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Homeowners in the Lake Berryessa Resort Improvement District could soon pay a $524 sewer bill every two months under a proposal to fix the ailing utility. They pay, on average, $92.50 every two months now.

The exponential increase -- which could be approved April 4 -- and the legal and administrative wrangling over it is the result of what county officials call a failing 40-year-old water and sewer infrastructure that will only cause more trouble if it doesn't get a $2.3 million makeover soon.

According to lawsuits filed by state and county officials, the small rural utility at the far northeast corner of Pope Valley has at least an eight-year history of accidental sewage spills and piecemeal equipment fixes.

The district is plagued by a $400,000 regulatory fine, a projected $186,000 debt and a lawsuit from the state Attorney General that could add another $2 million burden. County officials sued the state in February hoping to get the fine waived. Both cases are ongoing.

To make matters worse, county officials say the system recently discharged partially treated sewage into the Lake Berryessa watershed, an unintended event similar to one in 2005 that brought the $400,000 fine.

Berryessa Estates woes

Public works officials and the Board of Supervisors are beginning to hash out ways to get the district out of the hole it is in -- but every option involves substantial rate hikes for homeowners. The Board is under pressure from state regulators and the Attorney General to get tough fast. Proposed increases in water and sewer rates will rival the most expensive for small utilities in the region, with only a proposed water rate increase for an Angwin-area utility being higher.

Average water rates in the district would go from $29.10 to $82 per month. Sewer rates would go from $92.50 in a bi-monthly bill to $524. District homeowners already pay an additional $570 in utility taxes each year.

Matthew Garcia will be one of those asked to shoulder the burden.

Garcia moved in a few months ago, happy to find a house he could afford now that he works as director of public safety at Pacific Union College. He was unaware of years of history where the improvement district failed state standards and discharged sewage into the Lake Berryessa watershed. No more.

"The question mark that raises in my head is where did we get to be such a large problem and where does that responsibility lie," he said.

County Supervisor Diane Dillon, who represents the area, said part of that responsibility lies with county officials who approved the far-flung Berryessa Estates subdivision in the 1960s.

Today, homeowners there describe the 351-parcel subdivision as an affordable bedroom community for Angwin.

"You can't get a house in Angwin to purchase," Berryessa Estates homeowner Sandy Sargent said. Sargent is also the director of health services at PUC. She said her job brings her into contact with district residents less well off than she is.

"I look at people that are going to need some subsidy," she said.

That predicament is something county officials want to avoid. Dillon said there's little knowledge of who might need such help or even how many families live in Berryessa Estates. Information like that would be crucial for the board to make a decision about the impact of the rates.

"I'm extremely concerned about it," she said.

Going south?

County officials are looking at options to shield residents from some costs of the rate increase, either by having the residents pass a special tax, get the $400,000 fine attributed to part of the cost of fixing the utility's equipment, or both. Dillon said the utility might be able to find a way to charge owners of undeveloped parcels.

"If this system is to be rebuilt it should not be on the backs of the ratepayers," she said.

Yet officials said they find themselves under the gun to do something fast, or negotiations with state regulators could go south before they begin.

"We've been criticized by the Regional Water Quality Control Board and then by the Attorney General's office that we're not willing to take action," Dillon said. Working with them, she said, is "critical to our success."

State regulators did not return phone calls requesting comment.

Napa County Public Works Director Bob Peterson said state regulators have recently been unmoved by the utility's troubles.

"We tried to argue that we needed time to work with the community because you can't just raise rates like that and expect it to go over very well."

Regardless of negotiations, he said, ultimately the utility needs an infusion of cash to pay off a capital improvement loan it needs to fix its equipment.

"What happens next year if we get a heavy rain and we haven't solved this problem?" Peterson said. "We don't know what the fines are going to be."

John Hallman, a Berryessa Estates homeowner, said he agrees, but he wants homeowners to have some say in the rate increase.

"It's not going to be good no matter how it ends up," he said. "But maybe we can make it a semi-win situation."