Almost two years after residents along the southern shore of Lake Berryessa agreed to pay for an overhaul of their water and sewer systems, work on the project has yet to begin.

At issue is a contract between the U.S. Bureau of Reclamation and the company selected a year ago to run Steele Park Resort. Bureau officials announced in April that the Pensus Group, an Arizona-based operator, had been selected to run Steele Park — as well as four other lakeside resorts — and that Pensus was expected to pay 31 percent of the $14 million water and sewer assessment.

Almost a year later, the contract has yet to be awarded.

The Napa Berryessa Residential Improvement District, a special district overseen by county officials, will not sell $14 million in bonds to upgrade the sewer and water treatment plants and build an additional water storage tank as long as the contract is not signed.

In limbo for months, district officials are considering raising water and sewer rates to pay for the costs of maintaining and improving the existing, aging infrastructure to comply with state regulators. The state Regional Water Quality Control Board determined in 2006 the district was out of compliance with state regulations.

District officials are also considering entering a contract with CalWater, a private utility, to run NBRID and the Lake Berryessa Resort Improvement District, a special district near Putah Creek.

A frustrated Napa County Supervisor Diane Dillon, who is in Washington D.C. this week to lobby federal legislators on behalf of rural counties, said she wants to meet with the legislative staff overseeing the Bureau of Reclamation. She hopes the “powers that be” will help expedite the contracts between the potential concessionaires and the bureau.

She said Friday she wants to know if Pensus Group will pay a third of the assessments.

“We don’t know that,” she said.

Rep. Mike Thompson, D-St. Helena, is also getting involved. On March 3, he sent a letter to John “Bill” McDonald, acting commissioner for the Bureau of Reclamation, requesting an update on the status of the contract negotiations between the bureau and Pensus Group as well as with another would-be Berryessa resort operator. He also requested that the federal agency brief Dillon.

“I am deeply concerned with the amount of time it is taking Reclamation to negotiate new concession contracts with the Pensus Group and Markley Cove,” he wrote in his letter. “These two prospective concessionaires were successful bidders chosen last spring. Why haven’t the concession contracts been awarded? This delay has caused significant economic hardship to residents, local businesses and the county of Napa.”

Thompson’s letter may have fallen on deaf ears. “We have not received an answer to our letter yet,” Laurel Brown, spokeswoman for Thompson’s office, stated Tuesday.

The stalemate with the bureau has left Berryessa Highlands resident Tracy Renee frustrated. “It’s just totally ridiculous,” said Renee, who supported the assessment in 2007.

She has proposed a new fee to pay for the operations and maintenance of the district. “You have to be responsible,” she said this weekend. “You can’t spend the money you don’t have.”

In the meantime, NBRID representatives said they have been excluded from discussions with the bureau.

According to a March 3 memorandum from Janice Killion, attorney for the county and the district, the bureau “has excluded district staff from any discussions with the proposed concessionaire, and has not yet executed a new concession contract. It is unknown when or if Steele Park Resort will reopen, which has interfered with the district’s ability to move forward with infrastructure repairs, and has caused financial uncertainty for the district.”

Bureau of Reclamation spokeswoman Lynnette Wirth said Tuesday the contract is under review. She declined to give more details. “There is a lot at stake here,” Wirth said.

Georgi Maule-Ffinch, counsel for the Pensus Group in Arizona, said Tuesday the negotiations with the  Bureau for Steele Park concluded in December. The bureau is reviewing the contract, she said.

“We’re just waiting to sign the final contract,” Maule-Ffinch said.

Meanwhile, things are winding down at Steele Park, where most mobile home owners have pulled their property out in expectation that a new concessionaire would be taking over.

Dave Hanson, the marina manager for the resort, said about 50 mobile homes are left. The motel, store and cottages have shut down.

The marina closes April 1. “It’s sad,” he said.