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Squaw water merger fails through

Jeremy Morrison, Sun News Service

Olympic Valley -After heated debate split the oldest Squaw Valley subdivision nearly in two, members of the Squaw Valley Mutual Water Company rejected by eight votes (116-108) the proposed merger with the Public Service District Friday, June 15.

The issue, whether or not to turn over the Mutual Water Company’s water rights to the district in exchange for $975,000 to go toward rehabilitation of the Mutual’s aging water system and lower rates for the company’s 280 shareholders, prompted outspoken opposition and a barrage of letters to shareholders. Both sides have accused the other of spreading misinformation in an attempt to sway the vote.

With Intrawest’s behemoth on the rise, and numerous other developments within the valley, Olympic Valley is facing a water shortage. The public service district has been searching for a remedy and thought they had found it in the Mutual Water Company.

The Mutual Water Company is made up of the residents of the older part of Squaw Valley, the neighborhoods in and around Sandy Way and Lanny Lane. It has its own wells, own distribution system and own water rights. It has excess water, but an aging distribution system, what Mutual President Geoff Gardner himself called “an old decrepit water system run by untrained amateurs.”

The district, in an attempt to solve its own water woes offered to take over control of Mutual’s water supply, pay to replace its aging pipes and continue serving Mutual’s shareholders. Mutual’s board of directors were largely in favor of the proposal but an outcry was soon raised among a portion of the affected residents.

“Anybody who gives up water rights is crazy,” said Joan Klausen, a Mutual shareholder who, inspired by Marc Reisner’s book “Cadillac Desert,” spoke out against the merger. “Water rights are precious. Water is the most important thing in the world and if you have water rights you don’t ever give them away.”

J. Bruce McCubbrey is a San Francisco resident who has been a second homeowner in Olympic Valley for 15 years. He said he has rarely involved himself in the valley’s politics until the water issue came up. McCubbrey said the proposed contract between the district and Mutual raised a lot of questions in his mind. Among them was, were the shareholders receiving appropriate compensation for the rights to their water? He would like to wait for the results of a groundwater study due out in September. The study is expected to reveal just how much water truly exists in Olympic Valley.

“It seems to me that without knowing how much water is in the valley, you don’t really know the value of the asset that you have, that you’re transferring to the PSD,” McCubbrey said. “In September we will know a lot more about the issues and hopefully we can put some directors in there who are not hell-bent on selling this asset, or at least will put in a better agreement than the one I read.”

The Squaw Valley Public Service District spent five years working with the Mutual board of directors to come to an agreement that would be amenable to both. Those with the public service district thought the plan was in the best interests of everyone in the valley, but they are hardly heartbroken now that it failed to pass. The merger would have meant a lot of work for them, replacing Mutual’s aging pipes and dealing with unhappy Mutual customers.

Rick Lierman, general manager of the Squaw Valley Public Service District, expected some opposition to the merger, but said it got more out of control than he ever imagined.

“There is a very vocal minority, six or eight maximum, who have distributed all these letters and have stirred up the emotions of the rest,” Lierman said. “This was initially going to pass because it’s the right thing to do for the community and it was the right thing to do for shareholders.”

Lierman is baffled by those like Klausen who are so guardedly protecting their water rights.

“It’s not like we’re going to transfer their water rights to some development in Reno,” Lierman said. “We’re going to use the water rights to serve them. We can’t take their water and then not serve them.”

“If we properly manage the well field, we can increase production out there by 40 percent annually,” Lierman said, quoting preliminary results of the groundwater study. “If we continue operating independently of each other we lose that management benefit there on the aquifer.”

Dale Cox, as a Mutual shareholder and a public service district director, thinks that Mutual shareholders would have benefited from the agreement, but doesn’t regret not having to deal with the hassles the merger would have resulted in.

“As a shareholder I feel Mutual Water Company customers have missed out on an opportunity to have the valuable natural resources properly managed and monitored and we also have missed the opportunity to have a very qualified and professional management team at our disposal with substantially lower rates,” Cox said.

“As a director [of the district] I feel that the merger would have resulted in unknown problems and confrontations with unhappy Mutual shareholders. The district’s intentions are to move the community forward in a manner that will benefit everyone. The merger could have been very time consuming and made it difficult for the service district to focus on its priorities.”

Without Mutual’s water at its disposal the district is going to have to come up with another means of supplying water to the development demands.

A lasting solution is awaiting results of the groundwater survey.

But it may mean building a water treatment plant to remove the excess iron and manganese that is currently making some of the valley’s water undrinkable.

“The district’s goal is to manage the resource for everyone to have water forever in the valley,” Lierman said. “We have no intention of anything less than that.”


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