Sage Mesa Water System Report - June 2025

Description

Sage Mesa Water and Public Service Co. is a private water system built in 1966 that was originally owned by Mr. Richard Chapman and now his son John owns the system. The Chapman family owns the assets and water licences. Mr. Chapman owns the distribution system and also owns 1 golf course. Since 1993, Chapman has been trying to develop land at the end as well as to the west up the mountain of Sage Mesa and hasn’t been successful.

Sage Mesa water system has 242 ratepayers, including Sage Mesa, Sandstone, Westwood, Pine Hills golf club, WOW golf course and Husula Highlands.

1988 – Boil water notice put on the system due to chlorination issues.

1990- Provincial government seized the system -Seize order 1378 (attached) for lack of adequate funding in Reserve fund, and deficits in chlorination equipment. The provincial government has been directly managing the water system since 1990. Sage Mesa appears to the only private water system in British Columbia under direct provincial management by the Comptroller of Water Rights.

June 1990 – Richard Chapman agreed to sell the system to Province for $1 provided the province will assume all liabilities.

2009 – Regional District Okanagan Similkameent(RDOS) was contracted by the province to perform day-to-day operations. Water quality sampling, daily system checks, fire hydrant maintenance, critical failures, break and leaks repaired,etc

2012 Neighboring water system, West Bench Irrigation District and RDOS entered into a Bulk Water Agreement with the City of Penticton to provide fully treated water in accordance with the Interior Health’s Permit to Operate mandate.

Sage Mesa Water was included in this historic agreement as the RDOS was aware that the Sage Mesa water system was needing improvements.

2019- Under provincial management the lower Sage Mesa area was put on a

permanent Boil Water Notice. In addition, during freshet the Upper areas are on a Water Quality Advisory for Turbidity each spring.

December 2022:RDOS received an acquisition agreement from Mr. Chapman. Owner to receive $1 for all water system assets (if vote passes).

February 2023: RDOS Board approved to proceed as per Utility Acquisition policy.

June 2023: RDOS received Engineering and Financial Assessment report. Report

author, McElhanney noted within the study that it is a Class D study (high level) with a 40% contingency. Engineer report states that cost of upgrades is $33 million.

$10.2 million required between 2025-2032, another $8.2 million required between 2026-2029 and 14.6 Million required between 2033-2037.

Fall 2024 Sage Mesa customers were informed that the RDOS has been asked to acquire the Sage Mesa System by the province due to aging infrastructure,

insufficient financial resources, not meeting regulatory requirements, liability concerns and insurance, and the system is not eligible for government grants

because Government manages it. Government can’t give grants to themselves.

November 2025 vote:

NO VOTE : Al Aderichin, P. Eng., Head, Water Utilities Engineering, Ministry of Water, Land and Resource Stewardship stated at the June public meeting that the provincial government will continue to manage the system and will immediately

levy each homeowner with amount needed for capital upgrades. In this case we will be ineligible for government grants because the province will still manage the

system and can’t grant themselves money.

YES VOTE : Jim Zaffino, RDOS CAO stated at the June public meeting that RDOS will own the system and will apply for grants. If no grants are received, RDOS stated it will cost each homeowner $8,300 – $9,400 for capital costs, plus $1800-$2500 for operating costs. Approximately $12,000 per year per home for water.

Not only will this be unaffordable for people, but it will drive property values down.