FILE: Entrance to Diablo Grande, Calif., 2016.
Screenshot via Google Street View
Residents of a Central California community in jeopardy of running out of water have escaped being shut off, as a long-term settlement and agreement with their main water supplier has been worked out.
After years of unpaid bills and contentious back and forth, the Western Hills Water District and Kern County Water Agency said in a joint statement on Thursday that water service to the Diablo Grande development, about 30 miles outside Modesto, will continue.
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The agreement will also eliminate the development’s outstanding debt to the agency. “The existing $14 million obligation between WHWD and KCWA will be erased and will serve as consideration to resolve the outstanding dispute,” Mark Kovich, the water district’s board president, wrote in a letter Thursday to residents.
“The amounts owed by Western Hills to the Agency will be extinguished in connection with the overall structure of the deal once the Definitive Agreement is completed and the deal closes,” a spokesperson from the Kern County Water Agency said in an email Friday confirming the terms of the deal.
The surprise joint statement was released just days before the Kern County Water Agency threatened to enforce a May 31 shut-off deadline.
The statement described the deal as “a significant step toward the successful resolution of outstanding issues that had been the subject of extended negotiations and positions both agencies to move forward with confidence.”
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“This agreement reflects the commitment of both agencies to resolve outstanding issues and ensure that Western Hills customers continue to receive uninterrupted water service,” Eric Averett, general manager of Kern County Water Agency, said in the statement. “We are pleased with the progress made.”
FILE: Rio Bravo hydroelectric power plant, left, with the Kern River in the background along state Route 178 on Wednesday, Dec. 1, 2021, in Bakersfield, Calif.
Los Angeles Times/Getty Images
“The framework established between the parties helps ensure uninterrupted water delivery, addresses and resolves long standing issues that have existed between the agency and the district, and establishes a constructive path forward,” Western Hills board President Kovich said in the statement.
Diablo Grande is a planned community in the foothills of Stanislaus County. Initial plans for the development called for thousands of homes, six golf courses and even a hotel across 29,000 acres. What actually ended up being built was a scaled back version, with 600 homes and a golf course that has since closed down.
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The reason the build-out never occurred was water, or lack of it.
Early environmental impact studies on the development revealed water shortages. In 1992, the development was forced to form its own water services entity called the Western Hills Water District.
Since 2000, that district has relied on the Kern County Water Agency to deliver water via aqueduct. Their agreement, however, hit a massive roadblock last spring when representatives from the agency notified the Western Hills Water District that they would be terminating the water service contract on June 30 due to years of unpaid bills.
Residents were caught in the middle. “The dream was to move up here, someday retire, and play golf every day,” Katie Whitney, a Diablo Grande resident who moved to the development with her husband in 2012, told Moneywise last spring. “We’ve paid our bill. … How did we get here? How in the world did we get here?”
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FILE: Satellite view of Diablo Grande, Calif., 2025.
Screenshot via Google Earth
Lawmakers stepped in last spring to bridge the gap between the two entities to keep the development from going dry. “The Western Hills Water District (WHWD), which facilitates water supply to Diablo Grande residents, has faced severe debt at no fault of the residents,” Assemblymember Juan Alanis wrote to Gov. Gavin Newsom’s Office of Emergency Services last April. “I agree with the WHWD’s assessment that the financial problems primarily resulted from the actions of two former developers, and no significant action has taken place to alleviate the financial burden resulting from the community’s developers.”
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Last July, the Kern County Water Agency said it would continue to provide water service until the end of 2025, provided residents approved a massive water rate hike. The temporary agreement stretched on through this year, with the Kern County Water Agency eventually setting its May 31 deadline.
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And while a shutdown will not occur, Western Hills board President Kovich cautioned that there is still work to be done: “The Board intends to evaluate potential reductions to customer water rates,” he wrote in his Thursday letter to district customers. “However, it is important for customers to understand that any reductions are expected to be modest. The District continues to face significant financial responsibilities, including infrastructure maintenance, operational costs, capital improvements, and the need to rebuild financial reserves to ensure long-term water reliability and stability.”
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