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The San Diego County Water Authority (SDCWA) voted in closed session last month to drop it’s lawsuit challenging the plan by the Fallbrook Public Utilities District (FPUD) and Rainbow Municipal Water District (RMWD) to leave the broader agency and join the Eastern Municipal Water District of Riverside County.
The settlement comes with an expensive caveat, an immediate $25 million payment from the two districts plus related costs and fees.
SDCWA claims the settlement avoids expensive litigation, provides institutional certainty, and minimizes rate impacts on San Diego County’s 3.3 million residents.
“While the majority of SDCWA’s remaining 22-district membership remains opposed to detachment, they agree that this settlement makes the best of a bad situation,” said Mel Katz, chairman of the San Diego County Water Authority Board. “While we continue to believe the detachment award should have been higher, RMWD and FPUD are required to pay all costs, above the amount ordered by the Local Agency Formation Commission (LAFCO) in addition to its entire exit fee up front, meaning there will be no immediate rate impacts for ratepayers.”
As part of the settlement agreement, both RMWD and FPUD have agreed to pay all costs related to the decommissioning of SDCWA facilities that will not be used post-detachment. Further, the two agencies have agreed to indemnify and hold harmless the SDCWA against any future claims related to detachment and completion of all administrative, technical, and infrastructure-related tasks before the SDCWA’s facilities can be transferred. This is above and beyond what LAFCO prescribed as part of its conditions for detachment.
In response to LAFCO’s July decision to approve RMWD and FPUD’s request for detachment, the state passed The Water Ratepayer Protection Act.
Going forward, any member agencies that want to separate from a county water authority will need the approval of voters within the entire regional district, rather than only those who live within the boundaries of seceding districts.
