KELSEYVILLE, Calif. – A local water system is facing the potential for millions of dollars in fines for not filing required reports with the state for several years and for allegedly violating effluent discharge regulations.
The Riviera West Mutual Water Co. has been notified of a proposed administrative civil liability order for $2,844,000 from the Central Valley Regional Water Quality Control Board.
The proposed fines are for failing to submit monitoring reports and for effluent violations based on the late reports.
At its meeting next Tuesday, May 22, the Board of Supervisors will consider sending a letter to the Regional Water Quality Control Board regarding the potential fines and penalties.
Riviera West Mutual Water Co. serves 245 water connections in the 505-residential lot subdivision, according to the Board of Supervisors’ report.
The matter has stretched over 14 years, according to Tom Smythe, chair of the Riviera West Mutual Water Co. Board of Directors. Smythe also is a water professional himself, working as a water engineer for the county of Lake.
“The real issue is that we’re being fined for not reporting on the possible discharge of backwash water,” said Smythe.
He explained that Riviera West’s treatment plant takes water from Clear Lake, treats it, runs it through filters, chlorinates it and then runs it through the distribution system.
Solids from the lake water stick on the filters, which are cleaned with treated drinking water, said Smythe. That “backwash” goes into a tank and is allowed to settle.
Smythe said that the system was allowed, at one point, to discharge that backwash into Clear Lake, but since about 2005 the water company has been discharging it on land.
“We’re being fined for polluting Clear Lake with drinking water,” said Smythe, adding, “It’s going to basically bankrupt us.”
In May 1996, the Central Valley Regional Water Quality Control Board issued waste discharge requirements for discharge of the backwash water, including the requirements for quarterly reports and effluent limitations, with which the state alleges the company did not comply.
The regional water board placed a cease and desist order on Riviera West Mutual Water in 2002 after it was discovered that the company had submitted no monitoring reports from June 1996 through May 2002.
It also is alleged that the company did not regularly turn in the reports from Jan. 1, 2004, and July 1, 2007.
In November 2007 the Central Valley Regional Water Quality Control Board informed Riviera West Mutual Water that it was being assessed $3,945,000 in administrative penalties for failing to submit several years’ worth of monitoring reports, as Lake County News has reported.
Water board officials told Lake County News in early 2008 that according to the company’s permit requirements, it was to submit monitoring reports on the discharge of effluent from its drinking water plant.
Due to the proposed fine amount, Smythe said he and the board now are considering options that include declaring bankruptcy, dissolving the water company outright or convincing Lake County Special Districts to take over the water system.
Hearing still to be held
While the suggested fine currently stands at nearly $2.9 million, Ken Landau, assistant executive officer for Central Valley Regional Water Quality Control Board’s Region 5, said no fines have yet been finally assessed.
The Regional Water Quality Control Board had scheduled a February hearing in the matter, but new evidence was introduced shortly before hearing was to be held. That led to Landau and other staff suggesting the hearing be postponed in order for the evidence to be considered.
He said a new hearing date has not yet been set, but the matter is not on the board’s June meeting agenda. The board’s next meeting after that is in August.
“In terms of possible outcomes there are a number,” Landau said.
Landau said the board could decide that there were no violations and, as such, no fines would be assessed.
Alternately, the board could go with discretionary fines or rule the violations were significant enough to merit the full $2.8 million. He said it’s unlikely the board would assess fines higher than the $2.8 million.
Findings of some violations would be accompanied by mandatory fines, Landau said.
A 2004 change in state law requires mandatory fines for not complying with monitoring requirements. The California California Water Code establishes a minimum penalty of $3,000 for each 30-day period in which a report was not submitted.
While Landau said there could be a finding of no violations, Smythe does not appear to be prepared to make that argument.
“There were violations,” he said.
However, Smythe also faulted the state for not following its own enforcement policy, which requires that the state notify the discharger within a certain timeframe if it has incurred penalties of more than $30,000.
The new state law requiring mandatory minimum penalties went into effect in January 2004, and the same month Riviera West Mutual Water began accruing penalties, Smythe said.
“We didn’t submit their reports, there’s no question about that, but they didn’t follow their own policy, either,” said Smythe.
He said his predecessors on Riviera West’s water board attempted to negotiate with the state to get the penalties reduced “and they didn’t get very far.”
Smythe and his current board colleagues haven’t gotten very far, either.
He said they’re now facing a proposed penalty that’s nearly 10 times the water company’s annual income, which the memo for the Board of Supervisors puts at $345,000.
Riviera West’s water board is facing several options, including dissolving the company before the Regional Water Quality Control Board holds its hearing, said Smythe.
In that case, the state would have to go after all 505 property owners, with a per-parcel penalty estimated to be $5,700 or $11,600 per water connection, he said.
“They have said they won’t do that,” Smythe said.
Another option is to have Lake County Special Districts take over the system, but Smythe said, “I don’t think there’s a lot of interest there.”
Still another possibility is to dissolve the water company and let the California Department of Health Services – which regulates public water supplies – take over the water system.
“They can charge whatever they want,” and are not subject to rate increases or rules, Smythe said.
He added, “We’re basically in a no-win situation.”
A meeting of Riviera West property owners was held Thursday evening so the board could apprise them of the situation.
Smythe said only about half a dozen people showed up to hear about what the water company is facing, which he called “disappointing.”
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