LAFCO detachment committee discusses CEQA, conditions, consultants

The items discussed at the Aug. 3 meeting of the advisory committee on the Fallbrook/Rainbow detachment created by San Diego County’s Local Agency Formation Commission included whether the reorganization was subject to California Environmental Quality Act review, whether LAFCO can place conditions on the detachment, and the use of consultants to address issues on which parties differ.

The 10-member advisory committee will not make recommendations but will seek to identify and potentially resolve issues regarding the proposed reorganization in which the Fallbrook Public Utility District and the Rainbow Municipal Water District would detach from the San Diego County Water Authority and annex to the Eastern Municipal Water District. The Aug. 3 advisory committee meeting included presentations by LAFCO executive officer Keene Simonds, LAFCO legal counsel Holly Whatley and LAFCO chief policy analyst Robert Barry.

Any proposed reorganization must include a property tax exchange which transfers property tax revenue from an agency losing territory to an agency acquiring territory.

“At this time, we are in the property tax negotiation period,” Barry said.

The property tax exchange must be approved by the San Diego County Board of Supervisors but would only take effect if the reorganization occurs. That step must occur before the application can be finalized.

“The proposal will continue to be considered incomplete,” Barry said.

The California Environmental Quality Act has a Class 20 exemption for governmental reorganizations which do not change the geographical area for which previously existing powers have been exercised.

“This is one of the things that staff is working through and analyzing,” Whatley said. “We have not made a final determination on those.”

A reorganization is not eligible for a Class 20 exemption if it would create an adverse effect on the environment. Due to the potential to increase demand from the Bay-Delta, the SDCWA does not believe the proposals should receive a Class 20 exemption.

LAFCO is the lead agency for the environmental statement, and if the Class 20 exemption is not approved LAFCO will determine whether a negative declaration, mitigated negative declaration or environmental impact report would be required.

Input by the parties will determine the level of environmental review.

“It’s going to help us complete and perform the CEQA analysis,” Whatley said.

Whatley also addressed conditions LAFCO can place on a reorganization. The conditions cannot include dictating land use.

“Other than that the authority is fairly broad,” she said.

Many of those conditions involve fiscal terms.

“It can require the payment of money,” Whatley said. “It can impose or exempt liability for bonded contracts.”

LAFCO can dictate governance conditions including representation.

“There can be terms attached for governance,” Whatley said.

The proposals are being processed concurrently but are considered separate applications, and Whatley said that the two proposals could have different conditions.

The conditions also include the effective date of the reorganization. LAFCO can also require voter confirmation of the commission's reorganization decision, and May 4 LAFCO’s board voted 8-0 to call for a public vote while also creating the technical advisory committee.

“It’s going to be subject to voter approval,” Whatley said.

The May 4 decision did not address whether the public vote would be for just FPUD and Rainbow or for the entire CWA service area as has been requested by the CWA; when the LAFCO board votes on the reorganizations themselves a decision will be made on the electorate.

The advisory committee will provide input to LAFCO staff but will not take any formal votes. LAFCO staff will make recommendations to the LAFCO board.

“There have not been any determinations made about what conditions to impose,” Whatley said.

“If issues come up our staff is to figure out how to come up with terms and conditions,” Simonds said.

The committee’s tasks include providing input on the consultant analysis.

“I believe we need to bring in some expertise of very particular topics,” Simonds said.

One of those topics will be water supply reliability.

“We want an expert to come in and tell us: is there a substantive difference for our purposes at LAFCO,” Simonds said.

The CWA’s primary concerns are member agency reliability, the economic impacts to the CWA and the remaining 22 member agencies, impacts to the Bay-Delta, and the impact on the CWA’s weighted vote at Metropolitan Water District of Southern California meetings.

The Eastern Municipal Water District has prepared a study which indicates that supply reliability for Eastern, FPUD and Rainbow would not be compromised by the reorganization.

“I would suggest that they start with the analysis, the technical memorandum, that we produced,” Nick Kanetis, deputy general manager of EMWD, said.

“What matters for Fallbrook is can we meet 100% of our demands,” Jack Bebee, FPUD general manager, said.

A consultant will also address the proposed reorganization’s impact on the CWA and the 22 other member agencies.

“It is clear that an outside expert would be of great use to us,” Simonds said.

Because LAFCO’s conditioning authority allows for an “exit fee,” a consultant will determine whether that would be warranted.

“We’re not exactly equipped at LAFCO to make that call,” Simonds said.

Simonds does not believe that a California Environmental Quality Act consultant will be necessary.

“They didn’t feel the need for any outside assistance on environmental review,” Bebee said.

FPUD and Rainbow are responsible for paying the processing costs of the application and that includes consultants.

“I don’t want them to waste a lot of time,” Bebee said.

“We do want to minimize it as much as we can,” Tom Kennedy, Rainbow general manager, said. “We want to keep this process moving along expeditiously.”

Kennedy advocated consultants with geographical as well as subject expertise.

“We need to find people who are versed in Southern California water,” he said.

CWA general manager Sandra Kerl requested consultants without attachments to local agencies.

“That’s part of the issue from our perspective,” she said.

“Some independence is important, obviously,” Bebee said.

Simonds took over as the San Diego LAFCO executive officer in September 2017 after Mike Ott retired. Simonds had previously been the executive officer of Marin County LAFCO for four years and before that he was the Napa County LAFCO executive officer for seven years. Simonds also spent four years as an analyst for Napa County LAFCO before becoming the executive officer. His expertise with Northern California consultants will allow for both independent parties and consultants whose qualifications are already known to Simonds.

“We need to reach consensus on the consultants,” Kerl said.

A list of consultants for each task will be provided to FPUD, Rainbow, the CWA and Eastern. Each of those agencies will have the right to veto a specific consultant.

“If we get the right person, I don’t think that needs to be too complicated,” Bebee said.

“We’ll come up with what we think is a good approach,” Simonds said.

The Aug. 3 meeting also included a decision that LAFCO will provide notice and other outreach to each of the 22 other CWA member agencies rather than designating the CWA as the responsible party to notify its members.

The LAFCO board normally meets on the first Monday of each month, but the first Monday of September is Labor Day so LAFCO’s board will not meet until Oct. 5. The next detachment advisory committee meeting was also set for Oct. 5.

Joe Naiman can be reached by email at [email protected].