State pursues receivership for Big Basin Water

BIG BASIN — After years of unreliable service, code violations and failures to respond to regional authorities in a timely manner, the California Water Resources Control Board Division of Drinking Water says it has engaged the Office of Enforcement to begin the process of pursuing a receivership for Big Basin Water Co.

According to a letter sent by the control board to the company’s private owners Jim and Shirley Moore in late February, the company has been falling short of its duty to consistently provide safe, potable water to its customers in the Santa Cruz Mountains.

“BBWC (Big Basin Water Company) is not currently satisfying that obligation as it does not have the technical, managerial, and financial capacity to operate a public water system, and it is unresponsive to the rules and orders of the Division,” wrote Office of Enforcement attorney Laura Mooney in the letter.

Mooney concluded the seven-page report by stating: “In our view, a receiver should be appointed to assume possession and operate BBWC’s drinking water system for the purpose of bringing BBWC back into compliance and ensure the public has reliable access to safe drinking water.”

Options on the table

A receiver is someone appointed by a judge to temporarily manage a company and its operations, though ownership does not change. State Water Resources Control Board spokesperson Blair Robertson told the Sentinel this week that the Division of Drinking Water is currently working on the steps it needs to complete before filing a lawsuit that will begin the receivership process.

“The judge will consider arguments for and against the appointment of a receiver,” wrote Robertson in an email. “If the judge agrees that a receiver is needed, one will be appointed on terms decided by the judge.” According to Robertson, the whole process could take “many months.”

The receivership is also being pursued only for the water side of Big Basin’s operations and not for its small wastewater treatment station, which is regulated by the Regional Water Quality Control Board.

State authorities say they have discussed their plans with Big Basin Water, but the company’s Chief Operator Damian Moore remains skeptical of how useful an appointed receiver could be.

“We would need someone that would be in a hard hat and boots to justify paying them with the staff we have,” said Moore. “That’s what we need is people on the ground not someone in an office sending emails taking more money than any of us make.”

The state’s letter documents efforts to bring the water company into compliance dating back to 2018, when the cost of corrective actions was almost $2.9 million.

That was before the CZU Lightning Complex Fire, which devastated portions of the Big Basin system, leaving it with only one well source for the 547 customers that it now serves.

The Sentinel documented Boulder Creek residents who have endured multiple water outages and boil water orders in the fire’s aftermath, along with reports of black filters and taps that have spewed brown water.

At this point, Moore said the family is actively trying to sell the company, which he called the “best case scenario.”

Alternatively, Big Basin Water has also explored a consolidation with a neighboring public utility company, a move that has been strongly encouraged by local and state leaders. But those negotiations have ended for now.

Rick Rogers, district manager for the San Lorenzo Valley Water District, told the Sentinel that the public utility has explored consolidation with Big Basin Water on several occasions, including in recent months. But the district estimated that it would cost about $40 million to complete Big Basin’s system repairs to bring it back into compliance; a figure it considers untenable without outside funding.

“There were no assurances that if the district did consolidate that we would get funding,” said Rogers. “That would have to put the upgrades and repairs on our existing rate payers and that was just basically unacceptable to our district.”

In the meantime, Rogers said a receivership may help move the process forward in terms of finding a long-term solution, including potential consolidation. But he stressed that a secure funding mechanism through state grants or other sources will be necessary.

“Hopefully that funding will be made available, it has to be. Otherwise that system will fail; that system is failing and it needs a large cash infusion,” said Rogers.

While Santa Cruz County officials have no jurisdiction over the privately owned utility, 5th District Supervisor Bruce McPherson, who represents the Big Basin area, has been working for years with local and state stakeholders to try to facilitate a viable solution.

“But whatever the future holds for Big Basin (water) customers, there’s going to be a higher cost involved because to repair the system and operate it properly is going to require more revenue,” said McPherson.

Rate increase meeting

Big Basin has set in motion a possible water rate increase for its customers for the first time since 2014 as a means for raising funds to invest in the company’s infrastructure, according to Moore.

“If the rates go up then obviously we’ll be able to create revenue for infrastructure, whether it be to make loan payments or to outright purchase tanks or pay third party contractors to do some projects,” said Moore.

The proposal would cumulatively increase rates by $271,613 or 55.5%, according to the California Public Utilities Commission, which has the authority to approve, partially approve or deny the request.

To explain the rate increase process and receive public input, the commission will be hosting a public meeting Monday night at the Boulder Creek Fire Department. Customers are encouraged to attend the event to ask questions about the process or other issues related to Big Basin Water.

If you go

What: Big Basin Water Co. rate increase public meeting hosted by the California Public Utilities Commission.

When: 6 p.m. Monday.

Where: In person at the Boulder Creek Fire Department 13230 Central Ave. Boulder Creek.