Water purveyors disagree on cost of Donner Lake system | SierraSun.com

Water purveyors disagree on cost of Donner Lake system

The Truckee Donner Public Utility District has taken over Donner Lake’s water system, but it has yet to pay the price for ownership.

Since mid-August the utility district has been in private arbitration with the former owner of Donner Lake’s water infrastructure, Del Oro Water Co., to decide on the worth of the water system. The TDPUD will pay for the system once the judge decides on a price.

The utility district and Del Oro Water Co. have very different ideas of how much the water system is worth. The TDPUD contends that the water system was decrepit when it took over and is worth $500,000. Del Oro Water Co. thinks the utility district should pay a lot more – $7 million – said TDPUD General Manager Peter Holzmeister.

“Their opinion is inflated of how much the water system is worth,” Holzmeister said. “(Del Oro owner Robert) Fortino bought it eight years before for $500,000, and they didn’t make improvements on it.”

When asked to comment on the arbitration, a Del Oro Water Co. representative said he was told he couldn’t discuss the case until the judge had made a final decision.

The testimony portion of the arbitration is complete, but it will take at least 50 days for attorneys on both sides to submit briefs to the judge. The soonest the judge will determine the cost of the system is November.

Once utility district officials know how much the system will cost, they can create a finance plan and draft final loan documents. Since the TDPUD took over Donner Lake’s water in 2001, it has based its financial plan on paying $500,000 for the system, Holzmeister said.

For some Donner Lake residents, who prepaid Del Oro for their water in 2001 and were billed monthly by the TDPUD beginning in June 2001, the final acquisition of the water system will mean a refund for the double billing.

“Del Oro admitted immediately that they were not entitled to keep that money (from the prepaid bills),” Holzmeister said, “but they wanted to wait until the entire condemnation was complete before paying it back.”

The utility district was set to go to trial by jury earlier in the summer, but the judge decided water rights issues might be too complicated for a jury to understand and sent the case to private arbitration in Auburn.

People concerned that the utility district does not have their correct contact information for the refund may call 582-3909.

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