LAFCO approves detachment review committee

San Diego's County's Local Agency Formation Commission approved a committee to review issues regarding the proposed detachment of the Fallbrook Public Utility District and the Rainbow Municipal Water District from the San Diego County Water Authority.

An 8-0 LAFCO board vote June 1 approved the composition of the committee, although LAFCO executive officer Keene Simonds will appoint the specific members and the list of tasks for the committee.

"We have agreement with the County Water Authority, Rainbow and Fallbrook," said county supervisor Dianne Jacob, who is the chair of the LAFCO board.

"We have consensus on the tasks. I think we have a working agreement on the composition," Simonds said.

The 10-member committee will consist of one representative from FPUD, one representative from Rainbow, one representative from the SDCWA, two board or staff members from other CWA member agencies, one representative from LAFCO's Special Districts Advisory Committee, one representative from LAFCO's Cities Advisory Committee, one at-large member from the County of San Diego with expertise, one at-large member from the San Diego Association of Governments with expertise and one member from the Eastern Municipal Water District.

The committee will conduct a scale and scope review including key assumptions, documenting the differences in proposals, identifying key stakeholders, topics and firms for LAFCO consultants and legal topics. The committee will review stakeholder comments, provide input on the consultant analysis, consider statutory standard jurisdictional change factors, identify and consider local factors, and discuss appropriate quantitative items.

Potential terms including compensation, infrastructure improvements, special taxes or other assessments and an expanded vote will also be identified and considered and the committee will also identify and consider alternative options. The committee will continue to mediate remaining differences.

"This would be to provide input to LAFCO staff," Simonds said. "There would be no formal vote that would go to the commission."

Vista Irrigation District board member Jo MacKenzie, who is one of two special districts representatives on the LAFCO board, wanted the committee to have a timeline."I'd hate to see this committee drag on and not come up with the information or consensus," she said.

The committee's tasks include setting timelines and revising the timelines if necessary. "These are really unprecedented applications involving complicated regional and statewide issues," said CWA general manager Sandra Kerl.

FPUD and Rainbow have submitted applications to detach from the San Diego County Water Authority and annex to the Eastern Municipal Water District. FPUD and Rainbow can reduce their cost of purchasing water – and thus their rates – by detaching from the CWA and becoming part of another Metropolitan Water District of Southern California member agency. The two districts anticipate a combined savings of between $8 million and $10 million annually by purchasing water from Eastern rather than from the CWA.

Due to fixed costs, the CWA and the other 22 CWA 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).

During the Oct. 7 San Diego LAFCO hearing on a memorandum of understanding with Riverside County LAFCO that the entire process be conducted by San Diego LAFCO, the CWA requested that any reorganization have rate neutrality and that day's 8-0 LAFCO board vote which approved the MOU also gave 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 LAFCO board and staff members prefer that FPUD and Rainbow work out financial terms to compensate the CWA and the 22 remaining agencies, although LAFCO would consider financial terms if no agreement is reached.

The CWA has also expressed concern about member agency reliability. "The Water Authority is the mechanism by which each of our member agencies meet their obligation," Kerl said.

MWD supply is obtained either through the State Water Project, which transports water from Northern California including through the Bay-Delta, or from the Colorado River Aqueduct which runs from Parker to Lake Mathews. The CWA's concerns also include impacts to the Bay-Delta.

Both the CWA and MWD have a weighted vote for board action items which is based on cumulative historical financial contributions and the CWA is also concerned that the loss of the two member agencies would adversely impact the CWA's weighted vote at MWD meetings.

The May 4 LAFCO meeting included an 8-0 vote to confirm any LAFCO board support for the

detachment with a public election, although which agencies will be included in that public vote are still to be determined. The motion also included the creation of a technical advisory committee. Simonds drafted proposed tasks for the committee and four proposed membership composition options.

"We're fine with whatever format the commission feels necessary," said FPUD General Manager Jack Bebee.

The committee meetings will be open to the public (although some may be by teleconference until coronavirus emergency restrictions are lifted), and committee minutes will be provided to all LAFCO board members.

"I think it's great if as a group we can go through this information," Bebee said.

"We're ready and willing to meet wherever and whenever the commission decides we should," said Rainbow General Manager Tom Kennedy.