Utility may buy water supplier | SierraSun.com

Utility may buy water supplier

Courtesy photo/Sierra SunA 60,000-gallon water tank recently installed at the Skyland neighborhood, a location served by the Tahoe Park Water Company. Owner Rick Dewante also operates Lake Forest Water Company, which he may lose to the Tahoe City Public Utility District.

The Tahoe City Public Utility District may take a large step Friday to absorb a troubled water company that serves the Lake Forest area.

The district’s board of directors could create a new public improvement district to take over the private company’s water distribution.

At the district board’s regularly scheduled meeting Friday, staff of the Basin’s oldest local agency will recommend a preliminary plan for the possible replacement of most, if not all, of the Lake Forest Water Company’s infrastructure.

The Tahoe City utility would not replace those water mains until the public district finishes assessing the private company’s value and makes an offer to the owner, Rick Dewante.

“We’ve started down the road on our water acquisition policy,” said district General Manager Bob Lourey Monday by phone. “We are currently looking to get an appraisal on the property.”

The appraisal should be completed within the next two weeks, Lourey said. The acquisition policy adopted by the utility last April outlines procedures on taking over water companies, a policy the district had never broached before.

“This is the first water company the district has considered taking over without consent,” Lourey said in an earlier interview.

“This is part of the game, part of the process,” Dewante said Monday in a phone interview. “It’s just another step. They want to take the company by eminent domain. They think they can offer water for less money, but they haven’t told anybody what it will cost. It’s just pie in the sky.”

The cost to upgrade the system is estimated at around $1.7 million, according to Lourey. How that cost would be distributed among the customers will be decided later.

Dewante said he is in the process of obtaining money for some improvements through a $420,000 grant.

Some Lake Forest water customers have criticized the private water supplier and advocated a public utility takeover. They cite poor water quality, lack of fire protection and high rates as reasons to create a new Lake Forest Improvement District.

“The history in this water company has been, if the customers have a complaint its fifty-fifty that it will be dealt with,” said Wally Auerbach in an December interview. Auerbach is a customer of the Lake Forest Water Company.

The formation of the new district would allow the Tahoe City utility to assess the residents to pay for needed improvements to the water system ” a system that Auerbach said should be totally replaced.

Board directors formed the new improvement district in October, but in name only, Lourey said. The district will have to conduct a formal vote of the new district’s customers before authorizing an assessment on ratepayers. The vote is tentatively scheduled for a summer mail-in election.

The Tahoe City utility’s staff and general manager are recommending Auerbach’s engineering firm to prepare the design report for the Lake Forest Improvement District. The utility plans to pay for the $36,006 report from its general reserves, according to a staff memo.

Dewante said he sees a conflict of interest when one of the main advocates of the improvement district could possibly receive a contract from the same entity that will take over his company.

“I’m sure they are perfectly within the law, but from a layman’s sense, it’s pretty obvious to me,” Dewante said.

Auerbach shrugged off the criticism, saying that it is in the public’s best interest to go with the best plan, and the utility district has the best one.

“If all the work I put in this was a marketing effort, I would have walked away a long time ago,” Auerbach said. “We’ve got hundreds of hours into [this].”

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