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Legacy of Juniper Utility has residents stewing

Last Friday, a collection of men and women sat in Marion Palmateer's plush Southeast Bend living room and told a story of frustration, talking over one another and becoming increasingly angry about their understanding of the legacy of Juniper Utility and what it means to them.

These folks who gathered on Palmateer's soft white couch and chairs consider themselves the modern-day victims in the more- than-a-decade-old saga of Juniper Utility Co., a water service provider formerly owned by housing developer Jan Ward in Southeast Bend. In 2002, it was condemned by Bend for what the city said was risk of catastrophic failure.

Money and "authority" are at the core of the story now for this group, as opposed to the low water pressures of a decade ago—a problem that became so egregious that, by 2001, it became a challenge to take a shower or fill a washing machine. Water lines routinely broke down.

The people in Palmateer's living room, "a loose collection of individuals," as they call themselves, are residents of neighborhoods formerly served by Juniper Utility, including Timber Ridge, Mountain High, Tillicum Village and Nottingham Square. They are frustrated with a history they felt they had no control over but is now costing them in water bills they believe will cost them thousands more per year than they ever expected.

In 2004, homeowners association representatives from their neighborhoods signed an agreement with the city that said the owners of the roughly 700 homes of the neighborhoods would pay 100 percent of the costs associated with providing water to the neighborhoods, including making improvements to the system.

But this group of residents feels the agreement wasn't in their best interest and they had no say in the decision. An HOA board member at the time said a ballot was not sent out to homeowners for approval and, because there was no vote of homeowners, these frustrated residents believe this 2004 agreement could be illegal. Further underscoring the issue, it appears the agreement was never recorded with the county clerk's office. So, when these new people bought houses in these neighborhoods, the tab for paying to upgrade the water system didn't show up in their title searches.

"Think of the banks that lent against it," said Dan Kehoe, a resident of Mountain High who has taken a lead role in challenging the agreements between the HOAs and the city. "That's called bank fraud and people go to jail for it."

But although frustrations over this agreement are evidently fresh for these residents, it would appear that the issue should be moot because in 2011 the HOAs and the city reached a new agreement—one that should reduce costs for residents.

"We moved them from a bad agreement to a good agreement," said city of Bend Finance Director Sonia Andrews. "From something that would cost them a lot to something that would be more reasonable."

Each homeowner is now obligated to pay $5,142.86 by March 31, 2015, or $26.06 every month for 30 months.

But, this remedy doesn't answer the concerns of this group, which is also frustrated with a provision in the agreements requiring them to give up cheap irrigation water. On Jan. 1, 2015, the homeowners in these neighborhoods will lose their flat rate of about $30 a month for irrigation water, and begin shouldering the burden of watering common areas and filling the many ponds and small lakes in the neighborhoods with potable water. According to a spreadsheet prepared by this group, the homeowners expect their monthly water bills to leap to around $310 per month in the summer of 2015. The actual amount of their water bills is anyone's guess because HOAs may change how and how much they water in order to reduce costs.

City officials say the elimination of irrigation water is a matter of public health. The current water system has untreated ditch water for irrigation running in lines just inches away from potable water lines—a safety issue that could cause major health problems if the old brittle lines break or anyone ever taps into the irrigation line to supply a home, officials said.

But the combination of paying the fee for upgrading the system and losing cheap irrigation water means that the people who are concerned believe the new agreement also isn't in their best interest. They question whether it, too, is legal because a ballot was not cast by all the members of the association.

It's a situation that may be worth litigating, according to these residents. Kehoe, and others in the group, demurred on stating a specific estimate of the potential amount of damages such a suit against the city could reap, but he said the numbers would be "shocking."

City officials and leaders of the homeowners associations see all this very differently.

"I think we are on strong legal ground," said Assistant City Attorney Gary Firestone.

He said he hopes there is no lawsuit. If there were one, he thinks the city would likely win, but even in the case that it loses, he believes the damages would be relatively minor.

Timber Ridge Homeowners Association president John Apperson, one of the original signers of the 2004 agreement, concurs.

"It's a done deal; it was done correctly," Apperson said. "The city did not break laws."

Apperson said the people currently angry about the agreements never showed up at meetings when the agreements were being made. He also does not recall them voicing their concerns in 2011 at a meeting held at the Bend County Club when homeowners voted unanimously, he said, to approve the new agreement.

"I think they are just a bunch of people with nothing to do," he said. "Because everybody else in the neighborhood is thrilled to death with it."

Apperson said if they are serious about these concerns, these individuals should hire an attorney and sort it out themselves.

That could happen, these frustrated residents said.

"It's only going to take one person who gets so upset the dominoes start falling," said Mike Groat, who lives in the Miller Creek area of Mountain High.

Already the city has spent somewhere between $15 million and $20 million on Juniper Utility. The largest damage award in the history of the city required it to pay about $10 million to Ward for the condemnation of the utility and legal fees. Since then, the city has spent several million on repairs and upgrades to the water system. The next two years will see many millions more spent on building large new water lines through the area.

Damages in a new lawsuit could be simply confined to the $5,142 each of the 700 homes is now responsible for. But these frustrated residents say other amounts could include the higher water bills residents will face once their irrigation water is eliminated. And if Kehoe is correct and banks were not informed about the amounts of money tied to properties in these neighborhoods, could damages be even higher?

As most every source interviewed for this article said, finding the answer will require another complicated and expensive round of litigation.

These frustrated residents say they want the city to allow them to forgo that expense, admit it has done things wrongly and allow them to keep their low rates for irrigation water.

Firestone said that's not going to happen.

"We reached an agreement. We intend to stand by the agreement. And that is not part of the agreement," he said.

For now, city officials and HOA leaders say they are focused on improving the system and moving past the troubled history of water service in the area.

Apperson said he hopes these people will do the same.

"So, let's say the city did screw us out of our water. So what?" said Apperson. "[But] they didn't and so, you know what, live with it."

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