Californian urges state action to regulate small private water systems after disputed rates and infrastructure costs

Mary Wood, a member of a small, privately owned public water system, told the State Water Resources Control Board on Sept. 16 that existing regulatory gaps leave residents exposed to inequitable rate arrangements and financial risk. Wood said she purchased her property in February 2010 and joined a mixed‑use small system that serves a commercial property, a cabin and seven residential properties. She said a written water utility agreement requires a 50/50 split of dues and special assessments and that an arbitrator ruled the contract remains enforceable "in perpetuity." Wood said the system has levied special assessments six of the last eight years and that insurance is absent for many small associations.

"In the absence of clear legislation, public policy, and regulatory oversight, small water systems like mine can form through informal agreements," Wood said, asking the board to establish standardized guidelines for sustainable rate structures, quality standards and complaint resolution methods to ensure safe, affordable and accessible water.

Board member Laurel Firestone responded that a recent law directs the State Water Resources Control Board to establish technical, managerial and financial regulations for systems — a step she said should help address gaps in oversight, though she acknowledged remaining limits for some small private systems and overlapping jurisdiction with the California Public Utilities Commission. Chair Joaquin Esquivel and other board members thanked Wood for raising practical governance issues and invited her to collaborate further with staff as those regulatory efforts proceed.

Why it matters: An estimated millions of Californians receive water from small public or quasi‑public systems. Wood’s testimony highlights consumer protection and affordability risks where informal agreements and limited oversight can leave property owners liable for large, recurring capital assessments and repairs.

Details: Wood described a recent example in which the system faced a $28,000 tank replacement and said her assessed share was about $4,000 while other property owners paid smaller amounts; she said judges and arbitrators upheld the contract’s terms. She cited the prevalence of special assessments and the lack of insurance coverage in many small associations as financial vulnerabilities.

Board response and next steps: Board members said the agency is working on regulatory standards that include technical, managerial and financial requirements for water systems and encouraged Wood to work with staff as rules and guidance are developed. No board vote or formal regulatory action occurred at the meeting.