Water District Paid $144,000 for Land Appraised Under $12,000

Sunnyslope County Water District is using a $13,274,684 state drought-relief grant⧉ -- California's Department of Water Resources awarded San Benito County $13.2 million in April 2023⧉ to consolidate three failing small water systems into Sunnyslope's own -- to buy the land rights it needs to connect them.▸ A June 2026 San Benito County civil grand jury investigation⧉ found that one of the six required easements alone cost Sunnyslope $144,000 in cash and water-connection fees, for a parcel its own appraisal valued at less than $12,000, while a second landowner was promised well water free, forever. As of the report's release, Sunnyslope had not produced a single signed contract for either deal.

The grant sets aside $287,500 to acquire all six easements the Small Water Systems Consolidations with Sunnyslope Project needs to connect the Tres Pinos, Stonegate, and Venture Estates systems to Sunnyslope's own.▸ The grand jury's review of the district's own compensation records⧉ found the Highway 25 Transmission Easement alone -- $100,000 in cash plus $44,000 in water-connection fees -- consumed about half of that budget, on a property the report says was appraised at under $12,000: a markup of at least 12 times, since the county's own figure is stated only as a ceiling.

Sunnyslope's board accepted the remaining five easement proposals at a January 27, 2026 meeting, using appraisals rather than eminent domain to reach agreements -- eminent domain can take up to 18 months to settle⧉, and the project's bond financing required construction to finish before that clock could run.▸ Board members and staff told the grand jury they had known the easements were needed for at least two years before negotiations began.

The second documented deal is stranger: the Foxhill Tank Easement's compensation includes an unspecified cash sum plus half an acre-foot of well water every year, in perpetuity -- a benefit Sunnyslope staff estimated, in an interview with the grand jury, at roughly $2,000 a year⧉ to the customer.▸ Multiple interviewees told investigators that granting water forever as payment was unusual, and some said it could be read as a gift of public funds -- a category of spending California local agencies are generally barred from making.

None of this can be checked against the actual paperwork.▸ The grand jury requested Sunnyslope's signed easement contracts⧉ and, as of the report's release, had not received them; when investigators asked staff and board members whether the contracts had even been signed, nobody could confirm it. The dollar figures above come from staff interviews, not from documents the grand jury was able to independently verify.

The same investigation found Sunnyslope changed how it bills sewer customers -- from incremental to flat-rate -- for the April 2026 billing cycle, without the 45-day public notice California's Proposition 218 requires⧉ before scheduling a rate hearing.▸ Fourteen Ridgemark residents filed formal complaints at the May 19, 2026 board meeting after their bills jumped; the board's own agenda for that meeting proposed approving the new rate and mailing the required notice only afterward. The grand jury's Finding F1 orders Sunnyslope to suspend the rate change if needed and rebate the difference to affected customers by August 19, 2026.

A separate finding shows the pattern isn't limited to the consolidation project: Sunnyslope entered a two-year, $40,000 consulting contract⧉ to advise the City of Hollister -- about 2.7 times the district's own $15,000 threshold for contracts that require board review -- and records don't show the board was told before it was signed.