The county’s special district’s division is proceeding with the second phase of improvements to the Cedar Glen Water system in the San Bernardino Mountains, despite questions about whether underlying inadequacies of the system have been redressed.
The county in 2009 initiated the first phase of improvements to the area’s water system. That phase included the drilling of a well off of Coulter Drive where there was then no electricity to operate a pump. The special districts division subsequently entered into discussions with Southern California Edison to extend electrical service to the area.
Phases II and III are to consist of continued improvements, including the replacement of existing water storage facilities with additional steel water storage reservoirs; construction of a new domestic water well; and replacement of approximately 7.7 miles of existing distribution pipeline to bring the Cedar Glen water system into compliance with the California Safe Drinking Water Act and California Department of Health Services requirements.
There is some concern among Cedar Glen ratepayers that the well located on the southern boundary of the San Bernardino National Forest is being built to benefit developers and that current residents will bear the cost.
The community of Cedar Glen was provided with water service by investor-owned Arrowhead Manor Water Company (AMWC) until May of 2003, when the company went into receivership.
Five months later, in October of 2003, the community was devastated by the Old Fire, which burned over 300 homes. Based on the disaster, the San Bernardino County Board of Supervisors created the Cedar Glen Redevelopment Area on November 23, 2004.
The board approved a loan from the county general fund in the amount of $800,000 for a proposed improvement zone on June 7, 2005 and shortly thereafter, an improvement zone was formed by the county under County Service Area 70 to provide water to the residents of Cedar Glen to be governed by the San Bernardino Special Districts Department (SDD).
On November 15, 2005, before the county had even purchased Arrowhead Manor, the county submitted an application for funding to the California State Department of Housing and Community Development for a Community Development Block Grant (CDBG) through the United States Department of Housing and Urban Development.
In February 2006, the county of San Bernardino was provided with $3,091,270 in federal Community Development Block Grant funds as part of a disaster recovery initiative to pay for the proposed repairs to the water system in the Cedar Glen community.
The board of supervisors approved purchasing Arrowhead Manor Water Company for the price of $305,000 through the court appointed bankruptcy receiver on October 17, 2006. The county finalized the purchase on January 28, 2009.
Shortly after the purchase of the water company, Phase 1 of the water improvements funded by the CDBG funds began.
At a meeting of the Cedar Glen Redevelopment Project Area Committee on April 24, 2009, special districts director Jeff Rigney said 14,000 feet of water line had been completed, a well had been drilled and they were repairing a water tank.
Many Cedar Glen residents believe they are being overcharged for the water service they are receiving.  Shortly after Arrowhead Manor was placed into receivership in 2003, water rates were raised over 400 percent. The county borrowed $800,000 to acquire the water company and its assets and to make necessary improvements to it. $305,000 of that loan money was used to buy Arrowhead Manor. By 2008, the loan principal, penalties, and interest had risen to approximately $2,000,000.
At present, the $800,000 loan is not being repaid, but local water users are still paying greatly inflated prices for water.
In 1980, the owners of the Arrowhead Manor Water Company, Ernie and Jean Schoettmer, were awarded $910,510 pursuant to the Safe Drinking Water Bond Act. The money the Schoettmers received was supposed to be used to build a pump house, a water tank and pipelines off of Balsam Ave. in Cedar Glen and put in 8-inch pipelines on Juniper Drive, Maple Drive and Pineridge Drive.
Engineering for that work was done by Albert Webb and Associates and the final permits were signed off at the time by what was the county’s Department of Transportation and Flood Control in 1982.  Though a notice of completion was sent to the Department of Water Resources stating that all work had been completed, a large portion of the work, in fact, was never finished. There are major discrepancies between the systems in the ground and documents pertaining to the project contained in county files. Members of the board of supervisors have not themselves nor detailed their staff members to make a survey of the actual systems and have relied upon the erroneous documentation.
The phase of improvements begun in 2009 obscured that pipes were not laid in 1981 and the money diverted elsewhere. County special districts employees acknowledged  in a preliminary system evaluation dated July 20, 2004 that “Based on conversations with Mr. Darel Davis (the engineer hired by the receiver), 6 & 8-inch piping installed was not installed correctly and needs to be replaced.” However, in Davis’s official report to then-special districts director Thomas Sutton a month earlier on June 17, 2004, the defective or missing pipe was not mentioned.
Documentation indicates that the county confirmed that two miles of pipe were laid using money provided by a California Department of Water Resources Loan that was supposed to provide for the  laying of over 14 miles of pipe.
In July of 2002 the Public Utilities Commission made Decision 02-07-009, stating that Arrowhead Manor was found to “have improperly diverted Safe Drinking Water Bond Act surcharge funds…” and ‘The Commission concludes that all penalties imposed by the California Department of Water Resources (DWR) on Arrowhead for failure to make timely loan payments are Arrowhead’s obligations under its DWR contract and are not recoverable from ratepayers.’ Further in Resolution W-4407 dated July 10, 2003 when the PUC reinstated the Safe Drinking Water Bond Act surcharges, it also stated “As a condition of re-establishing the Safe Drinking Water Bond Act surcharge, the decision put Arrowhead on notice that it would be held responsible for refunding or applying on behalf of customers any surcharge revenues not applied to repaying the loan.” Though the surcharge was reinstated in July of 2003, two months after the Superior Court appointed John Richardson as the receiver of Arrowhead Manor Water, from that time nothing was paid to the Department of Water Resources.
In January 2009 bills sent to Cedar Glen residents included a $504 Safe Drinking Water Bond Act surcharge.  In February 2009, a facilities charge showed up on those bills for the first time for $17.35. In April 2009, the facilities charge grew to $36.60. In August 2009, the facilities charge grew again to $123.60, which now appears on each statement.
While Cedar Glen residents are being socked for higher water rates, some of them are clamoring for all of the money collected by the court appointed receiver and the Special District since 2003 to be refunded to the residents of Cedar Glen because that money was never paid to the Department of Water Resources.
The county did not provide legal notice to residents that there would be a facilities charge.
While ultimately the board of supervisors signed off on the billing policy, none of its members has evinced knowledge or understanding of the circumstances related to the previous history of the water system under Arrowhead Manor’s management.  Some Cedar Glen residents continue to maintain that the county and the board of supervisors, which authorized using taxing authority to collect water bills more than two years ago, are bound by Public Utilities Commission Resolution W-4407, which stipulated the conditions of the reinstatement of the surcharges and that the county must repay every resident in Cedar Glen all surcharge monies collected since July 10, 2003 or drop the surcharge payments altogether.