Donner Summit Public Utility District 

Reason for Investigation 

The Eastern portion of Nevada County has seen significant growth in the last decade. Some 

public services are provided by special districts, the oversight of which is a responsibility of 

the Nevada County Grand Jury (Jury). Pursuant to the California Penal Code, Section 933.5, 

the Jury, noting the proposed development of the Royal Gorge Area, decided to examine the 

problems and challenges such development, and additional build-out already permitted, 

would have on the Donner Summit Public Utility District (DSPUD). 

Background 

In 1948, the State of California authorized the formation of the DSPUD to initially provide 

drinking water and wastewater treatment to its property owners. Twenty-six voters approved 

and three opposed the establishment of the district. 

The DSPUD commenced fire protection for the area in 1973. The DSPUD ceased to provide 

fire protections services when its staff, equipment and other resources were transferred to the 

Truckee Fire Protection District (TFPD) in July, 2006.  Administrative and treatment 

facilities are located on 5.75 acres of U.S. Forest Service (USFS) land under a 20 year special 

use permit which expired on 12/21/07. In April 2008, the District started discussions with the 

USFS for a renewal, which could be completed in the next few months. 

The DSPUD covers approximately 13 square miles in Nevada and Placer Counties; provides 

drinking water to 279 customers, wastewater collection and treatment to 264 residential and 

commercial customers in the communities of Norden and Soda Springs; as well as Sugar 

Bowl, Boreal, Donner Ski Ranch, and Soda Springs Ski Areas. [Sewer connections are 

measured in Equivalent Dwelling Units (EDU’s). DSPUD bills 540 commercial and 225 

residential EDU’s, for a total of 765 EDU’s.] 

An agreement with the DSPUD provides Sierra Lakes County Water District (SLCWD) 44% 

of the capacity of the wastewater treatment plant to serve the Serene Lakes Community in 

Placer County and 3000 acres in Placer County. SLCWD bills 805 customers for sewer 

service.  

The District is negotiating an agreement with the Big Bend Mutual Water Company, which 

serves a Homeowners Association containing 32 cabins, to provide management and 

administration of Big Bend’s water service. 

The District is governed by a five member elected Board of Directors. The District has 83 

voting constituents, 71 residing in Nevada County and 12 in Placer County. It holds 

regular monthly dinner meetings. There is a paid staff of 6 full-time and 2 part-time people, 

comprised of the General Manager, two administrative staff, and five plant and field 

personnel. The 2007-8 budget estimates revenues of $1,625,285 and expenses of $1,592,936.   

It is the Jury’s understanding that some years ago DSPUD and SLCWD had discussions 

about merging the two districts. These discussions were terminated after several meetings of 

the parties. 

A dispute arose between DSPUD and TFPD regarding which agency should receive funds 

for services provided to Nevada County Service Area 31 and other Nevada and Placer 

County areas outside the DSPUD during the fiscal years 2004-5 and 2005-6. The Board filed 

a breach of contract lawsuit in 2007 to require the disputed funds be returned to the DSPUD. 

This litigation has recently been settled. 

Some wastewater discharge violations are inherent in wastewater treatment operations. 

However, during the period 2001-2006, DSPUD experienced 76 discharge violations, for 

which the California Regional Water Quality Control Board (RWCB) imposed fines totaling 

$216,000. The RWCB later waived the fines in consideration of DSPUD applying an equal 

amount toward the recently completed upgrade of its wastewater treatment facilities. 

The State of California has assigned "Beneficial Uses,” to the South Yuba River, which 

includes municipal and domestic drinking water supply, agriculture uses, water recreation, 

and wildlife habitat. Disposal of wastewater in the South Yuba River by DSPUD is a use that 

is not prohibited; however, such use cannot be satisfied to the "detriment of beneficial uses.”  

In 2007, Royal Gorge LLC announced plans to redevelop approximately 400 of the 1300 

acres of the Royal Gorge Cross Country Ski Area, situated in Placer County. The proposed 

development envisions 950 residences and other resort facilities. Royal Gorge LLC has held 

preliminary discussions with DSPUD regarding expansion of the wastewater treatment 

facility to service the proposed development. 

Method of Investigation 

The Jury conducted interviews with the President, and one other member of the Board of 

Directors of the DSPUD (Board), the District’s General Manager, the District’s Plant 

Operator, the President of the Board of Sierra Lakes County Water District and the General 

Manager of the Sugar Bowl Ski Resort, as well as reviewing DSPUD financial, and business 

records. Members of the Jury attended a Board meeting and reviewed Local Agency 

Formation Commission (LAFCO) records regarding DSPUD. The Jury reviewed financial 

and organizational records of other public agencies in the area that provide services 

comparable to the DSPUD including the Tahoe-Truckee Sanitary Agency (T-TSA), the 

Truckee Donner Public Utility District, the Tahoe City Public Utility District, and the Town 

of Truckee.  

Findings 

1. The President of the Board receives $300, the Vice-President receives $260 and the 

Directors receive $225 per regular monthly meeting. In addition, each director 

receives $100 for any other meetings. They are paid whether they attend or are 

excused. The monthly meetings include complimentary dinner for everyone present. 

