Water bill jumps 300% for gated California community

Entrance to Diablo Grande, Calif., 2016. (Screenshot via Google Street View)

It may sound like an end-times warning for California about the existential risk of building megadevelopments in places where water is scarce - but in one Central California community, the worst fears of running out of the precious resource have become a reality.

And, even in a best-case scenario, there seemingly is no solution except for one that is both temporary and unfathomably expensive.

Diablo Grande is a planned community in the foothills of Stanislaus County, about 30 miles southwest of Modesto. The community was initially approved for construction on 29,000 acres in the early 1990s and was dreamed up as a massive project featuring thousands of homes, half a dozen golf courses and even a hotel. A scaled-back version of the plan was ultimately built - featuring 600 homes and a since-shuttered golf course - and the grand vision of Diablo Grande never came to fruition. 

Why? Even in its earliest days, environmental impact studies voiced concerns about water scarcity that led to the development forming its own water service entity, the Western Hills Water District, to supply it with the necessary resource in 1992. 

Since 2000, that water district has relied on water pumped from the Kern County Water Agency some 200 miles south. But this agreement hit a roadblock in early April when representatives from the agency notified officials for the Western Hills Water District that they would be terminating the water service contract on June 30 due to years of unpaid bills. 

FILE: The Kern River flows west of Bakersfield, Calif. (David McNew/Getty Images)

This decision, at least in part, is a reflection of financial troubles that have plagued the development for more than a decade, starting with when the original developers went bankrupt in 2008, which resulted in the sale of Diablo Grande to World International LLC for a mere $20 million. 

And yet, even after the development changed hands and the residents took over management of the water district in 2020, the Kern County Water Agency maintains things did not get better. It now says it's owed some $13.5 million in back pay for water supplied to Diablo Grande, forcing at least one California lawmaker to get involved. 

"The Western Hills Water District (WWHD), 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 with regard to the dire issue plaguing the development on April 8. "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."

Following an exchange of emails between the two water district heads in June, it was determined that Diablo Grande residents needed to approve a dramatic water rate increase: $569 monthly, up from $145, about a 300% increase, by the end of June or risk being cut off entirely. 

"We're on a shoestring here," Mark Kovich, president of the Western Hills Water District board, told KXTV-TV last week. "I can barely keep this district running."

Satellite view of Diablo Grande, Calif., 2025. (Screenshot via Google Earth)

Late last week, the Kern County Water Agency said it would continue to provide water service until the end of the year provided residents approved the water rate increase. "The Agency had previously granted a conditional extension through December 31, 2025 pending the outcome of the Proposition 218 rate hearing but determined the shorter unconditional extension was warranted in light of the short time between the June 28 rate hearing and the June 30 deadline," Kern County Water Agency wrote in a released statement which was obtained by SFGATE on Monday. "If Western Hills' proposed rate increases are approved without a majority protest at the June 28 rate hearing, then the December 31 deadline will remain in effect."

The rate hike was approved Saturday, which, including fees, will raise most households' water rates to about $600 a month, effective July 1.

In the wake of Saturday's decision, water district board president Kovich told the Modesto Bee that the district received 14 protests and two invalidated protests during the Prop. 218 process, which ensures "all taxes and most charges on property owners are subject to voter approval." The majority of residents did not protest the rate hike prior to its approval. 

And while the district board members Saturday said they will explore other water sources, including testing water from a nearby private well to provide water long term, the reality for Diablo Grande residents - many of whom are retirement age and live on a fixed income - is the dream of manufactured paradise in the middle of an arid part of California now comes with an extreme cost and extreme uncertainty. 

"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. "We've paid our bill. ... How did we get here? How in the world did we get here?"

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