Water rates dilemma engulfing Berryessa Highlands

District engineer with Napa County Public Works Christopher Silke checks on the raw sewage basins at the waste water treatment plant near Lake Berryessa.

Josh Hinds checks that all online systems are working at the waste water treatment plant near Lake Berryessa in Napa on Tuesday, May 30.

Waste water treatment pools are seen in the foreground with Lake Berryessa in the background on Friday, May 19.

Josh Hinds a contractor for the county checks on the air blowers for the membrane filtration system at the waste water treatment plant near Lake Berryessa in Napa on Tuesday, May 30.

District engineer with Napa County Public Works Christopher Silke walks through the waste water treatment plant near Lake Berryessa in Napa on Tuesday, May 30.

Berryessa Highlands faces hard math when it comes to running the water and wastewater systems needed for this small, remote community near Lake Berryessa to survive.

Residents pay an average of $4,220 annually for these vital services, more than twice as much as what a city of Napa resident might pay. Yet the systems face red ink and require upgrades.

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The obvious solution is raising rates. But a proposed $2,500 annual boost is proving to be a non-starter with both residents and Napa County, leaving the situation up in the air. The county Board of Supervisors is to discuss options on June 27.

All Napa County taxpayers have a stake in this. The county is poised to loan the Highlands system $1 million, on top of $2.8 million the county has already loaned over a decade.

There are reasons for hope — an adjacent resort could open in a few years to shoulder some of the system costs. More Highlands homes could be built. Federal and state grants might pay for needed wastewater and water system improvements.

Meanwhile, some Berryessa Highlands residents worry about the present.

"It's sad," said Bob Bacinett , who moved to the Highlands from Dixon in 2007. "We bought up here so we can retire. We probably won't be able to stay."

Rising costs

Berryessa Highlands began in the 1960s as a kind of paradise on hills overlooking Lake Berryessa. The idea was people could enjoy the good life out here in a what amounted to a resort setting along a reservoir 26 miles long and 3 miles wide. Today, it has about 250 homes.

But there's trouble in paradise.

Bacinett has seen his fire insurance rise to $6,000 annually with a $45,000 deductible. Now he faces rising water and wastewater costs on a fixed income.

"It's at the point, are we trying to force everybody out of here?" he said. "With the fire insurance and everything going on here. It's just another thorn in our side."

Russ Cunningham has lived in the Highlands for five years after a lifetime of visiting Lake Berryessa. He too wonders if he’ll be able to afford to stay.

"What you have to understand is, you’re driving people out of these communities…we’re being hit from every direction," Cunningham said.

It's a common story for small water and wastewater systems in California. Aging equipment must be replaced, state and federal standards must be met and there are only a few hundred customers over which to spread the costs.

The state Water Resources Control Board has identified more than 300 water systems in California that fail to meet drinking water standards, usually because of costs. Despite its economic woes, the Berryessa Highlands system is not on the list, though it is listed as "potentially at risk."

Christopher Silke, engineer for the Napa Berryessa Resort Improvement District, described some things that exacerbated the problems for the Berryessa Highlands wastewater and water systems.

A blow came in 2008, when the U.S. Bureau of Reclamation closed and later razed the old Steele Park resort near the Highlands so it could be renovated, something that has yet to happen. Only a camping/RV version of the resort is open today. The old resort used and paid for water and wastewater services equivalent to 228 homes.

Another blow came in 2020, when the LNU Lightning Complex Fire burned about 100 Highlands homes, leaving about 250. All of this meant fewer customers to spread the water and wastewater system costs among.

The district for 2022-23 is expecting revenues of less than $800,000 and expenses of more than $1.2 million, in part because of the need to make repairs in the wake of last winter's large storms.

Napa County has tried to help. The county Board of Supervisors sits as the Napa Berryessa Resort Improvement District Board of Trustees that runs the systems.

The county since 2009 has loaned the district $2.8 million. County Public Works Director Steven Lederer said more is needed to balance this fiscal year's budget and keep the district from going bankrupt.

In fact, district staff wants another $1 million loan from the county to also cover some of the operations and maintenance expenses for the coming fiscal year as well, buying time to find that elusive solution to the financial woes.

Whether the county will keep loaning money indefinitely to the Berryessa Highlands water and wastewater systems is another question. At this point, it's unclear when and if the loans will be repaid.

"So the question becomes, why are we subsidizing the water and wastewater of these residents and not other residents who likewise are feeling economic pressures?" county Board of Supervisors Chairperson Belia Ramos said at the April 18 board meeting.

Supervisor Alfredo Pedroza has the Berryessa Highlands area in his supervisor district.

