Line on Map Puts Project on Hold

The Millerton New Town -- more than 3,000 houses rising in the foothills above Fresno -- was all set for approval when it quietly disappeared from the agenda of the Board of Supervisors a few weeks ago.

At the last minute, the builder decided not to seek the board’s go-ahead after it was revealed that the entire development was based on a supply of federal water that didn’t exist, at least not legally.

But no one here -- not the developer or the county or the U.S. Bureau of Reclamation or environmental critics -- is willing to say that the project is dead just yet. After overcoming 20 years of political, financial and environmental roadblocks, the Millerton New Town has proved to be nothing if not a resilient idea.

The developer, Ben Ewell, a onetime water attorney himself, is working feverishly to shift a single line on an old reclamation map, moving it from one side of Millerton Lake to the other.

As it sits today, Ewell’s land is on the wrong side of the line, occupying a zone that won’t allow federal water to be used for cities and towns. Instead, his land is located in an area where water use is restricted mostly to farms and livestock.

The predicament is unusual. Reclamation officials said they could not recall a similar situation where a large-scale development, after years of local and federal oversight, was halted on the eve of construction by water boundary troubles.

All it would take for the future town of 10,000 people to drink water straight from Millerton Lake would be to move the line a few miles to the east. But expanding the municipal boundary is no simple task, state water regulators say, especially when environmentalists and some farmers now using the water are lining up in opposition.

“Moving a line drawn in the sand is quite an ordeal,” said Liz Kanter of the state Water Resources Control Board, which will ultimately decide the matter. “There is no way to fast-track it.”

Ever since the federal reclamation bureau acknowledged to The Times in late January that Millerton New Town was based on a water diversion that state regulators considered illegal, Ewell has insisted that the line is a mere technicality. Hoping to avoid a lengthy process to expand the municipal boundary, he has hired one of California’s top water-rights attorneys, Ed Tiedemann, and begun meeting with reclamation managers.

Federal officials say they intend to soon petition the state water board to move the line and clear the path for the new town 10 miles outside Fresno, where blue oaks and golden pastures give way to rocky foothills.

Tiedemann, based in Sacramento, said Ewell long ago relied on the word of the reclamation bureau that his land was inside the municipal use boundary. That assurance led Ewell to buy rights to more than 2,300 acre-feet of federal water and to spend several million dollars installing pumps in the bottom of the lake and building a water treatment plant.

“Now all of a sudden this question arises,” Tiedemann said. “The bureau is saying he’s outside the municipal line. But their map is kind of vague. Our position is that it isn’t crystal clear where the line is.”

Over the past two decades, Ewell has managed to keep alive the project through failed partnerships, lawsuits, foreclosures, and a tax debt to the county of nearly $2 million. Now he finds himself facing a delay that could complicate his dealings with impatient partners, home builders and lenders.

Ewell did not return phone calls seeking comment. County officials who have met with Ewell and partner John Bonadelle Jr., a builder, said the two men remained confident. The line, they vowed, will be changed.

But state water regulators said that allowing San Joaquin River water to be diverted from the lake to grow a new town will likely involve a new environmental impact report, staff studies and hearings. The whole process could take anywhere from one year to as many as 10. “It could easily take a few years and even longer if the environmental impact report is not adequate,” said Barbara Leidigh, a water-rights attorney for the state water board. “Nine times out of 10, the line change is granted, but the bigger fight is over mitigation. How do you offset the impacts to the environment and to water users downstream?”

By all accounts, the bureau first assured Ewell 20 years ago that his proposed town would be allowed to receive federal water. But letters between the parties also reveal that reclamation officials put Ewell on notice as early as 1995 that at least a chunk of his 2,000 acres was not eligible for federal water.

At the time, the bureau told Ewell he could not use federal water on more than 200 acres of land, including a portion of a golf course he had built. But Ewell ignored the reclamation bureau’s order, he later acknowledged, continuing to divert water outside the line. The bureau did nothing to stop him, records show.

Then a year ago, reclamation officials informed Ewell that a further study of the map showed he had a much bigger problem: All but a sliver of his proposed town sat on the wrong side of the line. He thus had no legal right to divert water for “municipal purposes,” which are defined in state code as the “water supply of a city, town or similar population group.”

By then, Ewell had signed over his pumps and water system to Fresno County, which became the official purveyor to the development.

For the past year, each of the parties -- the county, the reclamation bureau, the developer -- has been aware of the boundary problem, they acknowledge.

But the project continued to sail through the planning process without county supervisors ever being told of the complication.

At no time, records show, did bureaucrats for the county or federal government advise Ewell that he could not go forward. Only after questions were raised in late January by The Times did officials and Ewell publicly acknowledge that the new town could not legally receive federal water.

Reclamation officials say they are petitioning the state to move the line on behalf of Fresno County and not Ewell.

“As long as the water is being put to a beneficial use, we don’t dictate to the county about who they serve,” said Jeff McCracken, a bureau spokesman. “If it happens to be a farmer or a developer, it’s fine with us.

“We aren’t land-use planners or regulators,” McCracken said. “We’re a provider of water.”

For their part, foes of the new town say the dispute gives them another chance to raise concerns about the project’s harm to the water and air. They say the environmental impact report, more than two decades old, is no longer relevant.

“The Millerton New Town is one of worst examples of old school, leapfrog growth,” said Kevin Hall, a former county planning commissioner, who handles air quality issues for the Sierra Club’s local chapter.

“This is what happens when you allow developers, rather than county planners, to design a new town,” Hall said.

Lloyd Carter, a water-rights professor at San Joaquin College of Law, who heads Save Our Streams, argues that no developer should be allowed to divert water from the river until dry stretches can be restored with water and fish.

“This finally will force the state water board to do something that it should have done a long time ago, and that’s protect the public’s interests in the river,” Carter said.

“For too long, the state has looked the other way as the bureau of reclamation has given away the river, first to growers and now to developers.

“The board should do the right thing and restore the river first,” Carter said. “Let the growers and developers fight over the water that’s left over.”