What's at stake?
One of the region's top developers. An insolvent water district. A well report that claims it can squeeze water from stone. Mix them together, and you have a decades-in-the-making problem.
But even after the state threw millions of dollars at the mess, a solution has yet to appear.
Editor’s Note: This article is a collaboration between Fresnoland and SJV Water, a nonprofit news site covering water in the San Joaquin Valley.
A high-end housing development in the foothills above Fresno that was approved despite unreliable groundwater supplies is now getting a $4.2 million taxpayer bailout to bring in surface water that may, or may not, materialize.
The gated Mira Bella community, with its $800,000 Mediterranean-style homes near the shimmering waters of Millerton Lake, lives up to its name – it looks beautiful.
Its beauty faded quickly for homeowners, however, after they learned they were responsible for fixing failing wells and a dilapidated distribution system. The situation went from bad to worse as it became clear drilling deeper, or new wells, into the rocky formation beneath Mira Bella wasn’t an option.
Then drought hit and one of the community’s wells collapsed.
The 55-home development should have never relied solely on groundwater, officials and residents told reporters recently.
Thirty years ago, the warning signs were clear.
But the Fresno County Board of Supervisors blew past the numerous, blaring concerns in a race to build that defined Fresno in the 1990s.
Now, taxpayers are paying to build infrastructure that can be used to bring water from an agricultural water district more than 80 miles to the south.
Even that deal, though, is in dispute and there’s no guarantee the ag district will always have the water to sell.
If this all sounds like the fictional plot for a novel, it’s not.
It’s just California water.
“A beautiful vision”
The original vision for Mira Bella started with one man, a local Fresno-based developer named Donavon Harris.
“Can’t you look at the subdivision and see all the beauty I brought?” Harris said in a recent interview. “Tell me another subdivision in Fresno that’s got 35-foot gate towers, three palms, nine spouts shooting up in the air; where you have meandering roads going up and around and down.”
“One person trying to build a beautiful vision. Isn’t that enough of a story?”
Harris started work on the development, then called Lakeview, in 1980.
One of the first aspects he tackled was water. Harris had two wells drilled in 1980. Both were hard rock fissure wells, which yielded precious stores of percolated snowmelt from high pressure cracks of granite hundreds of feet below the subdivision.
At the time, the two wells produced nearly 300 gallons per minute combined. Few other wells drilled in the area produced so much water, according to state Department of Water Resources and federal Bureau of Reclamation documents reviewed by Fresnoland and SJV Water.
But as the 1980s wore on, Harris made little progress for unknown reasons in seeing the subdivision to completion.
Parade of red flags
In 1994, he went to the Fresno County Planning Commission with his concept for a 180-home subdivision.
But despite the strong initial showing from the wells, government officials and nearby residents raised red flags about water reliability from the start.
Comments on the Lakeview 1994 draft environmental impact report (EIR) from various government officials and others recommended against the well water system.
“Our department’s experience with wells drilled in this vicinity has revealed that their production diminishes and their reliability is questionable,” wrote Cindy Forbes, then senior sanitary engineer at the state Department of Health Services, citing specific wells for nearby developments that had failed.
She recommended Lakeview’s system be put on surface water from the nearby local water district, Fresno County Waterworks District No. 18.
Kenneth Kay, a neighbor to the development whose well was 40 feet away from Harris’, told the county how the subdivision’s groundwater stress test sucked his domestic well dry. Kay said that conditions got so dire, he had to hook up to a neighbor’s well for an emergency connection.
“A subdivision across the street would substantially and dramatically harm our ability to draw the ample water source from our current well,” wrote Kay.
A particularly damning comment letter opposing the development’s 1994 EIR came from Baker Manock and Jensen, one of Fresno’s top law firms, which represented a St. Agnes Hospital anesthesiologist who lived in a tony estate known locally as “Pill Hill” (for all the doctors that lived there).
Attorney Chris Campbell wrote that the county’s own data showed the subdivision did not have long-term water supply feasibility. If one of the project’s wells were pumped for 100 days straight, groundwater levels were projected to plummet 500 feet, according to Campbell’s letter.
The water supply testing was “clearly insufficient to establish that there is adequate groundwater supply,” Campbell wrote. Even under the rosiest supply and demand projections, “the proposed wells will barely be able to serve the subdivision.”
