Big Basin Water Company's promising deal to sell its water system falls through - KSBW Monterey

Big Basin Water Company's promising deal to sell its water system falls through

Central State Water Resources was anticipated to take over for Big Basin Water Company, bringing the possibility of a reliable water service for 1,200 customers into focus. But in an abrupt announcement made on Friday, the prospective buyer has backed out.

A solution to ongoing water problems involving Big Basin Water Company seemed to be on the horizon after the small, family-owned utility was placed into a court-appointed receivership earlier this month and a new permanent owner, Central State Water Resources, had been identified.

But on Friday, the prospective buyer made a surprise announcement: the deal is off.

In early October, a Santa Cruz County Superior Court judge approved a receivership of the Big Basin Water Company and appointed the law firm Silver & Wrights LLP as the receiver.

This means husband and wife, Jim and Shirley Moore, who own Big Basin, no longer have control over the water system and Silver & Wrights is temporarily managing and operating it.

"The State Water Board’s Division of Drinking Water sought receivership after the Moores demonstrated they were unwilling or unable to pursue solutions for ongoing problems in the company’s drinking water system," the State Water Resources Control Board said in a press release.

The receivership was finalized under the assumption the prospective buyer the Moore’s found, a Missouri-based private utility company called Central State Water Resources, would eventually take over as its permanent owner.

Preceding the receivership, Big Basin Water Company had two agreements with Central State Water Resources: to purchase the water system and to operate it while the sale was being finalized.

Central State subcontracted the California-based company Cypress Water Services to manage the water system directly, but on Friday some customers received the following message:

“Effective immediately, CSWR-California Utility Operating Company is no longer the service provider for Big Basin. This includes billing, customer service, maintenance, and all related water services and advisories."

The news came as a surprise to the receiver.

"We, along with all parties, state and county, were caught off guard by that abrupt termination," Nicolas Jaber, an attorney for Silver and Wright LLP, said.

Now the law firm Silver & Wright is left responsible with no buyer in sight.

"At this point, it (Silver & Wright LLP) is in possession and control of the system pursuant to the court's order. But our expectation, of course, is that there was an operator in place. That operator being Central States," Jaber said.

To keep water flowing for customers, Santa Cruz County Supervisor Bruce McPherson gave $40,000 from his discretionary fund to help Silver & Wright.

The receivership comes with no financial support.

"This funding should help get them through, maybe, a couple of weeks. It depends how the system is operated," Spokesperson for the County Jason Hoppin said. "But this buys us a little bit of time. We're calling this a footbridge until we can find a larger solution, a more permanent solution."

"At this point what's absolutely key to understand is that the receiver is in charge, but the receiver is still in the transition period given the surprising nature of the news and we are doing everything we can in this moment to formally take operational control of this system," Jaber said.

"The Moores are a key component of understanding the system. We still haven't received all information from the Moores and Central States. That's part of the problem here. The transition of a water company cannot happen overnight. And so at this moment what we're trying to do is gather all the information we need to transition into control," he said.

As the State Water Control Board points out, this receivership does not impact Big Basin Water Company’s wastewater treatment plant, which has had its own problems.

Big Basin's co-owner, Shirley Moore, said she and her husband are hands-off when it comes to both utility systems and pointed to their receiver Silver & Wright, who’s denied responsibility for the wastewater treatment plant.

Big Basin Water Company is a private utility company that has 540 connections serving about 1,200 people in the Santa Cruz Mountains and was solely managed and operated by the Moore family: Shirley, Jim and their son Damian Moore, who has since left the company.

For years, the utility provider has fallen short as its customers have repeatedly been without water for days at a time and have been under numerous boil water notices.

The private utility company has had issues delivering water since at least 2019, but those problems were exacerbated after the 2020 CZU Lightning Complex Fire destroyed its office and damaged the majority of its water system.

"Since 2019, the division has issued 11 enforcement actions for a variety of violations including failure to comply with cross-connection control requirements, failure to sustain sufficient source capacity, and failure to make necessary improvements to water tanks and other infrastructure," the State Water Resources Control Board said.

According to the neighboring San Lorenzo Valley Water District, which was previously considering absorbing the Big Basin Water Company, the water system needs about $40 million in repairs and upgrades to fall into state compliance.

Big Basin has repeatedly said it does not have the money or manpower to do so.

Silver & Wright LLP tells KSBW Big Basin Water Company customers should contact their office about any water service problems: (949) 385-6431.