15 May 2008

Abuse of Water Rights

In this op/ed, Kathryn Gray laments the actions of
Royal Gorge LLC, the bay area consortium of developers who purchased Royal Gorge Cross Country Ski Resort... [that] actively opposed an ordinance, and a resolution, now passed by the Sierra Lakes County Water District (SLCWD) to prioritize service, and to set a "basement" level for Serene Lakes' drawdown that they will endeavor not to go below.


Royal Gorge LLC, represented by not one, but two law firms, and a water consultant, had flooded SLCWD with arguments, both written and oral, as to why, among other things, SLCWD shouldn't consider environmental and aesthetic concerns when passing ordinances and resolutions. Homeowners, by and large, came away from water board meetings with the feeling that there was no depth too low for Royal Gorge LLC when it came to procuring water to enable them to build up to 1000 units on what is yet still a world class cross country ski resort.


Royal Gorge LLC will not contract to provide these Big Bend neighbors water that they now desperately need. Royal Gorge LLC has chosen instead, to sell water to Granite Construction Company [GCC] to be used to dampen down dust on the construction job on HWY 80. Yes, you read that correctly - instead of providing water, at a fee of course, to neighboring cabins who have a pressing need for potable water, they've opted to sell pure, clear spring water to dump on the freeway.
I am sympathetic to this opinion, but I wonder how it is that homeowners cannot outbid GCC for drinking water (given that GCC is willing to use recycled water). Royal Gorge is clearly pushing to maximize revenue from its rights, but its exercise of sovereignty appears to exceed "community standards" -- and perhaps the original intention of those who created the rights.

Bottom Line: Property rights are a two-edged sword -- if they are strong, owners have an incentive to invest in maximizing their value, but maximizing value does not always pass the "smell test" for good water allocation. If they are weak, then the resource can be destroyed in the ensuing fight over appropriation.

This case is probably more complicated than it appears to be at first glance. Or isn't it? Please comment.