No stopping it
None of those concerns dissuaded county planners and politicians. Not even a letter from the U.S. Department of Interior calling on Fresno County to stop the project because of harm to endangered species held any sway. The county Planning Commission and Board of Supervisors unanimously approved the development in November 1994.
“From my perspective, the thing just sailed right through,” said Neal Costanzo, legal counsel for Fresno County Waterworks District No. 18, the district that oversees Mira Bella, then called Lakeview. Costanzo, who has served as legal counsel for the district since 1988, said he hadn’t seen any of the concerns raised in comments on the environmental review.
“The district was telling them all along that it was a dumb idea,” said Costanzo. (The water district did not submit a letter to the county about its water supply concerns.) “If that happened today, that EIR would get nowhere.”
Waterworks District No.18 is an independent special district which also oversees the tiny town of Friant down the road from Mira Bella. It has been the water management agency for Mira Bella since the 1990s, when Harris was first developing the subdivision. Fresno County supervisors appoint members to its board and the board appoints district staff.
“Get it done”
Former Fresno County supervisor Doug Vagim, who voted to approve the subdivision in 1994, said in a recent interview that it was approved because the county hoped the luxury homes would act as an economic stimulus to the rural Friant area.
“[The county] said: ‘We won’t stand in their way,’” Vagim said. “We’d promulgate their growth if there was a community desire, and if it was done correctly.”
Nearly 30 years after his vote, however, Vagim has a hard time imagining how the development passed through the county without a single “no” vote – not from the planning commission, and not from the county board of supervisors.
“I can’t believe though that [Harris] was allowed to have wells that weren’t guaranteed to be sustainable,” Vagim added.
Phil Desatoff, the county hydrologist who consulted on the environmental impact review and is now head of the Consolidated Irrigation District, could not be reached for comment despite multiple phone requests.
“I think they all had that ‘get it done’ attitude,’” said former Fresno County Supervisor Phil Larson, who served on the board starting in 2002. “You attract people that want to get something done, and they’re willing to pay for it. If you’re willing to accept it, that’s fine, but I was never willing to accept that.”
Things went downhill for the project shortly after it was approved; Security First Bank foreclosed on most of the subdivision in about 1995-96, Costanzo estimated.
“Whoa, this is cool”
The bank moved the lots into its own development subsidiary, according to a statement from Ryan De Young, president of De Young Properties, which bought 41 lots from the bank’s subsidiary company and six lots from a separate owner starting in 2014. De Young Properties is run, in part, by Paula De Young, the daughter of John Bonadelle, Sr., one of the most prolific developers in Fresno history.
De Young quickly got to work building houses on the lots. It built and sold houses from 2014-2018.
Now named Mira Bella, the development was marketed as a luxury escape from the city, but still close enough to school districts and urban centers for everything needed.
“A once-in-a-lifetime opportunity now exists for you to merge your lifestyle into true resort style living,” says a website advertising Mira Bella.
Mike Collins was one of the buyers in those early years. Collins said he wasn’t impressed with the homes for sale in Clovis back in 2016. He and his wife were looking for a new house and wanted something spacious without being right next to neighbors.
The real estate agent from De Young told Collins about Mira Bella. It was up in the hills so close to Millerton Lake that the water almost touched the backyards. But these houses came at a premium and were about $100,000 more than those in Clovis.
It didn’t take long for Collins and his wife to make a decision once they arrived at the stunning gated community.
“De Young had it all dolled up. They were paying the water bills; they were making sure everything was green. They were doing a sales job,” said Collins. “So right away, you’re like, ‘woah this is cool, this is great.’”
Collins’ wife wanted the house.
But after the severe drought of 2015, Collins said he had questions about the water supply. Collins and Michael Funk, another Mira Bella residents said the sales agent assured them that the water supply was stable. Collins said he took the agent’s word.
“You’re asking a reputable builder. They have a lot to lose if they play games with you,” said Collins. “So you’re more apt to trust.”
Ryan De Young said De Young “educated” prospective homebuyers about the water supply system by providing them with a copy of Mira Bella’s covenants, conditions and restrictions which outline Fresno County Waterworks District No. 18 as the responsible entity for the system, in a statement. De Young also regularly provided buyers with contact info for Dan Pearce, then president of the water district, said Ryan De Young.
