FPUD approves additional LAFCO deposit

San Diego County’s Local Agency Formation Commission requires a deposit to process applications to LAFCO for jurisdictional changes, and the Fallbrook Public Utility District will be providing an additional deposit to process the application for FPUD to detach from the San Diego County Water Authority and annex into the Eastern Municipal Water District.

A 5-0 FPUD board vote, Monday, Aug. 24, authorized an additional $62,220 deposit to LAFCO. The deposit is expected to cover an additional 510 hours of LAFCO staff time at LAFCO’s rate of $122 per hour.

The San Diego County Water Authority’s supply rate is a melded rate which melds the cost of water delivered from the Metropolitan Water District of Southern California, 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 SDCWA 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. It 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 and 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 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. The CWA has also expressed concern about member agency reliability, impacts to the Bay-Delta and the CWA’s weighted vote at MWD meetings.

LAFCO has created a technical advisory committee to identify issues and attempt to resolve differences. The Aug. 3 meeting of the committee included discussion about consultants to analyze water supply reliability, the proposed reorganization’s impact on the CWA and the 22 other member agencies and whether an “exit fee” would be warranted.

In February 2019, LAFCO’s board approved an update of the processing fees for applications submitted to LAFCO. Before the change the fees for annexations, detachments and latent powers expansions were based on the affected territory’s acreage. The new fees are based on staff time costs, and the revisions to the structure also include estimates of staff time along with hourly salary, benefit and overhead costs for staff members involved. The staff costs are new to LAFCO for proposals.

The jurisdictional boundary change fees are non-refundable but may be augmented by one or more deposits if additional staff time is needed while the deposits to cover staff time for formations, consolidations and incorporations are refundable if the actual staff time is less than the estimate. The number of hours for each type of proposal is based on LAFCO’s experience with such proposals, although LAFCO has not previously processed a proposal for an agency to detach from the CWA and annex to another agency.

If a landowner or public agency consults with LAFCO staff prior to submitting an application, the LAFCO staff time involved prior to the submittal of the application is not added to the staff time involved in processing the application. If a member of the public requests that LAFCO staff perform general research there is no cost if the research involves no more than four hours of staff time while any research beyond four hours would result in a charge based on the hourly staff rates for LAFCO staff members utilized.

FPUD initially provided a $24,563 deposit which covered 191 staff hours. On Aug. 12, LAFCO executive officer Keene Simonds sent an electronic mail message to FPUD general manager Jack Bebee, noting that LAFCO had expended 170 staff hours as of that date and that Simonds expected the processing to be approximately 25% complete.

“We’re making progress,” Bebee said.

He said that the cost of the deposit to LAFCO is small compared to the potential reduced cost of purchasing water.

“The savings if we get through this process are substantial,” Bebee said.

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