Candidates answer question on lake lease dispute

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Assuming that the CLPOA vs EVMWD dispute over the lake lease will be one of the most pressing issues in this year’s campaign, The Friday Flyer asked the candidates a four-part question on the issue. It should be pointed out that the candidates were asked to answer this question prior to Thursday’s public information meeting.

Also, due to inadvertently leaving out Ted Horton’s response to last week’s question, his answer to that question and this week’s question will appear first. The candidate responses then will appear in reverse order from what they will be on the official ballot.

Starting next week, several candidate forums are scheduled for residents to meet the candidates in person, ask questions and hear their responses on a variety of topics. Each forum has a different format and is sponsored by different groups.

• Wednesday, April 8, 11:30 a.m., at the Chamber Luncheon in the Pepe’s Banquet Room. Moderator Jim Randle will ask questions on behalf of the Canyon Lake Chamber of Commerce.
• Saturday, April 11, 9 a.m., at the Senior Center, sponsored by the Senior Work Group
• Monday, April 13, 7 p.m., Holiday Bay Room, sponsored by Bassmasters, Car Club, CLAMS, CLAPPS, Emergency Preparedness, Fine Arts Guild, Lions, Lioness, Men’s Golf, Women’s Golf, 9ers Golf, Tuesday Work Group, Roadrunners, Street Carts, Tennis Club and Travel Club.
• Monday, April 20, 7 p.m., Holiday Bay Room, sponsored by the Home Owners Club

The Notice of Annual Meeting, Ballots and Candidate Statements will be mailed to property owners on April 8. The Annual Meeting and Election are scheduled for May 14.

Question

What is your opinion about the way the dispute over the lake lease is being handled? Do you agree with the reasoning behind the lawsuit against EVMWD? Do you believe EVMWD would terminate the lease and deny recreational privileges? How is the real estate market impacted by this dispute?

Ted Horton

Ted Horton

I find the Lake Lease negotiations difficult to comment upon since legal matters are discussed behind closed doors. I know for a fact that our POA Board members have been pressured by POA residents for the last few years to somehow negotiate with EVMWD to reduce the rapid escalation of the lake lease costs, fearing that within a very few years our Association would be unable to afford the lease. At least one of the existing Board members was elected because of perceived skills at negotiation.

But, the current lake lease does not expire until December 31, 2022. Why would EVMWD come to the table prematurely to renegotiate a lake lease that appears to this layperson’s eyes very favorable to them in its current form?

Understandably, EVMWD probably feels it is still in a position to – in the POAs eyes, “dictate versus negotiate.” Equally understandably, the POA needs to get negotiations underway. Unfortunately for all, this has now resulted in litigation in the courts and under the public eye. I am sure we all hoped for fair and equitable negotiations with a win for both sides.

What will be the final result? There are a number of questions that need to be answered:

• Will the courts determine that POA residents will retain the rights we now enjoy if the lease should expire? If so, I believe that the POA negotiating hand is strengthened.
• Has the Association overpaid and, if so, is it entitled to $6,000,000?
• Should the Association pay for water if EVMWD does not have to purchase it?
• What are realistic EVMWD costs to operate the lake once the mortgage on the dam is completed later this summer?
• Are EVMWD charges considered under tax or lease laws?

I guess we must all stay tuned, refrain from panic, and trust for the best for both parties. (www.electtedhorton.com)

Ted’s response to last week’s Capital Improvements question:

I find it difficult to focus on one Capital Improvement Project not yet budgeted before I have had the time to familiarize myself with the residents’ needs and desires. I am firmly of the belief that we need to dust off all old improvement plans, add anything else that we learn from community planning sessions and generate a wish list to go forward.

In particular, we need to review whether our facilities meet young family and children’s needs to continue to attract this influential group to our community. Finally, let’s run the entire list through the community vetting process to examine potential costs and set priorities.

Careful planning can accomplish positive and lasting future improvements that will positively affect our property values, enhance our lives within “our little bit of paradise” and save money. These improvements will be easier to accomplish and the necessary financial resources more readily put in place when all concerned parties are in complete agreement. This will result from a planning process that is open and involves everybody.

Ideally, long range plans are updated annually, approved by the POA Board of Directors and our constituents each year and then viewed as “marching orders” going forward.

Solar energy has become an incredibly important part of the world that we live in now and I think one of our next Capital Improvement Projects should take advantage of the current financial energy incentives to spearhead future savings in electricity costs in our POA amenities and buildings.

Lawrence Neigel

Lawrence Neigel

The lake lease has been under negotiations for years. Until the current lease expires in 2022 we are under an obligation to pay the rent and on time! In the meantime the CLPOA can continue to negotiate and attempt to reach some reasonable settlement.

