The leadership of two water districts have taken the unprecedented step of voting to begin the process of detaching from the San Diego County Water Authority -- a move they say will save their ratepayers millions of dollars.
The votes by the boards of the Fallbrook Public Utility District and the Rainbow Municipal Water District this month begins a formal process that could take 18 months or longer and potentially involve a countywide vote.
The issues are nuanced and complicated, officials say, but at the core of what likely will be a contentious dispute is, of course, money.
The Water Authority is made up of 24 water agencies, all of which help pay debts accrued over the years to make the county’s water distribution system reliable and safe. Expanded reservoirs, piping, tanks and many other parts of the system all are expensive and the authority says Fallbrook and Rainbow will need to pay their fair share of that debt should they opt to leave.
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As of now, Fallbrook and Rainbow aren’t offering to pay anything.
The detachment and annexation of the agencies will be overseen by the Local Agency Formation Commission (LAFCO), which is responsible for things like land annexations and special districts.
Keene Simonds, LAFCO’s executive officer, said no agency has ever tried to leave the water authority.
“We’re in unchartered waters,” Simonds said. “We’ve never really been asked in any similar ways to weigh in on this concept of rate neutrality.” He said he will be bringing in a consultant to help advise LAFCO “on this rather specific and nuanced issue -- rate neutrality for the bulk of San Diego County ratepayers.”
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He said LAFCO has a duty to fully assess and make a determination of whether the two North County districts separately walking away from the water authority “merits some sort of fee, an exit fee,” he said. “Typically, that kind of discussion is on a much smaller scale when we do annexation and detachments ... here you have the Water Authority and its other 22 memberTHERE ARE 24 MEMBERS agencies. “The scale and scope of the question is unique to us.”
Simonds said LAFCO would far prefer that Fallbrook, Rainbow and the Water Authority work together to come to “some agreement, if not on a number, at least on the parameters of how to come to that number.” That hasn’t even come close to happening yet, he said, and LAFCO may have to take the lead, which Simonds again said will be like diving into “deep new uncharted waters.”
Fallbrook and Rainbow calculate they can save countless millions of dollars annually by purchasing water directly from the Municipal Water District’sDO YOU MEAN METROPOLITAN?? wholesaler, the Eastern Municipal Water District. They say they are in a unique position to do so because they are the only water districts in the county with direct connections to Metropolitan’s aqueduct and will be able to serve their customers without using any Water Authority facilities.
They say all the improvements and investments made by the Water Authority benefit more urban areas to the south but provide limited benefits to the more rural agricultural communities served by their agencies. The cost of water, because of the authority’s various investments, is over $400 more per acre foot than what Eastern would charge.
Tom Kennedy, Rainbow’s general manager, has estimated switching to Eastern could save $5.5 million to $6 million a year for Rainbow’s customers.
The Water Authority has made it clear it is not pleased.
In late November, it sent letters to all customers in the two water districts:
“Recently, you may have read or heard that two of our member agencies -- the Fallbrook Public Utility District and Rainbow Municipal Water District -- announced that they may pursue plans to detach from the Water Authority and instead rely on a Riverside County water agency for water supplies. If not carefully considered, detachment by these agencies could have significant impacts on water rates and water supply reliability for all water users in San Diego County, including those in Fallbrook and Rainbow.”
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Any such detachment, if approved by the LAFCO board, would require votes by customers in the two districts. However, the Water Authority has asked LAFCO to also consider conducting what would essentially be a countywide election involving all authority customers before final approval would be given.
Sometime in the next few weeks, Simonds said, the formal applications are expected to be filed. That will begin a review process some think could take six months to a year and only then would the matters go before the LAFCO board for consideration. It would be after that before an election could be held, either countywide or just in Fallbrook and Rainbow.
The depth of the dispute can be summarized in the following passage from a letter sent by an attorney representing the authority to the Fallbrook district on Dec. 9, just prior to when its directors voted to authorize the detachment application.
“For almost a year, Rainbow and Fallbrook staff worked in secret to hold meetings with Eastern, engage PR firms, undertake legal discussions with LAFCO, and make extensive preparations to detach from the Water Authority without ever even talking to the Water Authority, which has been its water supplier since the 1940s,” the letter reads in part.
“Once the Water Authority was informed by Rainbow General Manager Tom Kennedy – who said at the time he also spoke for Fallbrook – that your agencies intended to apply to detach, the Water Authority officers promptly met with both General Managers. Since then, the Water Authority has continued to seek a higher level of analysis from your agency in order to fairly and accurately analyze the detachment proposal and ensure that the Water Authority’s member agencies would be able to do the same. We were not even provided with the Draft Plan for Services included in your board packet, and only obtained it in connection with your published agenda item.”
The fact that the Rainbow and Fallbrook districts are working together is a bit ironic. Four years ago, the two water districts were at loggerheads before LAFCO as Fallbrook tried to merge with Rainbow to create one large water district. Rainbow called it a “hostile takeover” attempt and fought to end it, which it did with the LAFCO board putting a stop to the merger issue when hundreds of Rainbow customers came to a LAFCO meeting in downtown San Diego to protest.
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Fallbrook and Rainbow take steps to break from County Water Authority - The San Diego Union-Tribune
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