Lois Henry

Sunday, Sep 30 2012 02:00 AM

LOIS HENRY: Oildale water brawl heats up as the election nears

By Lois Henry

The simmering feud between Oildale's Siamese twin water districts is in full boil-over mode as both sides gear up for the coming election.

Back in June, I wrote about the increasing tensions between Oildale Mutual Water Company and the North of the River Municipal Water District (NOR), which had culminated in a lawsuit by Oildale Mutual.

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I thought things were bad then. Boy, was I wrong.

In the ensuing three months, the lawsuit has spawned a cross complaint by NOR for false accusations.

Both entities have stepped up their propaganda war, which started with monthly newsletters and has grown to include fliers, fact sheets and websites.

Now, Oildale Mutual is openly and heavily backing three candidates for NOR's board of directors. (You can find out more from Oildale Mutual's website, which has a button labeled "ReformNORWater.")

Much as I love a good bare knuckler between normally under-the-radar water agencies, this is only going to hurt customers. Lawyers don't come cheap, ya know.

The only thing I can think of is that customers should get together and demand the agencies mediate. Perhaps consumers could get the Attorney General's office involved, or one of our local legislators -- heck maybe even Dr. Phil -- to add a little oomph to their demand.

Both Oildale Mutual and NOR have said they want to solve their differences amicably and outside of court. Specifically, they've both said they're open to talking about consolidation, which is clearly the only way to go.

Here's the catch: They say they're open to talks but no one's talking.

Instead, Oildale residents -- who just want water out of their taps -- are being bombarded by scary and confusing mailers each claiming the other side wants to "hijack" the other's water service and calling each other's actions wasteful, scandalous and disturbing.

At least one mailer I've seen comes very close to crossing the line prohibiting public agencies from involving themselves in elections, but more on that in a bit.

First, let's get the lay of the land.

Oildale Mutual is a private, nonprofit company founded in 1919 to provide drinking water to Oildale. By the 1960s, it was clear the growing population couldn't rely on groundwater alone.

So, in 1969, NOR was formed overlying essentially the same boundaries as Oildale Mutual and another water company, Highland Knolls.

As a public agency, NOR collected property taxes and could float bonds to buy state water man build tanks, pipes and other facilities to supply Oildale Mutual and Highland Knolls, who then supplied customers.

NOR was the wholesaler and Oildale/Highland were the retailers.

Then in 1981, NOR took over Highland Knolls and got into the retail business.

That's where things went south.

Running retail and wholesale operations created a confusing billing system and eventually Oildale Mutual accused NOR of using wholesale money to fund its retail side. Oildale Mutual sued and in 1993 the two entered into a settlement agreement that outlined how they would work more cooperatively in the future.

Didn't happen.

Oildale Mutual began raising many of the same questions and complaints starting in 2005 and felt NOR was not forthcoming with information. NOR said it tried to work with Oildale Mutual to true up bills but that the company was never satisfied and refused to be pinned down on what, exactly it wanted.

NOR's case wasn't helped by revelations that the district OK'd numerous overseas junkets for its former general manager, among other questionable expenses. Either way, Oildale Mutual sued.

And now, here we are watching two water entities that, frankly, can't exist without the other, locked in a mutual chokehold. Talk about your toxic relationships.

So, back to the present.

I spoke with several of the candidates for NOR's board of directors, both those backed by Oildale Mutual and others, including one incumbent NOR director. They all seem like honest people, genuinely interested in being on the board so they can help make sure residents get a good service for a fair price.

There wasn't a crazy zealot or wildly unqualified person among them. Sorry, Oildale, you're going to have make your own picks.

I don't have a problem with Oildale Mutual backing candidates. It's a private company and has every right to engage in the political process. And it's not like it's hiding its support.

I do have a problem with at least one flier put out by NOR, which is a public agency and should stay out of elections.

The August 31 flier went to NOR's retail customers with bills and is on NOR letterhead. It notes Oildale Mutual's support of the three candidates.

"If they are successful, Oildale Mutual will use their new majority to hijack your water service from the District," the flier states.

It doesn't say, "Vote for X," or "Don't vote for X." But it comes uncomfortably close.

For his part, NOR's General Manager Dave Aranda speculated that if the Oildale Mutual-backed candidates win, it could create a conflict of interest.

Such a majority would be able to settle litigation in Oildale Mutual's favor, which could conflict with their fiduciary duty to NOR residents, Aranda said.

Oildale Mutual General Manager Doug Nunneley countered that the candidates aren't under mind control by Oildale Mutual. Besides, he said, given the nearly identical boundaries of both districts, Oildale Mutual customers are also NOR constituents so the NOR board has a duty to represent everyone.

See? Two sides of the same coin.

Someday soon, both are going to have to face the immutable truth made famous in the "Highlander," films: "There can be only one!"

Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or e-mail lhenry@bakersfield.com

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