The one thing the EVMWD has forgotten is that we 4800+ property owners are “rate payers” and their constituents! The thing the CLPOA president has forgotten is that we the property owners should have been consulted prior to taking the current action to sue the water district.

I have read the lawsuit filed and the cross-complaint filed by the EVMWD attorney. I read proposition 26 and observed the “exception” that declares and defines payments made to any government entity for the lease of property is specifically NOT a tax. Since I was not privy to the insider’s collaboration preceding this lawsuit, I have no idea what angle the CLPOA attorney is taking on the “unlawful tax” allegation. Of course, if there is some legal premise to claim the payments were a tax, I’m all for gaining the $6,000,000 refund to the property owners.

I do not believe that the EVMWD would deny the lake privileges if for some reason the lease was terminated. They do have a plausible argument regarding the change in the private status of the lake if the lease is terminated. As a public agency, they must treat all members of the public equally regarding their property or services. However, I don’t see how they could open it to the general public when we control access to our private property.

The real estate market will be directly impacted by this dispute if not resolved permanently. The agents will have to make disclosures about the possible impact of a closure of the lake and the ramifications on property values.

Dale Welty

Dale Welty

The POA assures the members at this time that we should not panic, and that the POA has 24 months to pay the late lease payments before Elsinore Municipal Valley Water District (EMVWD) can take significant action. The POA has been working to develop a working relationship with the EMVWD.

I have been in a number of meetings over the past year where Chris Mitchell has discussed the POA’s intention of having cooperative talks with EMVWD. I do not believe the POA would file lawsuit unless the POA felt there were no other reasonable options.

The direction that Canyon Lake POA chooses to go regarding the lake lease is a choice between the lessor of two evils. One choice is to move ahead with the filed lawsuit and endure the threats from the EMVWD; the other is to watch our monthly lake lease go from $25 a month to a probable $100 dollars a month in the next seven years.

The second issue regarding the lake is that someone needs to take responsibility for the maintenance of the lake. The dredging of East Bay needs to done within the next 15 years in order to enhance the water quality and keep the bay open to boaters. Despite collecting over $1 million a year from Canyon Lake members, EMVWD does not want to take any responsibility for the cost of the dredging. At this time we need to take the long view of the lake lease, as the lake is Canyon Lake’s most valuable amenity.

I encourage POA members to stay informed about issues regarding the lake lease. This can be done by visiting the POA website, attending workshops and POA Board meetings.

Bruce Yarbrough

Bruce Yarbrough

During election time for the past four years the main topic has been the lake lease. Candidates have suggested how they would correct the high cost of the lake lease, so this discussion isn’t really new.

The Board has been trying to get EVMWD to sit down and renegotiate the existing lease because it is getting to a point that is not sustainable. The lease is $1.5 million today and could easily double within the next six or seven years.

The water district has basically told us to “take it or leave it” because they are happy with the way this contract is written and see no reason to change it. Working in conjunction with our HOA attorneys, we have hired attorneys that are specialists in water rights. They have reviewed all the documents pertaining to this lease and have given us and our HOA lawyers a recommended strategy that is intended to get both groups at the table and start talking.

Canyon Lake and EVMWD need each other. We have to be good neighbors and treat each other fairly. We are looking for a price structure that works for both of us, one that we can look out into the future and believe we will be able to afford.

One can only look at the problem our City is having with Cal Fire/Riverside County Fire where runaway prices have seriously threatened the closure of our fire station. Do we want to face the same problem with the lake? I know I don’t.

At the Board meetings it was said that EVMWD would start a campaign which would include scare tactics in the media and this is what we are seeing now. We are trying to work out an agreement that is beneficial to EVMWD and our membership.

Larry Greene

Larry Greene

It is unfortunate the Canyon Lake POA Board had to choose litigation over negotiation regarding the lake lease with EVMWD. This occurred due to the cavalier attitude of the water district’s board. An example of the EVMWD Board’s mindset, written in the March 26 edition of the Press Enterprise, states, “. . . (water) board members said terminating the lease would likely put a permanent end to the Association’s exclusive use of a publicly owned lake, a right that has been unsuccessfully challenged in the past because of the lease.”

EVMWD did not engage in good faith bargaining. Thus, Canyon Lake property owners have resorted to a lawsuit to finally negotiate a fair and equitable lake lease agreement. I think the water district’s threat to end our exclusive use of the lake is a bullying ploy to force the POA to acquiesce to the terms of the current lease.

I hope, through the court process, a mediator will be appointed to bring both parties back to the bargaining table to achieve resolution of these issues.

