Water companies talking ownership issues

3/09 unedited Tahoe Mt. News

By Kathryn Reed

Talks have turned a little more serious between South Tahoe Public Utility District and Tahoe Keys Water Company officials regarding the latter being acquired by the bigger entity.
STPUD General Manager Richard Solbrig spoke to his board last month about the latest discussions. A couple weeks later the Keys was asked to provide financial information, well logs, water info and other documents. All of those are expected to be handed over to STPUD this month. Then STPUD’s engineering department will review the bulk of the information.
South Tahoe PUD is not actively seeking another water district and the Keys isn’t sure it wants to sell, but both sides are interested in seeing where the dialog leads them.
“For the first time they’ve provided us with a list of things they would like to see in order to evaluate the water company,” said Ed Morrow, Tahoe Keys Property Owners Association general manager. “It makes a lot of sense whether any ownership changes hands or not.”
He said this is especially true for emergency situations like a fire so both districts know what assets and capabilities the other has. The companies have shared information in the past and continue to have the capability to pump water between the two systems.
Unlike STPUD’s wells, the Keys’ wells were never contaminated by the fuel additive MTBE.
However, one of the three Keys wells is turning up perclorethylene. This dry cleaning chemical has contaminated other wells in the basin. It used to be common for companies to dispose of the cleaning solution in dry wells.
The Keys water lines went in in the late 1960s-early 1970s when Dillingham built the lakefront residential area. The Keys water supplies 1,530 households and a handful of commercial properties, including the marina, business plaza where Sierra Athletic Club is and Pope Beach.
“We would not be facing the challenge that we had with some of the systems that went in in the 1950s with 2-inch lines,” STPUD’s Dennis Cocking said of the Keys.
The Keys has 6- and 8-inch water mains.
South Tahoe PUD has grown through the years by acquiring small water companies. What makes the Keys more appealing that Lukins Brothers Water Company is the infrastructure is not as old and the lines are larger.
Danny Lukins said it would cost between $12 million and $18 million to upgrade the family owned water company that has been around since the 1940s. In 2006, STPUD looked at Lukins and said it would take $18.4 million to bring it up to today’s standards.
One thing that may help all water districts in the basin is the lobbying effort by Cocking and STPUD directors Jim Jones and Dale Rise who were in Washington, D.C., the week of Feb. 23.
Cocking had earlier been advised by Sen. Dianne Feinstein, D-Calif., that a regional approach to infrastructure water needs would be more welcome on Capitol Hill. He helped form that partnership. Their cause made it through the initial phase and now the water agencies are waiting to see what spending bills make it through Congress to know what funds may trickle to Tahoe.