The current budget includes direct Board expenses of $16,820. By comparison, the 

Truckee-Tahoe Sanitary Agency, operating a larger wastewater treatment plant, and 

whose budget is 7.5 times that of DSPUD, includes $12,000 in its current budget for 

Board of Directors’ fees and expenses. 

2. Other than the licensed operating personnel, there is no engineering expertise on site 

to evaluate the information received from retained outside consultants. The Board 

members, three of whom, are in their first term, and the General Manager rely on 

these consultants for technical knowledge and expertise at an annual cost of $247,000 

(Includes Chief Plant Operator for part of the year). 

3. A comparison of salaries (Attachment A) shows that the salaries of the General 

Manager and the Chief Plant Operator are higher than comparable positions at T- 

TSA. The T-TSA has a ’07-08 Operating Budget 7.5 times larger than DSPUD, and 

61 staff positions compared with six full-time and two part-time employees at 

DSPUD.  

4. The District is spending $30,500 to insure property valued at $11,867,000. By 

comparison, the T-TSA is spending $30,000 to insure property valued at $68,000,000. 

5. The District does not have reserve funds. 

6. Failure to have an operating website makes it difficult to provide stakeholders with 

relevant information. 

7. The minutes of the Board meetings are inadequate to provide a clear understanding of 

Board activities. 

8. The minutes of the Board meetings indicate that with the exception of invited guests - 

attorneys, engineers, potential new board members, etc - almost no stakeholders 

attend Board meetings.   

9. The dispute with the TFPD was a result of DSPUD staff failure to execute the 

contracts with Nevada County for two years to provide fire services to County 

Service Area 31 and other Nevada and Placer County areas outside the DSPUD. It 

involved approximately $63,000 claimed by DSPUD and the TFPD cross-complaint 

for $164,462 in damages. The settlement provided that DSPUD receive $25,000 to be 

spent to upgrade of the water distribution system and $5000 to upgrade the fire station 

to meet code. TFPD will spend $33,000 to upgrade the fire equipment serving the 

Donner Summit area.  

10. Under the agreement between the DSPUD and SLCWD, DSPUD is entitled to 56% 

of the capacity of the wastewater treatment plant capacity and SLCWD is entitled to 

44 %. DSPUD has 83 registered voters from which to draw Board members. SLCWD 

has no representation on the DSPUD Board. 

11. For ten months of the year, DSPUD discharges wastewater to the South Yuba River 

in the amount of 0.52 million gallons per day with the capacity to be expanded to 0.80 

million gallons per day by 2010. In dry or cold years, the stream is low, and high 

wastewater flows can be discharged into low stream flows.  

Conclusions 

1. While the T-TSA is much larger than the DSPUD, its operation of a wastewater 

treatment plant makes it the most logical agency in the area to compare with the 

DSPUD. 

2. While it is necessary to attract citizens to participate in the governing process, the 

high fee schedule for DSPUD Directors, paying them even if they do not attend a 

meeting, and serving dinner at regular meetings, sends the constituents and the public 

the wrong message.    

3. Salaries paid by DSPUD to senior level employees seem excessive when compared 

with T-TSA (see Attachment A).  

4. The DSPUD property insurance cost is considerably higher than T-TSA given that the 

insured property value is one-sixth that of T-TSA  

5. Communication with the stakeholders is not being given sufficient priority by the 

Board and staff.  

6. The engineering, technology, capital investment, and personnel requirements of the 

DSPUD plant will require significant upgrade to ensure proper disposal of increased 

treated wastewater.  

7. The Board appears to be relying largely on staff and counsel and demonstrates little 

oversight, questioning and judgment.  

8. The failure of the General Manager to execute the contracts with the County for fire 

services and the delay in negotiating a special use permit with the USFS displayed 

inadequate oversight and direction on the part of the Board.  

9. The practice of DSPUD of discharging large quantities of wastewater into the low 

flowing South Yuba River poses a threat to the beneficial uses of the river. 

Recommendations 

1. The District should embark on an extensive training program to equip the Board and 

Staff with the knowledge and skills to manage the District’s future needs.  

2. The District should give high priority to developing and executing a communications 

strategy that will open the window for all stakeholders and interested parties. They 

should complete the upgrade of the web site; expand the content, include on the web 

site the Board Meeting Minutes, and publish a regular newsletter.   

3. The District should develop a policy for establishment of reserve funds and create 

such funds.   

4. The District should investigate the extent of new technology that is or may become 

available to discharge wastewater - for example, year round subsurface disposal of 

wastewater. 

5. The DSPUD and its related stakeholders should carefully and completely explore all 

potential impacts on current users of the system and others affected before entering 

into any agreements with Royal Gorge LLC or any other future development. 

6. Nevada and Placer County LAFCOs, together with the DSPUD and SLCWD, should 

explore the feasibility of a merger of the two districts.  Boards of both districts should 

seek alternate means to provide representation to the large number of users in the 

SLCWD who have virtually no voice in the affairs of the District.  

7. The Board should exercise greater supervision over the General Manger. This 

supervision should include measurable performance indicators linked to his major 

duties and to the District’s objectives. 

Required Response 

 Donner Summit Public Utility District Board of Directors: October 6, 2008 

Attachments 

Attachment A    DSPUD – Selected Comparisons, dated 11.13.07 revised 4/13/2008 

Donner Summit PUD - Selected Comparisons 

            *Only benefit is Long Term Disability Insurance 

4/13/2008