Kern water district inks deal to keep water flowing to homes hear Patterson
Homeowners in a development near Patterson no longer have to worry that a water agency 200 miles away could cut off their taps.
A contract was signed late this week between the Kern County Water Agency and Western Hills Water District that will keep water water flowing to the 600-home Diablo Grande development in the western foothills of Stanislaus County.
The agency agreed to deliver up to 1,500 acre feet a year to Western Hills, which serves Diablo Grande exclusively, and forgive $14 million in debt the agency said it was owed.
The agency signed off on the contract Thursday and Western Hills agreed to it on Friday.
The agency will charge Western Hills $37,500 per year, with an escalation clause, as an “administration fee,” according to the contract.
Western Hills will get credit for water it can’t take in wet years, which it can also bank. And for a five-year period, it can buy an additional 1,000 acre feet for an annual, non-refundable $50,000 “option fee” paid to the agency. Western Hills can’t use any of the water supplied by the agency outside of its service area and agreed to transfer 4,791 acre feet of water it had banked in Kern County to the agency.
The deal erases not just the $14 million in debt, but also wipes away contracts and agreements going back to 1998, when this circuitous water deal was first hatched.
When the Diablo Grande development was first envisioned as a 5,500 home, multi-golf course luxury development in 1998, Western Hills bought the rights to 8,000 acre feet of state water from the Berrenda Mesa Water District for $8 million.
Developers expected to take that water off the California Aqueduct, which runs at the foot of the housing project. But the Department of Water Resources nixed the deal, not wanting to add a new contractor to the system.
KCWA, already a State Water Project contractor, stepped in.
It took over the Berrenda Mesa contract for 8,000 acre feet and agreed to sell Western Hills its banked lower Kern River water “by exchange.” In reality, Western Hills took water from the aqueduct and KCWA debited a like amount of river water held in its Pioneer groundwater bank.
As part of its agreement, Western Hills reimbursed KCWA for annual state transportation and operations/maintenance charges associated with water delivered through that exchange.
But Western Hills never took its full allotment.
The 2008 housing market crash and several other factors stunted Diablo Grande’s growth to just 600 homes and no golf courses. With so few paying customers, the Western Hills Water District couldn’t keep up with the transportation and operations/maintenance costs of the state water so stopped paying KCWA back in 2019, amassing the $14 million debt.
Diablo Grande residents voted to boost their own water rates to $600 a month in an effort to make headway on the debt, but eventually KCWA said it would have to cut off the water by May 31.
This deal means residents no longer owe that money, but Western Hills President Mark Kovich has said water rates will likely have to stay around $400 a month to cover the district’s expenses of about $200,000 a month.
