LAFCO holds workshop on water sharing; FPUD/RMWD merger topic may begin Dec. 19

On Dec. 2, San Diego County's Local Agency Formation Commission (LAFCO) held a workshop on water, wastewater, and recycled water issues, and Valley Center Municipal Water District general manager Gary Arant included efforts of North County water agencies to share facilities and services.

The workshop was moderated by LAFCO local government consultant Harry Ehrlich, who provided an overview of the workshop format, a summary on LAFCO water policies, requirements of the Cortese-Knox-Herzberg Act which covers jurisdictional changes, and the roles of local agencies.

In addition to Arant, the presenters were San Diego County Water Authority director of water resources Ken Weinberg, Olivenhain Municipal Water District general manager Kimberly Thorner, and Padre Dam Municipal Water District general manager Allen Carlisle. The intent of the workshop was to provide LAFCO commissioners with current information on the recent multi-year drought and to begin setting priorities and strategies for 2015 and beyond.

The LAFCO board will likely hear the proposal to consolidate the Fallbrook Public Utility District and the Rainbow Municipal Water District during 2015; the agenda for the Dec. 19 meeting of LAFCO's Special Districts Advisory Committee has not been finalized but is expected to include the FPUD-Rainbow merger issue.

LAFCO is also expected to consider a handful of development-related annexations during 2015, including the annexation of the Campus Park West development to Rainbow (or to FPUD should the merger occur) and into the San Diego County Water Authority and the Metropolitan Water District of Southern California, and water supply availability is one of the criteria which is reviewed during annexation proposal processing.

"Our workload and just the jurisdictional characteristics of the county are changing," said LAFCO executive officer Mike Ott.

Updates both to the municipal service review which evaluates services and anticipated needs and to the sphere of influence which determines boundaries best served by a particular agency are prerequisites to any boundary change including an annexation or consolidation, and LAFCO also periodically conducts municipal service review and sphere of influence updates for all districts, so all water agencies regardless of consolidation or annexation proposals periodically undergo municipal service review and sphere of influence studies. "Water supply is one of the important factors that we look at," Ehrlich said.

The municipal service review includes existing service and plans for future service. "We're charged with looking at existing services and efficiencies," Ehrlich said.

While the municipal service review and sphere of influence studies may lead to support for annexations or reorganizations, the possibility of shared resources can also be studied although the districts or city departments themselves would need to initiate such action. "We're not here how to tell any district, city, how to run their operations," Ehrlich said.

The San Diego County Water Authority has 24 member agencies consisting of six city water departments, 17 water districts (including the Carlsbad Municipal Water District and the San Dieguito Water District which are separate entities from the cities of Carlsbad and Encinitas but have identical boundaries and a board consisting of the city council members), and Camp Pendleton. The Encina Wastewater Authority consists of six North County cities and agencies responsible for wastewater and treatment, and the San Diego Metro Wastewater System consists of 12 agencies along with the City of San Diego.

Other than the San Diego County Water Authority and the Metropolitan Water District, the only joint powers agency for water currently in San Diego County is the Sweetwater Authority consisting of the National City water department and the South Bay Irrigation District covering part of Chula Vista.

In February 2013, FPUD and Rainbow formed the North County Joint Powers Authority as a functional consolidation experiment, but after talks about jurisdictional consolidation reached an impasse regarding governance, the North County JPA was dissolved in March 2014.

A joint powers authority is not necessary for functional consolidation or sharing resources. In September 2013, Rainbow approved a Memorandum of Understanding with the Valley Center Municipal Water District to coordinate infrastructure for new development east of Interstate 15; in addition to common pipelines rather than separate pipelines which reduce operations and maintenance costs as well as construction expenses, the collaboration allows for the districts to aid each other with appropriate reimbursement.

Although Rainbow's board voted to dissolve the North County JPA, the district subsequently approved a resolution authorizing Rainbow to provide practical assistance to FPUD in an emergency or an opportunity situation regardless of whether a formal agreement exists.

"There are excellent examples of shared facilities and services among local districts in San Diego County," Arant said.

Arant's presentation included local agency perspectives on shared facilities and services, lessons learned regarding shared services, local history developing recycled water projects, and experience of water, wastewater, and recycled water project development.

