Matthew Renda
Sierra Sun

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December 14, 2010
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Placer judge grants control of private water company to Lake Tahoe utility district

UPDATE: 4:45 p.m.

TAHOE CITY — A Placer County judge has awarded operational control of a private water company to the neighboring Tahoe City Public Utility District, while also chastising the owner for putting the public at “significant” risk by supplying potentially contaminated drinking water.

The ruling — handed down Dec. 2 in Placer County Superior Court by Judge Margaret Wells — means TCPUD can immediately begin preliminary work on addressing shortcomings in Lake Forest Water Company’s deteriorated infrastructure.

“There are ‘significant’ areas of substandard or leaky pipes and other conditions that urgently require repair or renewal,” Wells wrote in the decision. “The hardship to (TCPUD) by delaying the order for possession is substantial. More importantly, the harm to the public by the delay is significant.”

The ruling represents the first step in the public utility district assuming full control of the Lake Forest company through eminent domain.

“We are prepared to move forward with the operation of the system as authorized by the order of possession,” said Tony Laliotis, TCPUD director of utilities.

The Placer County court must still decide on a fair market value for the water district and how TCPUD will compensate Lake Forest Water Company’s embattled owner, Rick Dewante.

In a Tuesday phone interview, Dewante criticized TCPUD for assuming control before knowing the purchase price.

“There’s been no settlement,” he said. “The costs of buying the district is going to be put on the backs of all the district’s ratepayers and not just the residents of Lake Forest.”

Laliotis deferred the district’s response on Dewante’s assertion to Dan Wilkins, president of TCPUD board of directors. Wilkins was not available for comment.

In a previous Sierra Sun story, Wilkins said the district 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.

“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.”

The judge’s ruling concludes Dewante’s ownership and management of the company has been substandard.

“In March 2009, the (California Public Utilities Commission) found the system had ‘significant’ problems that ‘urgently’ required ‘immediate’ improvement,” the order states. “In response to this motion, however, the defendant has not offered any evidence that those problems have been addressed or alleviated, or that any improvements have been accomplished.

“In addition, on September 1, 2010, the Department of Public Health issued a Compliance Order, with a finding that defendant had violated certain regulations in that the arsenic concentration at the Old Mill Well exceeded the arsenic maximum contaminant level,” the ruling further stated.

Dewante said he was prevented from making necessary improvements by TCPUD, who would not allow him a permanent intertie (a connecting pipe) with TCPUD pipes which would have completely alleviated the contaminated water coming from Old Mill Well, one of Lake Forest’s drinking water sources.

“I only used the Old Mill Well in the summer when demand exceeded the supply,” Dewante said.

Dewante also owns Tahoe Park and Skyland Nielsen water companies, located on Lake Tahoe’s north and west shores. He said TCPUD thwarted his attempts to wheel water from those districts into Lake Forest.

Dewante 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, but he said he was prevented from doing so by TCPUD management.

In a late October interview, Dan Wilkins, president of TCPUD’s board of directors, explained the district’s rationale behind disallowing the water wheeling.

“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 said the criteria was “phony.”

In all, the Lake Forest Water District provides 117 connections to residences and businesses in Lake Forest, a neighborhood located just east of Tahoe City.

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Tahoe Daily Tribune Updated Dec 15, 2010 11:58AM Published Dec 14, 2010 02:48PM Copyright 2010 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.