Water Industry News
cause small Tahoe water company to sell
Discovering that meeting water quality and fire-flow
standards would prove costly, Lukins Brothers Water Co. may sell the last
of Tahoe's small water systems to South Tahoe Public Utility District.
Both parties are in negotiations to agree on a fair market value for the
company that serves 979 customers on the northwest side of town bordering
the El Dorado County-city boundary off Highway 89.
The operation was started by Melvin Lukins in 1946. It's now run by
brothers Danny and Larry Lukins, with the help of a five-member board of
directors. Since 1966, the city and Lukins have held a 50-year franchise
agreement that pays 2 percent on water sales. The city's three
franchisees, Lukins, Tahoe Keys and STPUD, paid $22,138 in the fiscal year
ending September 2005.
The average flat-ratepayer in the 650-acre area shells out $283.24 a year
City Manager Dave Jinkens said he wants to protect the
ratepayer who may get saddled with paying for improvements to increase the
water's fire-flow amounts in the lines.
"If they sell to STPUD, what will happen to the rates? I think we
ought to know more," he said.
"The water pressure has been real strong," said water customer
Hatch Logie, who lives on Lukins Way. Although Logie said he also likes
the taste of the water, he's going on a well when he moves to another home
in the Upper Truckee area.
City Fire Chief Lorenzo Gigliotti said the Lukins water system doesn't
have enough fire hydrants to meet city codes and pumps out about a fifth
of the water pressure needed to meet state's 1,500 gallons per minute
fire-flow standards. Lukins cranks out 360 gallons per minute in its
4-inch lines. The state also requires 6-inch water lines. STPUD, which
assists with Lukins' water supply for fire protection, has been undergoing
its own upgrades. Spokesman Dennis Cocking said his company must replace
85,000 feet of line throughout the service area.
"We've been making these improvements since 1995.
The challenge in Tahoe is doing them in five months," he said. This
summer, it will focus on a water line project along Highway 50 in the Al
Tahoe area. Cocking accompanied Board Member Jim Jones to Washington,
D.C., to seek federal grant money for improvements.
Taking on another water company may be part of the package and history of
STPUD, which has collectively consists of a number of water companies over
"If the price is right, it might make sense," Cocking said.
"But with the existing pipes, there's no way they'll meet the fire
Fire flow is only part of the issue for Lukins, its representing attorney
Dennis Crabb indicated Monday. Testing standards to monitor lead and
mercury content have also required more capital expenses by the company.
"There's never been a problem of the water
quality. The federal and state regulations have tremendous cost
implications," Crabb said.
The Lahontan Water Board concurred.
Once the dueling appraisals have come in, Crabb hopes to wrap up talks in
a few months. The city has valued the assets at $160,000 since 2005. But
Crabb wouldn't agree with that amount, saying the worth is valued by more
than the assets.
Danny Lukins said Monday he's unsure how much it would cost to make the
necessary upgrades and what he would do if he decides to sell the
"I've been doing this all my life," he said.