Officials with the Sheep Creek Water Company are gamely attempting to reignite interest among members of the Phelan Piñon Hills Community Services District Board of Directors in a merger between the two water purveyors.
The Phelan Piñon Hills Community Services District, after considering a consolidation/structured takeover of the company, rejected just such a proposal in August 2019.
The Sentinel has learned that the redoubled effort to bring the Phelan Piñon Hills Community Services District to the table once more has involved elements of California’s state government, which Sheep Creek Water Company officers hope will convince district officials that there is adequate protection in a takeover arrangement for the community services district.
An issue for the Sheep Creek Water Company is that it is entirely dependent on nature for its water supply drawn from multiple groundwater wells and a spring that naturally flows from a tunnel in the San Gabriel Mountains near Wrightwood. The recharge of the aquifer its wells tap into consists primarily of rainfall and snowmelt.
The drought that began in 2012 and depleted the water table in earnest by 2016 created a crisis for the company. In August 2018, the State Water Resources Control Board prohibited the Sheep Creek Water Company from making additional water connections until the company is able to establish that its water reserve levels meet state standards. Importation of water from the State Water Project is out of the question, as the cost of conveying that water from the California Aqueduct through a pipeline would involve costs the company could not bear.
On April 29, 2019 the Sheep Creek Water Company’s consolidation committee met with the Phelan Piñon Hills Community Services District’s engineering committee to begin discussions of possible consolidation of the two water systems. The Phelan Piñon Hills Community Services District’s committee members requested that the Sheep Creek Water Company put together a precise plan laying out the terms of such a consolidation. In accordance with that request, the Sheep Creek Water Company’s consolidation committee complied, preparing a plan that was submitted to the Sheep Creek Water Company’s board. The board in relatively quick order approved forwarding the plan to the Phelan Piñon Hills Community Services District.
The plan included an appraisal report of the Sheep Creek water system and its related assets, which were valued at $23,850,000.
Privately owned Sheep Creek Water Company services 1,183 connections and roughly 4,000 residents in a district that includes Phelan and Pinon Hills. It has six wells and seven large above-ground tanks. The company has water rights allowing it to draft up to 3,000 acre-feet of water annually.
Phelan Piñon Hills Community Services District, determined that despite the company’s assets, its ability to meet the growing water needs of its customers and service area would be challenging. The district rejected Sheep Creek Water Company’s proposed consolidation plan as drafted and made no consolidation proposal of its own on different terms than were contained in the plan.
With no prospect for the merger, the Sheep Creek Water Company board immediately moved to explore getting clearance to engage in aggressive well drilling.
In an effort to convince the Phelan Piñon Hills Community Services District to reconsider a merger, the Sheep Creek Water Company is networking with the State Water Resources Control Board, the California Department of Financial Assistance, the Infrastructure Engineering Corporation and the California State Office of Water Programs in Sacramento. The Infrastructure Engineering Corporation is now writing up a draft resource management plan to be submitted to the Phelan Piñon Hills Community Services District as part of a new consolidation proposal.
Meanwhile, the company has made applications for extending its timeframe for drilling more wells, and company officials are hoping that with more wells in the company’s inventory and support from the state, the Phelan Piñon Hills Community Services District will see the acquisition of the water company and its assets as worth pursuing.
-Mark Gutglueck