RMWD Board adopts supplemental Resolution of Objection to FPUD takeover attempt

FALLBROOK – The Rainbow Municipal Water District (RMWD) Board of Directors voted on Aug. 25 to adopt a supplemental Resolution of Objection to the Fallbrook Public Utility District (FPUD) application to dissolve RMWD and annex its territory.

A Resolution of Objection is a formal legal step that is intended to carry great weight with the commissioners of the Local Agency Formation Commission (LAFCO) that will consider the FPUD application next month.

“We conducted an objective review of the FPUD application using one of the most respected public finance firms in the nation,” said RMWD Board President Dennis Sanford, “and their analysis showed that FPUD’s proposal was speculative rather than substantive.”

The study, conducted by Raftelis Financial Consultants (RFC) made a number of observations. The following are a few of the many deficiencies identified by RFC in FPUD’s application:

• “There is insufficient information to support the conclusion that a consolidation would result in the stated savings.”
• FPUD’s claim that “potential savings could be achieved without a reduction in the level of service…appeared to be a statement of opinion rather than a conclusion supported by facts.”
• “It appears that RMWD operates much more efficiently than FPUD…The result of this is that cost savings to the RMWD side of the divisional accounting proposed in the consolidation will be minimized.”
• “It appears that FPUD is financially weaker and consolidation from that aspect would strengthen FPUD customers to the detriment of RMWD customers.”

The Resolution of Objection points out that the findings

contained in the LAFCO staff report are inaccurate based on the lack of substantive evidence in the FPUD proposal. “The initial LAFCO staff report failed to evaluate FPUD’s financial assumptions,” said director Helene Brazier, adding “this Resolution of Objection should help LAFCO staff realize that the cost savings promised by FPUD are illusory at best.”

The LAFCO commission is scheduled to consider the FPUD application to dissolve RMWD on Sept. 14.