When the Eaton fire raged through neighborhoods in Altadena, the flames leveled three-quarters of the homes served by the tiny Las Flores Water Co. It also destroyed the roofs of two covered reservoirs where the utility stored drinking water.
The company soon restored clean water to those homes left standing. But the disaster has left it with costly repairs, and a sharp drop in income since most of its 1,500 customers haven’t yet rebuilt or reconnected their water.
Attempting to avert financial failure, the private water company’s board now plans to start charging people a new “fire recovery fee” of about $3,000 over the next five years, or about $50 a month.
It’s the best way to avoid insolvency, said John Bednarski, president of the Las Flores board. Its reserves, now roughly $500,000, are shrinking.
“It’s a stopgap,” Bednarski said. “We need an infusion of sustainable funds to keep the company solvent.”
The Eaton fire in January 2025 destroyed more than 6,000 homes and over 3,000 other structures.
Las Flores Water Co. is the smallest of three private water utilities in Altadena. All are grappling with budget problems after the fire and adopting plans to charge more.
Of the three, Las Flores faces the most severe cash-flow shortfall. The increase in water bills is expected to be adopted soon, affecting hundreds of property owners, including some who still haven’t been able to return home.
“It doesn’t feel fair,” said Morgan Z Whirledge, a member of the Altadena Town Council who lost his home. “That’s a lot for people to stomach, especially at a really vulnerable time.”
The plan is adding yet another complication and more stress for people who are struggling with insurance, building permits and other challenges as they try to move back, said Nick Stentzel, a homeowner whose house is damaged and who is staying in Echo Park.
“It feels very dire,” he said.
When Las Flores’ board members presented their plan for the new fee to about 200 residents at a night meeting on Jan. 22, Stentzel said some were angry and shaken.
“People are struggling,” he said. “It’s also the cost of everything going up.”
Stentzel, who owns a small TV production company, said he and his husband will be able to afford the higher water bills, but it will be tough for some of their neighbors. Las Flores’ customers already were paying relatively high bills, he said, and now a typical household could end up charged around $200 a month in all.
He said he is worried about the water company’s future because from everything he has heard, it’s “not a very viable business.”
The disaster has destabilized local utilities that for generations quietly kept faucets flowing in Altadena. The three water companies were founded more than a century ago, when Los Angeles was still a fledgling town surrounded by farms, and miners were prospecting for gold on the slopes of the San Gabriel Mountains.
Now, some residents say the water companies should merge to cut costs and streamline operations — an idea that has prompted debate among managers of the three utilities.
Las Flores Water Co.’s extra fee, which will apply only to those who have their water service turned on, is slated to stay in effect for five years while its directors work on long-term solutions.
“It makes me very nervous that we’re throwing money at an incomplete plan,” said Sharon Sand, who lost her home and is rebuilding. “What’s going to happen if we all put this money in and then they still fail? And what’s the backup plan?”
While her family’s home is being rebuilt, they are paying for water to keep their plants and trees alive.
Sand said she would like the water company to be more transparent and provide details about its financial situation so she can better understand its predicament.
Each of the companies is owned by the property owners it serves, who are officially shareholders.
Las Flores serves a territory covering less than a square mile, wedged between its larger neighbors, Lincoln Avenue Water Co. and Rubio Cañon Land & Water Assn.
Leaders of Las Flores and Lincoln Avenue recently told state regulators they will study the option of merging — something distressed small water systems sometimes do when faced with contaminated drinking water or failing wells, although the process is lengthy.
Supporters of the idea say a combined utility would be able to cut costs by reducing the number of employees. Las Flores now has four employees, while Lincoln Avenue has 11. They say it could also better pursue funding to rebuild and expand, creating a more interconnected system of pipes and reservoirs.
Lincoln Avenue lost 58% of its customers and revenue after the fire, and now supplies water to about 2,400 customers, said John Clairday, the company’s board president.
To offset its losses, Lincoln Avenue is raising water bills in March by about $15 per month for a typical customer.
“We have adequate reserves,” Clairday said. “We’re not on the verge of bankruptcy by a long shot.”
Clairday said the board is open to studying a merger but hasn’t yet decided. The consolidation study will involve assessing the financial condition of both companies and the state of their systems.
Lincoln Avenue’s board members want to make sure their shareholders “would be treated fairly” for the money they’ve invested in infrastructure, Clairday said. “We’ve put over $20 million into the system over the last two decades. So we consider our system to be in excellent shape.”
Las Flores, in contrast, estimates that rebuilding the two destroyed reservoirs, which were only partly insured, may cost more than $10 million. The new $50-a-month fee will cover only the company’s operating costs, so the utility’s leaders plan to seek other funding for these repairs.
Adding to the complications, Altadena’s water agencies are also suing Southern California Edison, claiming its transmission line started the fire. Edison, in turn, is suing the water utilities, claiming there wasn’t enough water available for firefighters.
The area’s third private water company, Rubio Cañon Land & Water Assn., has similarly lost revenue since the fire destroyed some 30% of its customers’ homes.
On Tuesday, its board plans to hear from residents on a proposed 11% rate hike, plus a fire recovery charge that could be between $10 and $30 a month.
The increases are intended to keep Rubio Cañon “solvent with reserves readily available to fund necessary improvements,” General Manager Lisa Yamashita-Lopez said in an email.
However, Rubio Cañon’s board has looked at its financial situation and “does not believe that consolidation would be in the best interest of the Association’s shareholders,” she said.
Managers of all three utilities say they are seeking help from the state and the Federal Emergency Management Agency, among other sources.
UCLA researchers said in a report last year that because these small water systems are struggling financially, “sustained local, state, and federal support is essential.”
Such problems will probably beset other utilities in the western U.S. in the coming years as climate change drives larger and more intense wildfires.
L.A. County Supervisor Kathryn Barger, whose district includes Altadena, has called for improving the water system to make it more resilient as the community rebuilds. She has also supported the idea of merging utilities, though the county has no formal authority over the companies.
Barger has contacted Gov. Gavin Newsom’s office and other state officials, advocating for long-term solutions so people in the fire zone don’t end up with higher costs, said Anish Saraiya, the supervisor’s Altadena recovery director.
Merging the utilities would help “most efficiently and cost-effectively deliver water to these communities,” Saraiya said. “Anything we can do to help drive down the costs that face our families is something that we should pursue.”
