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Rainbow MWD amends agreement for Citro

The agreement between the Rainbow Municipal Water District and Tri Pointe Homes for the Citro development has been amended.

Rainbow's board voted 5-0, Sept. 28, to approve an amendment to the annexation agreement, to authorize Rainbow general manager Tom Kennedy to execute that amendment on behalf of the district, to approve the amendment to the participation agreement for the Rice Canyon Pipeline facilities, and to find that the changes do not create a new situation which would require updating the 2020 addendum to the Environmental Impact Report. The change in the annexation agreement allows an additional 150 residential units to be built before the completion of the Phase 1 sewer improvements while the participation agreement increases the total cost by $1,400,000.

Tri Pointe Homes is the parent company of Pardee Homes and Citro was the Meadowood project in January 2012 when the San Diego County Board of Supervisors approved the 384-acre Meadowood development. The original approved map included 397 single-family homes, 447 multi-family homes, 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 multi-family homes while the public park size has increased to 9.1 acres with the trail length reduced to 5.6 acres.

When the board of supervisors approved Meadowood the land was within the San Luis Rey Municipal Water District, which is not part of the San Diego County Water Authority. The board of supervisors conditions included annexing the property into the SDCWA. 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 San Diego County's Local Agency Formation Commission (LAFCO) approved the annexation of Meadowood into the Valley Center district in 2014.

Meadowood is not adjacent to the rest of the Valley Center boundaries. The plan when the property was annexed was for Pardee to construct water and sewer lines to Meadowood at the developer's expense. The nearest Valley Center facility is across Couser Canyon multiple miles away from Meadowood, and over time both the Valley Center district and Pardee realized that the lack of facilities in the area would make Meadowood difficult for the Valley Center district to serve. Meadowood is adjacent to Rainbow facilities.

Last year Pardee and the Valley Center and Rainbow districts approved an out-of-area service agreement for Rainbow to provide water and sewer service to Meadowood. The April 2020 Rainbow action also directed district staff to prepare an application to LAFCO to annex the Meadowood area into Rainbow and detach that area from the Valley Center district, and the May 2020 meeting authorized Kennedy to submit the application to LAFCO. A 7-0 LAFCO board vote May 3, with no City of San Diego representative present, approved the detachment of the land from the Valley Center Municipal Water District and the annexation of the property into the Rainbow district. The reorganization was recorded July 23.

The annexation agreement allowed Pardee to obtain certificates of occupancy for up to 422 residential units before the completion of the Phase 1 sewer improvements. Those improvements include construction of the Thoroughbred Lift Station on Thoroughbred Lane, a gravity main from Olive Hill Road to the Thoroughbred Lift Station, a force main along Camino Del Rey and Old River Road, and upsizing the existing sewer line along Highway 76. Rainbow has solicited proposals for the improvements, a bid opening is slated for Oct. 20, and the construction is expected to be complete by December 2022.

Tri Point Homes requested that up to 572 homes be allowed before the completion of the Phase 1 sewer improvements, which are necessary to accommodate the additional wastewater flows Citro will cause. The wastewater from Citro use will be collected upstream of the Pankey Lift Station, and during peak flows the storage at that lift station will be operated as an equalization basin to reduce the peak flows in the wastewater collection system downstream.

"We're comfortable with having a few more homes," Kennedy said.

Kennedy noted that the homes will be completed before the actual buyers move in and begin using water. "There's a buffer period," he said.

A community facilities district includes a special tax (sometimes known as Mello-Roos taxes due to the state legislators who wrote the option for services on new development to be funded by an annual assessment) to fund the services and/or infrastructure. A CFD may also pay for capacity fees which are charged to developers to cover the new development's share of existing infrastructure. An assessment must be approved by a majority of property owners, although a developer who owns an undeveloped parcel may vote in favor of the CFD and once the property is subdivided those property owners are responsible for the assessments. Rainbow approved a CFD for Meadowood infrastructure improvements last year.

"The more homes they have the sooner we get our CFD money," Kennedy said.

The current plans for 825 dwelling units mean that the Phase 1 sewer improvements will be completed before the remaining 253 homes being built. "They're not going to be able to build all of them before it's done," Kennedy said.

The annexation agreement also included provisions for the Rice Canyon Tank transmission main. That will be constructed by Tri Pointe Homes and given to the Rainbow district after it is completed and accepted as satisfactory, although Rainbow will reimburse Tri Pointe Homes for the cost of the water line. The participation agreement covers the design, construction, and funding of the Rice Canyon Pipeline and related facilities. The 18-inch main will deliver water from the Rice Canyon Tank Zone and connect to the water main on Horse Ranch Creek Road, so it will also serve the Horse Creek Ridge development and existing customers. Because a Metropolitan Water District of Southern California connection is used for the Rice Canyon Tank Zone and that line will still have capacity after the development projects are completed additional customers can receive service using MWD water which costs less than CWA supply.

When the participation agreement was approved the estimated total cost of the referenced improvements was $3,700,000, which was based on the engineer's estimate. "We now have hard numbers," Kennedy said.

The cost was thus increased to $5,100,000, although Rainbow and Tri Pointe representatives were able to negotiate a reduction in the administrative fee from 5% of all hard costs, soft costs, and contingency to 3% of the costs. The original contingency was 15% of hard costs and 25% of soft costs, although a review of the bid package lowered the contingency to 5% of hard costs and 10% of soft costs. Rainbow also negotiated a payment agreement which eliminates interest payments which were referenced in the previous version of the agreement.

"The change to that one has some financial benefit to the district," Kennedy said. "All these numbers have come down, which is a huge benefit to us."

Author Bio

Joe Naiman, Writer

Joe Naiman has been writing for the Village News since 2001

 

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