In January of 1977, for a purchase price of $4,700,000, the MWD acquired title to the dam, the Lake bottom lying beneath the Lake and the surface recreation rights to Big Bear Lake. It was necessary to acquire these properties so that the District could properly manage the environment of the Lake, as well as the Lake level. As part of the purchase, the District issued promissory notes in the amount of $1,700,000. These notes were to be repaid out of the property tax revenues of the District.  In 1978, however, Proposition 13 reduced the District's property tax revenue by over 60%.  This caused the District to default on the notes and force the creation of an alternate means to complete the purchase of the Lake.  After many public meetings and a mail-in property owners ballot, the Big Bear Municipal Water District

established an assessment district which levied an assessment on all land in the valley to raise the needed funds. The assessment proceedings were completed in the summer of 1981 and the acquisition was finalized.

With regard to the water rights, all parties to the original lawsuit agreed to a stipulated judgment in the adjudication of the water rights. The judgment established a physical solution to the water rights dispute. The physical solution is a method wherein the Municipal Water District can maintain water in the Lake while, at the same time, the irrigation interests downstream can be satisfied. (In-Lieu). In practice, each year Bear Valley Mutual Water Company determines the irrigation needs downstream and estimates the demand on Big Bear Lake to meet these needs. The MWD then has the option of either supplying this needed water from another source (mainly the State Water Project and the Upper Santa Ana groundwater basin) or releasing the water from the Lake. In this manner, the District can maintain the Lake at an elevation significantly above its historical level.

The District did not acquire the water rights in Bear Creek. The value of the water rights in the early 1970's was determined to be a major expenditure beyond the financial capability of the District at that time. In addition, it was felt that there was no need to acquire more than was actually needed to maintain the recreational benefits of the Lake.