A dispute over a Cambria CSD well on school district property leads to eminent domain threat 

For more than two decades, a well on Coast Union High School's property has produced water for the residents of Cambria—up to 20 percent of the town's water supply annually, according to the Cambria Community Services District (CSD).

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• File Photo By Jayson Mellom
• WATER SITUATION Cambria's water situation is complex, involving wells that pull water from the San Simeon Creek Basin, a water reclamation facility (pictured) that still needs a permanent development permit, and a well on Coast Union High School property.

But a disagreement over renewing the contract for a long-standing easement put the CSD at odds with Coast Unified School District. Recently, the CSD threatened to take the well, its associated infrastructure, 2.39 acres of Coast Unified School District property, and a school district irrigation well through eminent domain.

"Our ultimate goal has always been to go to mediation to settle this outside of the aspect of condemnation," CSD General Manager Matthew McElhenie said during the April 11 CSD board meeting. "This is just part of the process as a last resort and [to] have it ready."

While the CSD board was scheduled to vote on whether to approve the eminent domain proposal during its April 11 meeting, staff pulled the item from the agenda due to an April 10 letter from attorney Christopher R. Guillen, representing the school district on behalf of the firm Brownstein Hyatt Farber Schreck. CSD board President Tom Gray said the CSD wanted to take the time to "meaningfully address" the school district's objections, adding that the two parties were meeting on April 24 for mediation.

The letter said that the school district has a long history of helping the CSD "in its time of need" and the two parties operated under a "mutually beneficial" agreement until the most recent contract extension expired in September 2023.

"Rather than negotiate a new contract, CCSD has initiated the preliminary steps necessary to take the subject property into condemnation, including make an offer to purchase and requesting the board adopt a RON [resolution of necessity]," the letter states. "This board cannot make a finding that the public interest and necessity require the project take a fee interest in Coast's property."

The board took public comment on the issue at the meeting, and speakers questioned why the two entities were unable to come together on a solution. Some fell on the side of the school district while others supported the CSD. Cambria resident Dave Fiscalini said he didn't believe the CSD could make findings that supported a resolution of necessity.

"You have other ways to get water," he said.

In 2000, the CSD detected a plume of methyl tert-butyl ether (MTBE), a fuel additive, in its groundwater supply thanks to leaks from a Chevron gas station that was within 700 feet of two of the CSD's water wells, according to a 2004 cleanup and abatement order from the Central Coast Regional Water Quality Control Board. The water board forced the CSD to close those two wells and find an alternate water source.

By December of 2000, the school district had agreed to allow the CSD to drill a well—SR4—on the property near the high school athletic fields and granted access to use that well and its associated infrastructure for a fee of $26,000 per year for the first 10 years or until the MTBE plume was remediated, according to the April 10 letter.

By November 2001, the "new temporary high school well had been connected to the Cambria municipal drinking water supply. The CCSD needs the high school well as an alternative water supply," according to a 2009 water board staff report. Chevron was still in the process of cleaning MTBE out of the town's water supply.

In 2012, despite the MTBE plume being remediated, the school district and the CSD renewed their easement agreement for SR4, increasing the CSD's cost per year to a little more than $34,000 with an annual adjustment aligned with the consumer price index, Guillen's April 10 letter stated. While the two parties did negotiate an extension to the 2012 agreement, that agreement ended in September 2023 after negotiations broke down.

A couple of the CSD's sticking points are the cost of the lease agreement—McElhenie told New Times via email that the district has paid more than $765,000 to Coast Unified since 2000—and not wanting "to renegotiate every 10, 20, or even 100 years for such a critical part of our water portfolio."

Initially asking for $86,000 per year to renew the contract, according to the CSD's April 11 staff report, the school district gradually came down to $26,000 per year for a 10-year or 99-year contract.

"It is both grossly inequitable and untenable to continue to pay rent for temporary rights to use the well facilities in perpetuity, which at this point, serves only as profit generation for CUSD [Coast Unified School District]," the staff report states. "Under temporary agreements, CUSD can simply refuse to renew, and demand that the district remove the well facilities and/or cease their use."

The CSD said it had the property appraised last year, and its value came back at a little more than $151,000, which it offered to the school district and would pay if it took the property.

"Once we were made aware of the actual value of the well facilities property, it became impossible for the CCSD with its fiduciary duty to the ratepayers, to pay anything close to what the CUSD was asking. It would essentially be a gift of public funds," McElhenie told New Times. "Having already paid over five times the current fair market value over the past 24 years, it made it even more clear that the CCSD must pursue purchasing either the property or a permanent easement."

Who owns SR4 and its associated infrastructure (water treatment facility and pipelines) and how necessary the well is for the CSD's water supply are also an issue. McElhenie said the CSD owns it and SR4 is "an absolute necessity" during the dry season and due to the current status of the district's potable water infrastructure, which includes a "temporary potable transmission line" to its San Simon Creek Basin well field due to a "catastrophic failure of the main" transmission line.

Coast Unified's attorney, Guillen, told New Times via email that the school district owns "the infrastructure on its property." In his April 10 letter, Guillen said that the well driller's report for SR4 and the 2012 agreement make it clear that CCSD doesn't own the water treatment facility or the well.

"The MTBE plume that necessitated the use of the SR4 well was remediated," the letter also states. "Despite CCSD no longer needing access to the SR4 well, Coast continued in good-faith negotiations to permit CCSD's continued use of well SR4."

Guillen also questions why the CSD is proposing to take so much of Coast Unified's property as well as the school district's irrigation well, adding that SR4 and its associated infrastructure only take up 7,600 square feet of land. He told New Times that the eminent domain proposal would result in Coast losing fee ownership of 2.39 acres abutting Santa Rosa Creek and the contractual protections for the irrigation well.

"Which protected Coast's irrigation well from interference impacts that might be caused by CCSD over-pumping SR4," Guillen wrote via email. "If CCSD takes the property in fee, those protections will no longer protect Coast's irrigation well."

McElhenie told New Times that the CSD doesn't intend to prevent the school district from using or accessing its irrigation well, and easements would be taken into account should it move forward with initiating the process for eminent domain. He added that the CSD wants 2.39 acres for "more security for the site."

Coast Unified Superintendent Scott Smith told New Times that the community of Cambria will pay the price if the CSD decides to move forward with that process.

"An eminent domain action will be expensive, unnecessary, and divisive," Smith said. "Coast remains adamant that less drastic solutions are available and is willing to negotiate a long-term lease agreement on mutually agreeable terms." Δ

Reach Editor Camillia Lanham at [email protected].