Should EVMWD choose to go forth with of closure of Canyon Lake, I feel a significant impact will be felt. I have interviewed several real estate brokers who have expressed that if the lake were closed, lakefront properties could suffer a 40 to 50 percent decline in value. Parks, beaches, water sports and swimming would also be affected. The resolution of this issue will fall directly upon the incumbent and newly elected POA Board members.

The monies for the payment of the outstanding lake lease (due March 15, 2015) is presently in an escrow account for up to 24 months and can be held there pending resolution of this dispute. This is in compliance with the current contract with the EVMWD.

Tamie Mongold

Tamie Mongold

I attended the EVMWD meeting on March 26 and I believe they are distorting the truth to scare the membership into accepting a bad contract. I know this is a sensitive subject for every homeowner; the very thought of losing our lake is terrible. We’re protected by our original lake lease contract. It states the term of the contract is 55 years, with an option to extend the lease for 44 years.

The Rights of Third Parties (Homeowners) in the event of termination of this contract have the right to use the reservoir on the same conditions and charges as any other person permitted to use the reservoir. (This means they can’t take away your rights to use this lake). Reinstatement following any termination of this contract, shall be for a period of 24 months, by making payments. Any and all disputes shall be arbitrated with each party paying one-half of all the costs for this proceeding.

Reading and understanding these stated rights to the Canyon Lake reservoir, it is my opinion that both sides need to expedite an agreement for a new contract that will be desirable to both sides equally. It appears, “per contact agreement,” we have 24 months to resolve this issue.

Although I do not understand how the POA came up with the $6 million figure the EVMWD owes us, I am awaiting an explanation just like the rest of the homeowners. I do not believe “per our contract agreement” the EVMWD can deny any of our recreational privileges due to the third party right we retain.

As far as our real estate market, our property values should remain the same. Contract or no contract, our rights and privileges are the same; we are protected by our contract agreement.

Paul Queen

Paul Queen

Obliviously this is a very sensitive and important issue to all of us. We cannot lose the use of the lake, but we also cannot afford to pay a rate that doubles every few years. I have read the lease contract and, as I understand it, it states the following (Lake lease sections 9, 10, 11)

The lease specifically deals with default. It states that within 30 days of notice from EVMWD that we are in default (not paying) we can request arbitration. After arbitration, we would have 90 days from the date of the arbitrator’s final decision to cure the default, meaning to pay what is owed according to that decision.

Based on this information which is in the lease agreement itself, I believe the EVMWD is using scare tactics and half-truths in their campaign to avoid true negotiation of the escalating payment schedule.

The lease also states that we can cure the default by coming up to date in payments at any time within two years of the default and the lease will be re-instated.

The lease also specifies “third party rights” which state that, in the event we can’t settle our dispute, the water rights revert to the property owners of Canyon Lake.

I am not privy to all information, but one would assume that our lawyers have requested arbitration to conform to the provisions of the lease and ensure that during our dispute we do not lose the lake lease.

If it continues to a court judgment anything can happen, as it will come down to one judge’s legal interpretation of the lease agreement. I would think that neither the EVMWD nor the POA would be willing to risk losing, and that we would settle our dispute long before that eventuality. (www.facebook.com/POAELECTION2015)

Harold Larson

Harold Larson

In my opinion, the action taken by the current Board on the lake lease is being handled correctly. The lawyers who are working on the suit are well versed on water rights. We are currently not paying our lease,but have established an escrow account showing our good faith during this opening phase of contract discussions.

We have had discussions in the past but to no avail. Filing the suit was the proper way to get the lease issue resolved if required go to court to protect our vested interest.

I do not feel the water rights will be terminated, and this great amenity will be ours to enjoy and those that follow us! The only way I can see a problem is if the water had be allocated and the lake drained for use during the water shortage.

I do believe that this issue will not be settled in a short time, unless EVMWD  wishes to resolve rather than going to court. One should not listen to all the scare tactics being stated by a group within our community.

Remember we will win out and get a lease and rights for the lake and be able to reduce our fees.

I have talked to Coldwell Banker. There is no change in demand for a property in Canyon Lake. They will in their escrow and closing documents state that there is a lawsuit against EVMWD on the lake lease.

Thank you for your review and when elected I will assure that all amenities are always maintained and improved as the need arises!

Eric Spitzer

Eric Spitzer

This is a tough one for me because I’m on the Executive Committee handling the negotiation. That means I can’t say much. I will tell you we are not losing the lake rights. That would take a court of law and a judge. The water district cannot just decide to take over the lake.

We intend to pay everything due EVMWD once we agree what that amount is. As far as home values, when we finish this discussion with EVMWD your house will be worth more, not less. Have faith, David Eilers and I will deliver.