Rainbow approves out-of-agency service agreement for Meadowood

Although Pardee Homes' planned Meadowood development is within the boundaries of the Valley Center Municipal Water District, the Rainbow Municipal Water District will provide water and sewer service to Meadowood.

A 3-0 Rainbow board vote April 28, with Helene Brazier and Michael Mack unable to participate in the meeting, approved an agreement for out-of-agency service between Rainbow and the Valley Center district.

The action also approved an addendum to the Environmental Impact Report which addresses the provision of infrastructure, and the Rainbow board also directed district staff to prepare an application to San Diego County's Local Agency Formation Commission to annex the Meadowood area and detach that area from the Valley Center district.

"This is really just efficiency of services," said Rainbow general manager Tom Kennedy. "We've got stuff across the street, and it just makes more sense."

In January 2012, the board of supervisors approved the 384-acre Meadowood development. At the time the land was within the San Luis Rey Municipal Water District, which is not part of the San Diego County Water Authority, but the board of supervisors' conditions included annexing the property into the SDCWA.

The original approved map included 397 single-family homes, 447 multifamily dwelling units, 13 acres for an elementary school which will be built by the Bonsall Unified School District, four acres of park land, 128 acres of biological open space, 47 acres of agricultural open space, 5.9 miles of trails, and a wastewater treatment plant.

In order to avoid impacts to sensitive environmental resources, a public park was relocated and the residential component is now expected to consist of 473 single-family and 352 multifamily homes while the public park size has increased to 9.1 acres with the trail length reduced to 5.6 miles.

Pardee Homes had entered into a pre-annexation agreement with the Rainbow Municipal Water District in 2004, but in April 2005 the Rainbow board instructed the district's legal counsel to work with Pardee on terminating the agreement and in December 2008 Rainbow's board voted to terminate that agreement.

In January 2011, the Valley Center Municipal Water District board voted to support the annexation of Meadowood into that district, and LAFCO approved the annexation in 2014. Meadowood is not adjacent to the rest of the Valley Center boundaries, and the plan when the property was annexed was for Pardee to construct water and sewer lines to Meadowood at the developer's expense.

"Over time it became clear that it was going to be very difficult for Valley Center to serve that," Kennedy said. "They don't have any facilities in the area."

The nearest Valley Center facility is across Couser Canyon and multiple miles away from Meadowood. "The project is immediately adjacent to Rainbow's facilities," Kennedy said. "It's pretty easy for us to serve it."

Kennedy and Valley Center general manager Gary Arant are their districts' representatives on the San Diego County Water Authority board. Pardee Homes division president Jimmy Ayala is one of the City of San Diego's representatives on the SDCWA board. The three had discussed having Rainbow rather than Valley Center serve Meadowood.

"I'm very happy that we have come full circle," Ayala said. "I'm proud of how this agreement mutually benefits both parties."

Pardee Homes has obtained all required permits for Meadowood and has begun grading. The Valley Center district approved the out-of-agency service agreement March 2. The service agreement allows facilities to be constructed while the actual annexation and detachment application is being processed by LAFCO.

"This will allow us to get started with design and construction on the connections to our system," Kennedy said.

A provision in the agreement that Pardee will pay for certain water and sewer infrastructure to serve the project ensures that the Valley Center district is not responsible for any of those costs. Pardee will pay all applicable water capacity fees which are charged to developers to cover the new development's share of existing infrastructure while the agreement sets sewer capacity fees at $10.5 million.

"This will be a really good way to improve our wastewater system," Kennedy said.

Once the homes are built Rainbow will also have the additional revenue from the Meadowood customers. "I think it will make better opportunities from the water side," Kennedy said.

Although Rainbow will be the official applicant to annex the Meadowood area, Pardee will be responsible for the LAFCO processing fees (with a $50,000 cap) and will also pay the costs to prepare the application materials.

Once the detachment is complete, another government action will form a Community Facilities District which will allow the capacity fee costs to be repaid through an assessment on the properties. "We expect that to go through smoothly," Kennedy said.

Pardee's engineer of record has been working with Rainbow staff to review the required upgrades to Rainbow's wastewater conveyance system and is in the final stages of completing a full analysis which may include some design alternatives for consideration