March 25 was the date of the first Rainbow Municipal Water District board meeting since the Fallbrook Public Utility District (FPUD) submitted an application to San Diego County’s Local Agency Formation Commission to merge FPUD and Rainbow, and the Rainbow board meeting included a presentation by LAFCO executive officer Mike Ott as well as accusations against Ott and FPUD general manager Brian Brady.
Ott’s presentation also constituted official LAFCO notice to Rainbow, giving the district 25 days to provide an official response to the FPUD application. That 25-day period will end April 19, so Rainbow will hold a special board meeting sometime in early April to address the FPUD application and the Rainbow response.
The North County Joint Powers Authority (JPA) was created in February 2013 as a transitional structure to test the possibility of consolidating the Fallbrook and Rainbow districts. The joint powers agreement also included an employee leasing agreement which allowed FPUD and Rainbow to share employees, and the functional consolidation saved more than $1 million during the agreement’s first 11 months of existence.
In November, the FPUD and Rainbow boards voted to begin the process of applying to LAFCO for an actual jurisdictional consolidation, but district boards could not agree on the governance structure for the successor district. Each district currently has a five-member board; FPUD elects its directors by seat with the entire district voting for each seat while Rainbow elects its directors by division with only voters in that division participating in that election.
The FPUD board initially proposed that the board members of the consolidated agency all be elected at large. At the Feb. 5 North County JPA meeting, FPUD’s representatives on the JPA board (which consists of three FPUD board members, three Rainbow board members, and an at-large member chosen by the rest of the board) put forth a compromise proposal in which four directors would be elected by division and three directors would be elected at large. Such a format would provide board representation for residents of each of the four divisions while also ensuring that a majority of the board would be accountable to all of the district’s residents. Rainbow’s board members rejected that proposal.
The joint powers agreement allowed for a termination provision after one year, and on March 5 Rainbow’s board voted 4-1 with Dennis Sanford in opposition to terminate the joint powers agreement with FPUD. Rainbow board president George McManigle delivered the 30-day notice of termination to FPUD on March 6, so the JPA will be dissolved effective April 5 unless FPUD obtains another partner.
FPUD scheduled a special board meeting for March 10, and the board voted 4-0 (with Archie McPhee absent) to submit an application for the merger to LAFCO.
Prior to the formation of the North County JPA, Ott appeared at a September 2012 community forum at the Bonsall Community Center. At that time he noted that consolidation would be a process which would involve due diligence.
“Now he’s saying that an application from either agency would move it forward,” McManigle said.
The LAFCO study would include municipal service review and sphere of influence updates for both districts. A municipal service review evaluates services and anticipated needs while a sphere of influence study determines boundaries best served by a particular agency. In the event of a consolidation, a dissolved district would be given a zero sphere of influence. The eight-member LAFCO board would hold a public hearing on the proposed consolidation, which would allow Rainbow board members and other members of the public to provide additional input.
During the March 25 meeting, Ott was asked if his staff had knowledge of the FPUD application before it was received.
“He said yes, and to me that becomes an issue of collusion between LAFCO and Fallbrook Public Utility District because they had information that should not be there,” McManigle said.
Brady is the executive officer of the North County JPA as well as FPUD’s general manager, and he was also named as Rainbow’s general manager before resigning after the impasse on the governance of the proposed consolidated agency created a conflict of interest for Brady to remain as Rainbow’s general manager.
“He is on the LAFCO advisory board,” McManigle said, “which to me is a conflict of interest.”
Brady is one of 16 members on LAFCO’s Special Districts Advisory Committee.
Rainbow’s board also noted that FPUD utilized a special meeting to approve the application for consolidation and did not have prior public comment or notice for the item.
“Our legal counsel will certainly be looking at violations of the Brown Act,” McManigle said.