Prior to the formation of the North County Joint Powers Authority, discussions of shared resources involving FPUD, Rainbow, Valley Center, and the Yuima Municipal Water District in Pauma Valley had taken place. Those discussions identified possible shared resource opportunities including communications and information technology storage; although additional discussions were deferred once the North County JPA was formed, the four agencies are still investigating the concept. "They are still interested in pursuing some of those functional things," Arant said.

Arant noted that both functional and jurisdictional consolidation must result in better service or economic savings to be successful.

"Just being the right thing to do is not enough," he said. "Functional or jurisdictional consolidations need the right political, economic, and organizational architecture."

The benefits of such consolidation could include reduced cost, increased service, or cost savings reinvested in capital expenditures. Some economies of scale can be achieved through increased use of underutilized or specialized equipment and of specialized staff. Arant warned that consolidation should not be at the expense of service. "Larger agencies can be less responsive and less able to adapt to localized need," he said.

Arant also noted that a consolidation which eliminates the salary of a high-level administrator may require the need for more mid-level staff members.

Arant also cited potential offsets to savings. "Integrating water or wastewater systems or distance issues can overtake any actual savings," he said.

Arant advised LAFCO that other types of special districts might not achieve the benefits water agencies would from functional or jurisdictional consolidation. "Capital-intensive services may provide greater opportunity for savings than labor-intensive services," he said. "You're still going to need the same number of firefighters."

(Many fire agencies have not only mutual aid agreements but also automatic aid agreements where the nearest apparatus regardless of district or city department is the first responder; such automatic aid involves reimbursement but not the sharing of resources between different agencies.)

Arant also explained that districts are not equal including the code governing their formation. The governance issue which caused Rainbow to oppose the merger with FPUD is that Rainbow elects its directors by division while FPUD board members are elected at large.

"There are typically a winner and a loser. The benefits are often not equal," Arant said of consolidation. "The right thing to do may not translate well to customers and voters in the next election."

Arant also noted that up-front costs may be prohibitive in some cases.

The Valley Center Municipal Water District, which serves Hidden Meadows and northern unincorporated Escondido as well as Valley Center, has 42 reservoirs with approximately 250 million gallons of storage capacity, 27 pump stations, 297 miles of pipe, 57 miles of wastewater lines, and two wastewater treatment stations.

Arant noted that open ocean outfall wastewater disposal and inland wastewater disposal to spray fields, agricultural customers, and golf courses have different requirements; open ocean outfall is an option even if wastewater is recycled while irrigation-based disposal requires enough storage capacity for nearly three months of flow. "You have to develop seasonal or wet-weather storage capability," he said.

Inland disposal agencies which cannot discharge excess wastewater into the ocean will often take the security of a long-term commitment at a lower rate. LAFCO's June meeting included a municipal service review and sphere of influence update for the Ramona Municipal Water District, whose San Vicente Water Treatment Plant provides 284.5 acre-feet of recycled water per year to the Spangler Peak Ranch grove and 293.1 acre-feet annually to the San Diego Country Estates golf course at $35 per acre-foot.

"Consolidation doesn't necessarily always work," said LAFCO board chair Andy Vanderlaan, who lives in the Rainbow Municipal Water District but who was the Fallbrook Fire Protection District fire chief in 1986 when that agency merged with the County Service Area serving Rainbow and became the North County Fire Protection District.

Thorner's presentation focusing on the North County Water Reuse Coalition included reference to Camp Pendleton participating in the facilities plan due to joint projects with the City of Oceanside, which is a member of the coalition. The coalition consists of several cities and water districts. "What we want to do is maximize water reuse in North County without being encumbered by jurisdictional boundaries," Thorner said. "North County has definitely come together to try to make a difference in the water supply solution."

Carlisle's presentation noted possible use expansion of Padre Dam's recycled water facility, which opened in the early 1960s in response to discharge issues and which incorporated its recycled water storage into the Santee Lakes recreational area.

Weinberg focused on the status of the regional drought and an overview of the region's water supply. During the question period Weinberg was asked about the Camp Pendleton seawater desalination facility and responded that the Camp Pendleton plant would be the CWA's next seawater desalination project but that potable reuse projects which would allow recycled water to be used for potable supply might delay the need for the Camp Pendleton desalination plant.

*Editor's Note: In the print version of this story, published Thurs., Dec. 11, inadvertently the LAFCO meeting date indicated in the story title was listed incorrectly as Dec. 15. The correct meeting date is Dec. 19 where there is a possibility of discussion on the merger.