WATER WAR SIERRA COLONY RESIDENTS CLAIM WINERY ILLEGALLY TAPPED WELL LINE.

Byline: Naush Boghossian Staff Writer

AGUA DULCE - Along a dusty stretch of road marked by rocks and rolling hills sits a pocket of paradise - a rural neighborhood of million-dollar estates overlooking a thriving vineyard.

But beneath the surface of this bucolic landscape in Agua Dulce - Spanish for ``sweet water'' - there is a war over the water.

Residents of the Sierra Colony Ranch have rallied to fight the developers of their community, fighting over the limited groundwater supply doled out by a mutual water company.

The owners of the vineyard, partners in developing the neighborhood and establishing the water company, are the target of a lawsuit that claims they have rigged illegal well lines to water their grapes, leaving residents with taps that spray air mixed with trickles of water.

``It's interesting that when there's air in the lines and we don't get a flow of water, it correlates with the time when the vines start growing,'' said resident Carey Lee Moisan, a member of the board of the Sierra Paloma Valley water company, established in 1992 with the property owners as shareholders.

Named in the lawsuit are Don and Cathy MacAdam, Ray Watt and Werbco Construction Corp. The MacAdams and Watt are partners in Agua Dulce Vineyards. Watt initially developed the homes, later taken over by Werbco.

The lawsuit has not yet been served, and an incensed Don MacAdam said he believes it sits dormant in Los Angeles Superior Court as an intimidation tactic.

The MacAdams insist they have done nothing wrong, and Watt could not be reached for comment. Werbco did not return telephone calls. Don MacAdam said he believes the residents are trying to get him to pay them $500,000 to drop their complaints.

In what sounds like something out of a movie, the owners of the tony homes - ranging from a music video producer and a mortgage banker to the owner of a floral design studio in Hollywood - resorted to using divining rods and metal detectors around their community in the middle of the night. They claim in their lawsuit they found what they suspected: lines they say were illegally attached to their main line and directed to the fields of grapes.

With the help of a professional they hired, the residents said they found and severed 15 illegal lines, according to court documents.

``He's sucking water at a huge rate for the vineyard and the aquifer is depleted,'' said Manny Fernandez, also on the water board. ``At the rate we're going, we're going to be left without water.''

Don MacAdam said that isn't true.

``There's never been a breakdown, never been a failure in service,'' he said.

Since the single operational well is the key to the area's water service, residents are taking no chances with their delicate utility system.

They paid to have a barbed-wire fence around the well and have hired guards to keep an eye on it at night to make sure the lines aren't tapped.

In fact, people in the area have established a network where if one homeowner notices noise or the light from a flashlight near the well, they'll call each other and head to the well.

``We've run out in various states of clothing because this is our only well,'' Moisan said.

When buying their homes, Sierra Colony Ranch residents agreed to pay about $6,000 a year in special Mello-Roos taxes that would pay off tax-exempt bonds issued by the county to pay for public facilities including roads, storm drains and the water system - including two wells.

While the county reviewed the public facilities before paying the contractor, they never inspected the wells. That, they said, was the responsibility of the public utility company in place - in this case, the mutual water company. Until last summer, MacAdam and his wife Cathy MacAdam sat on the three-member board.

According to Nelson Nelson of the county Department of Public Works, the MacAdams sent the county a letter saying that the two wells, for which the county paid $1.3 million, were acceptable.

But they never claimed they were operational, Nelson said.

``We're getting into semantics,'' said Nelson, section head in charge of permits and subdivisions for the department. ``Believe me, if we knew the two wells were not operational, then we would have been less likely to pay for the cost. This Mello-Roos pays for facilities that are operational.''

Nelson said the problems began because the MacAdams, rather than the shareholders, were running the water company for so long. The homeowners say the ousted the MacAdams; the couple say they resigned from the board.

``The thing that's questionable is that the system is paid for by Mello- Roos,'' Nelson said. ``The problem with the MacAdams is it's kind of a conflict of interest issue when you yourself run the water company and you allow yourself to tap into that water system, yet you yourself are not paying into the Mello-Roos.''

In addition to the yearly tax, residents pay $150 per month for water, operating costs and maintenance. But when homeowners took charge of the water company, the fund had a balance of $1,000.

``If they're paying into this thing for the last 10 years and paying $150 per month for maintenance and money, there should have been a reservoir of money, and that doesn't exist, so the whole thing looks kind of suspicious,'' Nelson said.

Don MacAdam said the money in the account was used to pay outstanding debts.

Still, a Los Angeles County sheriff's detective is investigating the complaints about missing money and the county will conduct an audit of the Mello-Roos district.

``It appears that although the winery ... was never part of the official water system, somewhere they started tapping into the water system and getting water. That wasn't authorized because they weren't paying into the Mello-Roos,'' Nelson said.

And residents are incensed that the water system into which they had regularly been paying had been neglected through the years and there was no significant balance left over.

``There's missing Mello-Roos money, missing wells,'' said resident Deborah Laube, whose family was the first to buy in Sierra Colony Ranch. The Laubes have paid close to $50,000 in taxes over 10 years.

``And now, guess what, I don't have a well,'' she said.

Residents, meanwhile, face a trespassing lawsuit filed by the winery after entering the vineyard where the controls of the water system are located.

All residents have agreed to increase their monthly water fees to $350 to help offset the $170,000 in attorney fees they've accrued so far.

The conflict has brought the residents of the community together in an effort to protect their hefty investment.

``We don't have a personal vendetta. This is about what we've paid for and what we don't have,'' said resident Todd Huth.

One unexpected development is that the residents, who are mostly from the city and are used to paying a water company bill, have all become experts on the intricacies of water systems.

``Now we're all experts. We learned the hard way,'' Fernandez said.

Those involved in fighting the developers know how to read the water system blueprints and are well versed in the science of operating a water system.

``All we wanted was a home and water when you turn on the faucet,'' said resident Mark Foster. ``Now we're all experts on wells.''

CAPTION(S):

7 photos

Photo:

(1 -- 2 -- color in SAC edition only) A Sierra Colony Ranch resident took the picture above reported to be workers spraying vines shortly after Agua Dulce Vineyards claimed not to be using pesticides. Residents of the community of million-dollar estates, below, have filed a lawsuit claiming the vineyard illegally tapped into water lines from their only operational well.

(3 -- 4; 4 ran in SAC edition only) Despite the bucolic-sounding name of Sweetwater Drive, above, residents of Sierra Colony Ranch are up in arms over what they say were illegal taps into their well line. At right, a water line which once came from the community's only well and fed the Agua Dulce Vineyards has been shut off by residents, who now operate the water system.

(5 -- ran in SAC edition only) A photo taken by a Sierra Colony Ranch resident shows part of what is claimed to be an illegal tap into the community's well line by a neighboring vineyard. The photo lies on a copy of plans for the original Mello-Roos water district.

(6 -- ran in SAC edition only) Manny Fernandez, director of the Sierra Paloma Valley Water Co., unlocks the gate on the Sierra Colony Ranch's only operational well. Residents claim that neighboring Agua Dulce Vineyard has been stealing water from their system.

(7) A water line which allegedly once came from the Sierra Colony Ranch well and fed the Agua Dulce Vineyards is shown in this photo taken by a resident of the upscale community after they paid to dig into the well to see where the water was going.

David R. Crane/Staff Photographer