CWA asks LAFCO for countywide vote on FPUD/Rainbow reorganization

The San Diego County Water Authority has asked for a countywide vote in case San Diego County’s Local Agency Formation Commission approves the prior steps for the Fallbrook Public Utility District and the Rainbow Municipal Water District to detach from the SDCWA and become part of the Eastern Municipal Water District.

The CWA board voted to request a countywide public vote Nov. 21. The term “countywide” applies only to residents within the CWA boundaries, which does not include the entirety of San Diego County.

“It is something that now will be brought to the commission if and when the actual proposal is filed,” LAFCO Executive Officer Keene Simonds said.

FPUD has been part of the San Diego County Water Authority since the CWA was formed in 1944. The Rainbow Municipal Water District was formed in 1953 and became a CWA member. The Metropolitan Water District of Southern California and the CWA began delivering water to San Diego County in 1947.

MWD’s San Diego Aqueduct conveys water to a delivery point 6 miles south of the Riverside County line. That allowed MWD and the CWA to provide equal contributions to connect from MWD’s Colorado River Aqueduct to the San Vicente Reservoir in Lakeside.

The CWA northern boundary is the county line. All but one of FPUD’s connections are from MWD pipelines rather than from CWA pipelines, and four of Rainbow’s eight connections are to the MWD portion of the pipeline.

The CWA’s supply rate is a melded rate which melds the cost of water delivered from MWD, water purchased from the Imperial Irrigation District under the Quantification Settlement Agreement, and water produced by the Claude “Bud” Lewis Carlsbad Desalination Plant in Carlsbad.

The CWA also has transportation, storage and customer service charges along with fees and charges for fixed expenditures which are incurred even when water use is reduced. This structure creates the possibility that FPUD and Rainbow can reduce their cost of purchasing water – and thus their rates – by detaching from the CWA and becoming part of another MWD member agency.

The Eastern Municipal Water District is a member of MWD and purchases imported water directly from MWD. The Western Municipal Water District is also a member of MWD and provides retail water sales of MWD supply to the Elsinore Valley Municipal Water District as well as to the Rancho California Water District.

If FPUD and Rainbow detach from the CWA and join Eastern, their status would be similar to that of the two water districts which obtain MWD water from Western.

The Eastern Municipal Water District currently covers 555 square miles and includes Hemet, Menifee, Murrieta, Perris, Romoland, San Jacinto, Temecula and Winchester. The district has more than 140,000 water customers.

Each county in California has a LAFCO which handles jurisdictional boundary changes including incorporations, annexations, consolidations and detachments within that county.

Because the Eastern Municipal Water District is all currently in Riverside County, a reorganization would have required approval from both San Diego County’s LAFCO and Riverside County’s LAFCO, although both LAFCO boards approved a Memorandum of Understanding delegating the entire process to San Diego LAFCO. FPUD and Rainbow would be responsible for all LAFCO fees.

“This is a unique process that's being contemplated in many respects under LAFCO statute,” Simonds said.

The CWA and the other 22 agencies could incur adverse financial impacts if FPUD and Rainbow left – a preliminary CWA analysis estimated an annual impact of $13 million in 2018 dollars – so the CWA requested that the process be conducted entirely within San Diego LAFCO.

During the Oct. 7 San Diego LAFCO hearing, the CWA requested that any reorganization have rate neutrality and that day’s 8-0 LAFCO board included direction to LAFCO staff to review the economic impacts not only for FPUD and Rainbow but also to the CWA and the other member agencies.

The San Diego LAFCO board and staff members prefer that FPUD and Rainbow work out financial terms to compensate the CWA and the 22 remaining agencies which would be affected by the reorganization, although LAFCO would consider financial terms if no agreement was reached.

The San Diego County LAFCO board consists of two county supervisors – currently Dianne Jacob and Jim Desmond; one city council representative from San Diego – currently Mark Kersey; two city council members from the county’s other 17 incorporated cites – currently Mary Salas of Chula Vista and Bill Wells of El Cajon; two members from special districts – currently Jo MacKenzie of the Vista Irrigation District, who is also this year’s LAFCO chair, and Barry Willis of the Alpine Fire Protection District, and one public member – currently Bonsall resident Andy Vanderlaan, who lives in the Rainbow Municipal Water District.

Although the LAFCO board approved the delegation of the process Oct. 7 and LAFCO staff members have been working with FPUD general manager Jack Bebee and Rainbow general manager Tom Kennedy, an application must be submitted before LAFCO considers any aspect of the reorganization. Any reorganization proposal involving FPUD and Rainbow will require approval by the two water district’s boards.

Next, LAFCO staff or a consultant will analyze the proposed reorganization both for service impacts and for financial impacts. A municipal service review and a sphere of influence update will be necessary before any jurisdictional changes are made. A municipal service review evaluates services and anticipated needs, and a sphere of influence study determines the boundaries best served by a particular agency.

Under the Memorandum of Understanding San Diego County’s LAFCO will handle the municipal service review and sphere of influence update as well as the detachment and annexation.

The analysis will conclude with the preparation of a report and a staff recommendation. The LAFCO board will hold a public hearing and may or may not adopt the staff recommendation.

“It’s going to be in and of itself a rather lengthy process,” Simonds said.

Under state legislation regulating LAFCO agencies, a LAFCO board has the option of requiring a public vote on a reorganization and a protest vote may also take place if petitions signed by at least 25% of an affected agency’s ratepayers or registered voters are received by LAFCO. If the petition includes a majority of the electorate, the reorganization is denied without a vote.

The County Water Authority Act requires a majority vote of the electorate of an agency which detaches from the CWA. The CWA expressed concern that obtaining 25% of signatures for an area as large as the CWA would be cumbersome, especially since most voters are not familiar with the protest provision.

A protest vote would be for the entire affected area, so if the LAFCO board approves the FPUD and Rainbow reorganization a stipulation for a countywide, that is, within CWA boundaries vote would also settle the issue of the affected agencies whose electorates would be able to submit signatures.

The voter pool could be FPUD and Rainbow only, and it could also include the CWA and Eastern. Because the other 22 CWA individual agencies are also affected it is unclear whether a petition with 25% of ratepayers or residents in one of those agencies could trigger a protest vote.

The Yuima Municipal Water District in Pauma Valley has only 350 residents, and Yuima also provides standby water service to approximately 1,000 Pauma Valley residents outside the Yuima boundaries so a LAFCO board stipulation for a vote would also settle the issue of the electorate served by a member agency but not within that agency’s boundaries.