$33M water system repair up in the air after Sage Mesa residents vote ‘no’
It was a big vote on Saturday for residents in the Sage Mesa neighbourhood near Penticton and the result leaves the answer to the question of who will pay for a massive repair bill on the community’s water system up in the air.
The Regional District of Okanagan Similkameen held a referendum Saturday, April 11, to get approval from residents to takeover the Sage Mesa Water System, a private utility that has fallen into a state of disrepair, as well as approve a $33 million loan to pay for needed repairs.
The preliminary results from the referendum had 317 ‘no’ votes and 136 ‘yes’ votes.
Keeping the utility private means it isn’t eligible for public funds from the province through things like grants, but the residents are seeking money from the province through the lawsuit.
Some residents were concerned that taking out a loan would cause rates to go up dramatically because of the cost of repairs.
“The quote to fix it is $33 million, and the proposed solution is that residents either pay $1,000 monthly for 30 years to fund the necessary repairs, or worse – for each of the 242 households to cough up $137,000. This exorbitant fee is beyond what most families in our community can afford, including mine. Many of us are at risk of losing our homes,” local resident Daniel Gore wrote in an online petition.
The Ministry of Water said that since the vote was a ‘no’ management of the water system will continue as it has been with the regional district running it as contracted by the comptroller of water rights.
But the ministry said that rate increases are on the table since the system still needs repairs.
“The Comptroller of Water Rights is currently reviewing a rate application to increase the rates for the Sage Mesa Water System to support the costs of operations and upgrading of works required. The comptroller is prioritizing the review of the rate application and all information that has been received to date,” the ministry said in an email to iNFOnew.ca. “A statutory decision will be made on the rate application.”
The ministry didn’t say how much rates could go up, and it didn’t comment on the pending lawsuit.
The complexity with the water system comes from the fact that it’s a privately owned utility, but publicly managed.
The Ministry of Water seized management of the water system in 1990, and then contracted out its day-to-day management to the regional district in 2009, even though it’s still technically owned by MK Chapman.
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The province seized all management of the Sage Mesa Water System in 1990, and has run it into the ground to the point where the liabilities exceed the assets. After 36 years of Provincial mismanagement, their solution is to have 242 taxpayers pick up the tab to fix it in the tune of $239,000 per household. The private owner MK Chapman passed away July 7, 2025. All shareholders of the company are now deceased. Interesting that the Province pushed for a referendum before a year passed from MK Chapman’s death. We will be checking on June 27, 2026 when the company filings are complete, if the province technically owns the water system. Not sure why the RDOS decided it was a good idea to push Area F citizens into financial ruin for a Provincially seized water system. Why didn’t they tell the Province “you mismanaged it, you fix it”. Now here we are as homeowners in limbo. Shame on the Province, and shame on the RDOS.