"I do believe the county has been a good partner with the residents of Berryessa in trying to minimize any cost impacts," Pedroza said. "But we’re at a point where we can't keep doing what we’re doing."

Reasons for hope

There are possible silver linings.

One is the hoped-for rebirth of the old Steele Park resort as a new Steele Canyon resort, possibly with a marina, glamping, dining and retail. The county stepped in to jumpstart the Bureau of Reclamation's unsuccessful renovation attempts and in 2021 identified Sun Communities as a possible, new resort operator.

Sun Communities is doing the environmental studies for the project, county Concessions Manager Leigh Sears said. Construction could start in 2024.

"It's not a panacea by any means," Lederer said. "But it is a piece of it."

Another piece is the rebuilding over time the homes burned in the LNU Lightning Complex fire, providing more customers to pay for the water and wastewater systems.

Still another possibility is doing a household income survey that would establish Berryessa Highlands as a disadvantaged community. Silke said such status would open the doors to grants for the water and wastewater systems.

Berryessa Highlands failed to qualify when the county did a survey about five years ago, given its average income was too high. Napa County will see if anything has changed.

Meanwhile, the county is considering options for Berryessa Highlands water and sewer customers. Customers on average pay $2,880 annually in water and sewer rates, plus a $1,100 annual assessment related to a federal loan, plus a $240 annual fee.

The county estimates an 89% rate increase is needed. But that comes to an average annual increase of more than $2,500 and appears to be off the table.

One option still being looked at combines a 53% rate increase with an $800 annual fee on developed parcels and $400 fee on undeveloped parcels. Another simply calls for a $1,180 annual fee on any parcels.

Neither idea was met by enthusiasm when county officials explained the situation to about 14 Berryessa Highlands residents attending a May 9 community meeting at Lake Berryessa.

"We understand," Cunningham told county officials. "You have a shortfall. We have a shortfall, too."

Bacinett agreed.

"You’re saying you can't pay your bills. Neither can I," he said.

Pedroza told the residents he understands their plights and that the county is all ears if there might be another option. He alluded to the financial figures projected on a screen.

"But that is the unfortunate truth," he said. "We’re not hiding it."

Resident Stu Williams can see a light at the end of the tunnel, with the resort rebirth planned and an economic survey possibly paving the way for more grants. But in the meantime, Berryessa Highlands must still get through the tunnel.

"It's a very difficult situation that's going to have to be dealt with," he said.

Ironically, the sewer and water systems that are such a sore point for Berryessa Highlands today were selling points at the subdivision's birth in the mid-1960s.

What amounts to advertising copy in the May 5, 1966 St. Helena Star described the lots available for as low as $3,090 at the Highlands. It described a 1,500-acre wooded peninsula as a destination for Bay Area and Sacramento-area weekenders.

"Lot owners at Berryessa Highlands will enjoy such conveniences as full underground utilities, engineered sewer and water systems and wide paved roads," the story said.

But the article also mentioned up to 2,000 lots, which would have meant a lot more homeowners supporting those sewer and water systems. Other reports have Berryessa Highlands ultimately having as many as 4,000 homes.

Like the mention of a lakeside golf course, that vision of a much larger Highlands never came to be.

Graduating Justin-Siena students gather before a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena students smile as they embrace a faculty member at the conclusion of a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Justin-Siena students smile as they walk past friends and family after receiving their diplomas during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

A graduating Justin-Siena student wearing sunglasses that say "Senior" on them smiles during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena students move their cap tassels from the right to the left after receiving their diplomas during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Friends and family cheer as they hear the name of a graduating Justin-Siena student during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Justin-Siena Senior Valedictorian Gabrielle George addresses the crowd during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

A graduating Justin-Siena student receives their diploma during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena students toss their caps in the air at the conclusion of a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena students line up before a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena Senior Hunter Bledsoe, center, smiles before the start of a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

An attendee takes a photo of graduating Justin-Siena students during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Justin-Siena Senior Mackenzie Kawashiri delivers the salutatory address during a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

Graduating Justin-Siena students line up before a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

A scene from the Justin-Siena High School graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

A graduating Justin-Siena Senior smiles as he greets his parents at the conclusion of a graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

A scene from the Justin-Siena High School graduation ceremony held on the Justin-Siena campus in Napa on Thursday, June 1.

You can reach Barry Eberling at 707-256-2253 or [email protected]

Berryessa Highlands Highlights

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Napa County Reporter

Barry Eberling covers Napa County government, transportation, the environment and general assignments. He has worked for the Napa Valley Register since fall 2014 and previously worked 27 years for the Daily Republic of Fairfield.

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