LAFCO consultant continues review of FPUD and RMWD's proposal to change water suppliers

FALLBROOK – As the Fallbrook and Rainbow water districts seek to change water suppliers and save ratepayers money, the issue continues to be studied by an outside consultant hired by the San Diego Local Agency Formation Commission, or LAFCO. The consultant, Dr. Michael Hanemann, gave a partial update on his progress at a recent meeting of an advisory committee established by LAFCO. Ratepayers would save millions of dollars each year if the proposals are approved.

The districts have submitted applications to LAFCO to change water suppliers. Instead of continuing to purchase their water from the San Diego County Water Authority, the districts are seeking to become wholesale water customers of the Eastern Municipal Water District in Southern Riverside County. If LAFCO approves the applications, the districts would be able to purchase their water for millions of dollars less each year compared to what they are paying today to the Authority.

The move would collectively save the agencies and their ratepayers about $7-10 million per year.

Hanemann, who presented his latest findings to the LAFCO advisory meeting on July 12, is studying the issue of water reliability for Fallbrook and Rainbow should they make the switch to Eastern. He is also studying the rate impact to the 22 other water agencies that purchase water from the Authority and assessing if there should be any termination fees for the agencies to depart from the Authority. LAFCO has indicated they anticipate his report on these items to be completed by the end of the year.

“The information he presented continues to show that Eastern can provide equally reliable water at a lower cost,” said Jack Bebee, general manager of Fallbrook Public Utility District.

“Given the recent overflow crowd of around 150 people at our town hall event to discuss this process, it is clear that taking steps to help address rising water costs is a priority for our customers.”

According to a study conducted last year by London Moeder Advisors, FPUD and

Rainbow have overpaid nearly $50 million to the Water Authority over the past 10 years when compared to the benefits they have received. The study also concluded that if FPUD and Rainbow were to change water wholesalers, the financial impact on the remaining county ratepayers would be minimal – about 50 cents per month per water meter.

LAFCO is currently analyzing the applications that FPUD and Rainbow submitted last year, along with the results of Hanemann’s analysis. LAFCO is expected to vote on the matter early next year. If approved, FPUD and Rainbow voters would have the final say in an election held in each of the two districts’ service areas.

Submitted by the Fallbrook Public Utility District.