On the hook
After moving into his new Mira Bella home, Collins said, water quickly became an issue.
“Shortly after we moved in we started learning that we had to replace wells. And then we learned that we had to fix leaks everywhere. And then we started uncovering the fact that our house was built on an infrastructure that was 20+ years old,” Collins said. “That’s interesting, none of us were told that.”
It was something that all homebuyers there experienced, he added.
“The place used to look beautiful, now it looks like crap,” said Funk. “Everything’s dead and brown. We’re cutting down trees every six months.”
Minutes from the Mira Bella Homeowners Association board of directors meeting in 2015 seem to confirm the messaging from De Young that all was well. Two of the three board members at the time were De Young representatives.
Under the “Landscape Slopes/Water update” section the minutes read, “Water system is great and there should never be a shortage of water.”
But right after moving in, Collins said, the community was grappling with nonstop water problems.
One of the wells’ pumps wasn’t working when Collins moved in. He thought that was odd since it was a brand new development. That was just the beginning. In the coming few years, all three wells would need to have the pumps lowered and replaced. Since 2016, there have been five major leaks in the distribution system. All those required roads to be dug up and pipes repaired.
The fixes came out to roughly $78,000, though Collins didn’t know the full amount paid by the HOA.
“We didn’t sign up for this mess,” Collins said.
Even after all the repair work, one well went dry in fall of 2022, leaving Mira Bella with just a dribble from the remaining two wells, he said.
Though Waterworks District No.18 oversees Mira Bella, the district and residents disagree about who should be responsible for system maintenance.
Adding to the problems, it turns out Waterworks District No. 18 is nearly out of money, according to Costanzo, the district’s attorney. The district didn’t raise its water rates high enough to accommodate the added burden as people bought homes in Mira Bella and started moving in, he added.
“You could probably say the district is technically insolvent in the sense that it does not have sufficient income,” said Costanzo, the district’s attorney. “But it’s been limping along by putting things off and juggling things around.”
Over the past year, residents, including Collins, have replaced former district board members and installed a new general manager in hopes of changing what Collins said was the district’s poorly planned budget.
When asked about Mira Bella’s water problems, Ryan De Young pointed to Waterworks District No. 18 as having responsibility over the system. De Young wouldn’t enter a purchase agreement with the bank for the lots unless it had approval of the water system from the county and water district, wrote De Young in a statement via email.
But many Mira Bella residents don’t see it that way.
In an October 2022 letter to De Young Properties, residents beseeched the developer for financial help to get the community off the wells and tied into Waterworks District No. 18’s surface water supply.
“Many Mira Bella residents are frustrated and regret purchasing a De Young home in this neighborhood,” the letter that was signed by at least 24 residents states. “Mira Bella residents are respectfully asking that De Young Properties take responsibility for the expense of tying the neighborhood to Friant surface water in lieu of asking you to pay for the entire infrastructure to be rebuilt. This would be the right thing to do and would restore confidence in De Young Properties.”
Residents never heard back.
Ryan De Young said he never received a formal letter, only an unsigned “draft” version from one resident.
“I informed this individual that De Young Properties had no involvement in the water system for the project,” wrote De Young in a statement.
Collins said he has sent emails to De Young Properties over the past month, again, pleading for help.
The community needs funds up front to start work because the state grant is only doled out through reimbursements. Collins said he thought an initial payment from De Young, which would be reimbursed later from the grant, was a reasonable ask and a way for De Young to support its home buyers.
He said De Young declined to provide any funding.
“De Young responded to Mr. Collins encouraging him to contact Mira Bella Corporation and Citizen’s Bank to address his concerns if the County and Waterworks District No. 18 were not immediately able to fund repairs to the water supply system at Mira Bella at the Lakes,” said Ryan De Young in a statement.
Water supply in question
With failing wells, little money and fewer options, Waterworks District No. 18 turned to the state for help.
Last fall, the district applied for $4.2 million from the Department of Water Resources’ (DWR) Small Community Drought Relief Program. It was approved in November 2022.
“It was a big sigh of relief because this was money that we’ve been stressed out about,” said Collins. “I think we’re doing all the right things to try and straighten this thing out.”
