Donner Lake says ‘yes’ to PUD: but lawsuit may delay purchase of water system |

Donner Lake says ‘yes’ to PUD: but lawsuit may delay purchase of water system

Donner Lake property owners want to replace their water system, and they want the Truckee Donner Public Utility District (PUD) to do it.

According to a preliminary tally of ballots sent out by the PUD to lake property owners, 86.7 percent of 1,150 people support the transfer of the water utility to the PUD.

However, any transfer of the water company may be delayed by a new lawsuit that could drag on for months.

On April 2, Donner Lake Water Company filed a California Environmental Quality Act lawsuit against the PUD, alleging the environmental documents associated with the Donner Lake Water System Acquisition Project were inadequate. Specifically, the suit alleges that the project description is incomplete and that the environmental impacts and mitigated measures have not been analyzed sufficiently.

The suit calls for an injunction against the PUD’s Acquisition Project until the completion of an environmental impact report.

“We expected the suit,” Holzmeister said. “Robert Fortino (owner of Donner Lake Water Co.) told us he would file it to protect his own interest.”

The suit is the third of its kind filed by Donner Lake Water Co. since last summer.

The company’s first suit, filed against Donner Lake Village Homeowners Association over condemnation of an easement that would allow the utility to construct a lake intake, was dismissed earlier this year pending compliance with CEQA. The second suit, filed against the Town of Truckee, was eventually dropped after the town signed a stipulation for dismissal.

“If (Fortino) keeps fighting the condemnation, it could drag on all summer,” said Kathy Polucha-Kessler, a spokeswoman for the Donner Lake Citizens Group for Drinking Water. “We have asked (the water company) to dismiss their lawsuit against the PUD and enter into a friendly condemnation with the PUD. That would best serve the community.”

Holzmeister said he believes that the lawsuit will not stand up in court.

“We don’t believe our environmental documents are in any way flawed … But beyond that we are hoping we can come to terms with Fortino to buy his water system,” he said.

Donner Lake Water Co. refused to comment on the current litigation, but spokeswoman Heather Milne said the company has met with the PUD to discuss the acquisition, has encouraged a future meeting, and presently awaits confirmation.

Holzmeister said he doesn’t know specifically how long the suit could delay acquisition efforts, but he feels the matter will be resolved expediently.

Timing of the lawsuit will likely play a big role in a decision by the California Public Utilities Commission on the water company’s request for more than $15 million to repair and replace the water distribution system.

The funding to begin replacement of the system as the season of peak water use rapidly approaches has become a hot potato for state officials hoping to avoid system depressurization, water failures and water outages.

System failure last summer left dozens of residents without water – some for several weeks. At about the same time, the California Department of Health Services issued a water emergency and boil water order until further notice.

With the risk of contamination from system depressurization, the boil water notice and emergency declaration quickly approaching its first anniversary, further water outages and health risks are likely unless the system sees significant improvements before this summer, say water officials from the Department of Health Services.

In an unprecedented series of meetings held in Truckee by the Utilities Commission last week, Donner Lake residents lined the walls and waited in line for an opportunity to explain why they preferred a PUD takeover as opposed to continued service by Donner Lake Water Co.

“There were many speakers,” said Charlie White of the public participation hearings, “and to my recollection only one was not against Fortino.”

The resounding majority described foul water, lack of service, health risks and what they claimed are the inadequate business practices of Donner Lake Water Co.

Mayor Don McCormack and Town Council member Maia Schneider were among the speakers.

“In my heart I believe Mr. Fortino is not taking proper care of the people with whom he does business,” Mayor McCormack said.

California Public Utilities Commissioner Henry M. Duque was present for the evening meeting, as was Administrative Law Judge Glen Walker.

Evidentiary testimony by Real Parties, a group of lake residents, and Donner Lake Water Co. occurred April 4 and 5 over capital improvement funds.

“Given the fact that we had never been attorneys before we did the best we could,” said Polucha-Kessler, one of two representatives on behalf of Real Parties.

“We presented our witnesses well, we presented our testimony well, but the CPUC is looking for what’s best for the community in the short term, they are not really looking at the long term.”

Donner Lake Water Co. spokeswoman Heather Milne commented via E-mail that they are the only entity ready to move forward with repairs at this time.

“Based on the recent proceedings, it is evident the CPUC recognizes the need to immediately fund improvements which Donner Lake Water Company is prepared to undertake,” said Milne.

The CPUC will make a decision based on the testimony of both parties and the record established in the public participation hearings.

But considering there has been a 10-year-old mandate to repair, replace and upgrade the failing water system, an 11-month old boil water notice and water emergency, the delivery of funds is apparently imminent.

Donner Lake Water Co. was authorized to borrow approximately $1.5 million in emergency funding earlier this year for repairs including fixing the lake intake and arranging joint trenching plans.

The State Revolving Fund application is still incomplete and has been increased to $15.5 million to include contingencies required by the California Department of Health Services, said Dean Evans, director of the CPUC’s water division.

The PUD has made an offer to purchase the water system. Del Oro Water Co., the parent company for Donner Lake Water Co., hired an appraiser, but no further reports have been made.

“The commission cannot sit here knowing that there is a problem with another Fourth of July on the horizon and not do anything,” Evans said. “(The water system) is a time bomb … It would be derelict of the commission not to do something.”

The Office of Ratepayer Advocates has recommended that any authorized funds be subject to review by the Department of Health Services in order for the Donner Lake Water Co. to receive reimbursement.

The Utilities Commission deadline for briefs by Real Parties and Donner Lake Water Co. are due April 27.

Administrative Law Judge Glen Walker will take the briefs and record from the testimony, weigh all that information and write a draft decision on funding.

That will be mailed out to the involved agencies for comment. Within 20 days, the judge could change the decision.

Commissioner Henry M. Duque will either sponsor the decision or write an alternate. That information will be scheduled for one of the bimonthly commission meetings in May or June.

“Everyone, at this point, has had their day in court,” Evans said.

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