exceeded the arsenic MCL, but our records do not show any arsenic samples have been taken since,” the report states.

Once an MCL is exceeded, the health department requires water purveyors to test a water sample every three months over a one-year period in order to develop an annual average.

Ronald Owens, public affairs officer with the health department, confirmed via e-mail on Monday, Nov. 1, that Dewante has not conducted appropriate follow-up monitoring, and thus is still non-compliant with California arsenic standards.

“CDPH issued (a) Compliance Order on September 1, 2010,” Owens wrote. “The (order) requires quarterly public notification and the submission of a Compliance Report by Nov. 30, 2010, detailing a schedule and method of achieving compliance with the arsenic standards.”

As of Tuesday, Nov. 16, Carnell said she has not received notification from the Lake Forest Water Company.

Furthermore, when Owens was asked in early November if water company customers had received notice regarding lack of compliance, he replied: “Not to our knowledge.”

Nevertheless, Dewante insisted during a recent interview he has and will continue to comply with health department orders.

“I have complied with all state health requirements for notification,” he said.

During that interview, Dewante acknowledged the problems at Old Mill Well.

“It's no secret,” he said, when asked if Lake Forest Water Company drinking water exceeded state-mandated arsenic levels.

However, Dewante said he blends the water derived from the well with water the company receives from an intertie (a connecting pipe) with the Tahoe City Public Utility District — and the blended water meets California arsenic standards. He said he only uses the Old Mill Well during the summer, when demand exceeds the amount of water he is able to provide from TCPUD.

However, the health department report disagrees.

“There is correspondence from the (LFWC) that states the well may have to be used to meet summer demands, but ... the well was brought online in early spring when the (TCPUD) source was fully capable of meeting system demands,” the report states.

Dewante said he is being unfairly targeted by TCPUD, and it is the district's “propaganda” that has caused outrage among Lake Forest residents.

TCPUD is currently pursuing acquisition of the entire Lake Forest Water Company infrastructure, via eminent domain for the public good, through the Civil Division of Placer County Courts, said TCPUD Board President Dan Wilkins.

Dewante said he will continue to fight the eminent domain proceedings.

“The TCPUD has a financial and political interest in taking over LFWC,” he said.

Dewante further said policies set by TCPUD have essentially forced his hand regarding water sources and supply.

He said he approached TCPUD in 2008 about “water wheeling” — a form of water transfers. In this instance, Dewante — who also owns Tahoe Park Water Company, which serves approximately 500 customers on the West Shore — wanted to provide TCPUD with water from Tahoe Park, for which he would receive credits to be used toward providing Lake Forest with water derived from TCPUD.

Dewante said state law obligates TCPUD to engage in water wheeling.

Wilkins said TCPUD attempted to enter into a water wheeling agreement, but Dewante refused to meet conditions set by the board.

“Tahoe Park is generally a good water source, and meets all the standards, but we wanted to establish some criteria to ensure our customers were getting high quality water,” Wilkins said. “After we identified the criteria, Mr. Dewante stopped pursuing the contract.”

Dewante also said TCPUD General Manager Cindy Gustafson is a customer of Lake Forest Water Company, which is why TCPUD is pursuing eminent domain so aggressively.

Wilkins countered by pointing out the decision to pursue acquisition “was 100 percent a board decision.”

“It's not something (Gustafson) can do,” he said.

In a Friday, Oct. 29 interview, Gustafson confirmed she does reside in the Lake Forest water district.

Aside from confirming the TCPUD is pursuing eminent domain, Gustafson declined further comment, citing a potential perception of conflict of interest.

Wilkins said TCPUD is not pursuing eminent domain for financial or political gain.

“From a board perspective, our preference would have been that LFWC customers never felt the need to come to us,” he said. “It's unfortunate that it had to come to this. But we have 10 other private water systems and we haven't seen customers of those districts saying anything similar. So we decided to move forward.”

For that, Carnell said she is grateful.

“The residents of Lake Forest should be thankful that we have a local public agency like the (TCPUD) that is willing to help when others won't,” she said in a written statement. “Rick Dewante has no business running a water company or being responsible for providing such an essential service to the public.”

As for how much the water company is worth, TCPUD declined to discuss the issue of valuation for this story, as it is a primary component of the litigation. Tony Laliotis, TCPUD director of utilities, said the total cost to the district to finalize the acquisition is unknown and may not be known several months or longer.

Wilkins said TCPUD is committed to performing necessary upgrades to LFWC pipe infrastructure to bring the water into conformance with state standards, increase water pressure and address shortfalls in fire suppression infrastructure.

Wilkins said if the court rules to allow TCPUD to assume operation of the water company, the board will have a better idea of how much it will the district to make the necessary upgrades.

“We have a pretty good read on third party funding,” Wilkins said. “The PUD is actively pursuing grant funding on the federal, state and local levels. We want to solve these problems entirely.”


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Tahoe Daily Tribune Updated Nov 16, 2010 03:32PM Published Nov 16, 2010 03:22PM Copyright 2010 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.