That money is for construction of a pipeline to connect Mira Bella to Waterworks District No. 18’s surface water treatment plant. The district still has to get enough water – 100 acre feet per year – to serve the community.
That’s where another wrinkle pops up.
Costanzo says the water will come from an established deal under the Friant Ranch development, a proposed 2,500-home community less than a mile from Mira Bella owned by former Madera County assembly member Frank Bigelow.
That development has been mired in legal problems for more than a decade and the land still sits empty.
Nonprofits including the Sierra Club and Revive the San Joaquin, filed suit opposing Friant Ranch in 2011. In 2020 a court ruled that the development’s air quality analysis was inadequate. Then in 2021, Fresno County supervisors unanimously rescinded Friant Ranch’s approval. A new environmental review is underway for the development.
Despite the problems, Friant Ranch still has a water deal, which is for Waterworks District No. 18 to buy 2,000 acre feet a year from the Lower Tule River Irrigation District in Tulare County.
The district plans to peel off 100 acre feet from that deal and use it for Mira Bella, said Costanzo, attorney for Waterworks District No. 18.
Except that’s not part of the deal, according to Eric Limas, General Manager of Lower Tule.
“They have not approached us about that,” Limas said. “That’s not what we’ve agreed to.”
Waterworks District No. 18 has the option to buy the water in 500-acre-foot blocks. But Limas said water from the Friant Ranch deal will only be called on and sent to Waterworks District No. 18 once Friant Ranch is approved and in development.
Costanzo said the agreement can be activated anytime.
“I think I can purchase the 100 acre feet,” said Costanzo. He acknowledged it will likely come at a premium but that he believes it will be possible, despite Limas’ comments.
Even if Costanzo is correct, it’s unclear where Mira Bella, or Friant Ranch, would get water if Lower Tule simply doesn’t have it to sell.
Lower Tule contracts for water through the federal government’s Friant Division of the Central Valley Project. In the severe drought years of 2014 and 2015, Friant contractors received a 0% allocation. Initial allocations in 2022 were again 0% until late winter storms allowed the feds to bump that up to 15% and later 30%.
When asked how DWR verified water supplies for grant projects under its drought relief program, a DWR spokesperson wrote in an email that grants are awarded based on information submitted by the grantees which is often preliminary.
“It is the District’s responsibility to ensure they have the water supply upon which this grant is based,” the spokesperson wrote.
Seeking a loan
On Tuesday, Jan 24, Waterworks District No. 18 Attorney Costanzo pitched the Fresno County Board of Supervisors for one last bail out. Even with the $4.2 million state grant, he said, the water district was in dire straits and didn’t have the money to complete Mira Bella’s water project.
He asked Supervisors for a $1.3 million loan, using COVID relief money.
“We think we can right the ship [with the loan], ” Costanzo said. “Without it, we think the district is headed for insolvency.”
Paul Nerland, Fresno County’s Chief Administrative Officer, said the county had never approved such a loan in his 25-year career.
Supervisor Brian Pacheco worried about the precedent such a loan would set for the county’s rural disadvantaged communities, who had also seen their wells go dry in recent years.
“…we were faced with shutting the water off in Cantua Creek because they had a similar issue [in 2015]. And we told them they needed to raise their rates in order to continue their water or we were going to shut their water off. And that’s been the policy of this board. If we want to change that going forward, I’m all on board – but be prepared. We’re going to do it for everybody.”
Costanza noted that Mira Bella brings value to the county.
“We are asking the county Board of Supervisors to recognize the fact that what you got is a whole subdivision of homes that are worth anywhere between $800,000 and $1.5 million, that are a significant source of property tax revenue to this county, that are going to become worthless unless we get this project done,” he said.
Supervisor Nathan Magsig, whose district includes Mira Bella, said the water district had gotten into financial trouble because its board had believed that new development would come along and bring more money to help pay the water costs.
Nearly 30 years ago, developer Donavan Harris convinced the Board of Supervisors that Mira Bella should be built despite clear warnings there wasn’t enough water.
On Tuesday, current Supervisors found themselves facing the consequences of that decision.
They unanimously approved having staff consider making the $1.3 million loan to Waterworks District No. 18 so it can move forward on its new plan to build a pipeline to bring water that may never materialize.
“I do not blame the current [water district] board,” Supervisor Magsig said. “And actually, I don’t blame anyone.”