DWP lawsuits over water rights may put squeeze on Mammoth Lakes

MAMMOTH LAKES — The people of this small High Sierra ski town have survived drought, forest fires and earthquakes. They have endured economic recessions and volcano scares. But nothing in their history prepared them for the Los Angeles Department of Water and Power.

The DWP launched a legal attack six months ago for control of the city’s primary source of water, Mammoth Creek, which tumbles down the slopes through town. The utility contends it has owned the water since 1905 and Mammoth Lakes has been poaching for decades.

The tiny Mammoth Community Water District says that if it loses the lawsuits, the district would have to buy water from the DWP. That would force the district to raise average rates to levels many locals cannot afford — increasing them by at least 100%, to about $840 a year, one district official said.

The 7,700 year-round residents are largely working-class employees catering to vacationers who travel 300 miles north from Los Angeles. Forty percent are low-income.

Greg Norby, manager of the water district, said the DWP is using the lawsuits to intimidate his agency, hoping it will yield on the water rather than pay for a costly court battle. The district has already run up about $300,000 in legal expenses in the case, he said.

In a county with a 12.1% unemployment rate and a city whose bad economy and debts have it on the verge of bankruptcy, the DWP lawsuits could be the last straw, Norby said.

“It would bring a huge return on their investment in attorneys’ fees,” Norby said. “Mammoth Lakes would cease to exist.”

Mammoth Lakes argues that it is entitled to as much as 2,760 acre-feet of water annually under licenses and a permit granted by the state dating back as far as 1949. The district also argues the DWP should not be allowed to claim the water now after allowing the community to become dependent upon it for decades by relying on those licenses and permit.

“Los Angeles never protested any of them,” Norby said. “Where the hell was the city 50 years ago?”

The DWP says the state had no authority to give Mammoth Lakes permission to draw from the creek.

Martin Adams, DWP’s water project director, said Mammoth Lakes wasn’t a big concern when the community was small. “But over the years, after growth spurts which included condos and golf courses, Mammoth’s water diversions were no longer just a blip,” Adams said. They are now equal to 1% of the flow of water in the aqueduct carrying water from the Eastern Sierra to Los Angeles, he said.

The lawsuits, filed in Mono County Superior Court, are part of a new assertiveness by the utility along the Eastern Sierra, where it has owned land and water rights since early in the last century. After long legal battles, the DWP has been forced to help restore land it drained by giving up water to maintain levels in Mono Lake, re-water parts of the dry Owens Lake and restore a 62-mile stretch of the Lower Owens River.

The utility believes the Owens Lake effort alone unfairly raises rates for its customers by an average of at least $20 a year. Facing an estimated $238-million budget deficit, the DWP is trying to increase revenue from the Eastern Sierra and put as much water as possible into the aqueduct to L.A.

“Every drop counts, and under the city charter we are mandated to protect every drop,” Deputy City Atty. Bill Carter said. “The city of Los Angeles does not want to harm Mammoth or its residents.”

The water war comes at an especially tough time for Mammoth Lakes.

Just five years ago, the city was almost debt-free, enjoying record snowfalls and a real estate boom. Every Friday night in winter, thousands of vehicles streamed up from Southern California, bringing an estimated 1.5 million skiers to the region during the season.

Since then, the median price of single-family homes in Mammoth Lakes has fallen from $900,000 to $541,000 — a decline of 40%, according to a study by FTI Capital Advisors. The median price of condominiums has fallen from $560,000 to $270,000 — or about 52% — during the same period.

City leaders are preparing to file for bankruptcy because the community cannot afford to pay a $43-million breach-of-contract judgment against it brought by a major developer.

The city considered raising taxes but a financial analysis warned that tax increases would drive tourists elsewhere and devastate households. The area’s largest employer, Mammoth Mountain ski resort, laid off 70 full-time employees last winter because of a dearth of snow.

“This town’s been through tough times, but never like this,” said Tom Cage, a business owner and member of the water district board. “I’m not saying we’re going to become a ghost town with tumble weeds rolling down Main Street. But no one around here expects to see development for years to come.”

After all, he added glumly, “there are lots of other places for people to go that aren’t under the thumb of the DWP.”

Under a “Stop the LADWP Water Grab!” campaign managed by the public relations firm Cerrell Associates, the Mammoth Lakes district recently began asking its ratepayers to flood the DWP and Los Angeles City Hall with complaints and hard-luck stories.

Many Eastern Sierra communities have existed as Los Angeles colonies of sorts since the early 1900s when the city acquired enormous swaths of Eastern Sierra land and began pumping so much water south that the region became a de facto desert wilderness. Resentment has festered for a century.

“The DWP is a rapacious agency,” said Paul Rudder, a Mammoth Lakes lawyer for 40 years. “The people of Los Angeles aren’t going to shed a lot of tears over a poor little mountain town being stepped on by an elephant.”

State Sen. Alex Padilla (D-Pacoima) sent a letter to the DWP last week recommending that the agency work with Mammoth Lakes to find common ground. The letter to General Manager Ron Nichols said the dispute is “opening old wounds in the Owens River Valley and risks exacerbating the historic distrust of the City of Los Angeles and LADWP well beyond the Eastern Sierra.”

louis.sahagun@latimes.com