Diablo Grande water provider challenges $14M debt claim

Got story updates? Submit your updates here. ›

A long-running dispute over water deliveries to the Diablo Grande community in western Stanislaus County has escalated, as the Kern County Water Agency says negotiations with the community's water provider, Western Hills Water District, have stalled over a $14 million debt. Western Hills disputes the agency's characterization, saying negotiations remain ongoing and that the current board inherited the financial situation after taking office in 2022.

Why it matters

The dispute highlights the complex water delivery contracts and financial obligations that can arise from large-scale residential developments, especially when growth doesn't meet original projections. The outcome could have significant impacts on water rates and availability for Diablo Grande residents.

The details

Kern County Water Agency says Western Hills Water District is more than six years behind on payments and has received water "at no cost" during that period, with catch-up payments beginning only recently. Western Hills says the debt traces back to a contract signed roughly 25 years ago when Diablo Grande was planned as a large residential development with thousands of homes, but only about 600 were ultimately built. Western Hills remains under contract to purchase up to 8,000 acre-feet of water annually, even though it doesn't use that much.

• The debt traces back to a contract signed roughly 25 years ago.
• Payments to Kern County Water Agency stopped in 2019 under prior Western Hills leadership.
• The current Western Hills board took office in 2022.

What they’re saying

What’s next

Western Hills Water District plans to host a public meeting for residents this week to provide an update on the negotiations with Kern County Water Agency.