FPUD asks LAFCO for consolidation; will seek another JPA partner

Despite the wishes of the Rainbow Municipal Water District board not to continue with plans to merge Rainbow and the Fallbrook Public Utility District, the FPUD board has submitted an application for the merger to San Diego County’s Local Agency Formation Commission.

A 4-0 FPUD board vote March 10, with Archie McPhee absent, approved the consolidation application which was delivered to LAFCO executive officer Mike Ott by FPUD general manager Brian Brady on March 11.

“I think there’s a general understanding that without the JPA structure or the (employee) leasing agreement, which also Rainbow has given notice to withdraw from that, it leaves little or no opportunity to continue the success that we accomplished in 2013,” Brady said.

The North County Joint Powers Authority was created in February 2013 as a transitional structure to test the possibility of consolidating the Fallbrook and Rainbow districts, and the first JPA meeting was held on March 6, 2013. The functional consolidation allowed for the experience of combining tasks among the two districts while also creating the possibility that the districts could experience cost savings due to such sharing without governance consolidation. 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 the boards of the two districts could not agree on the governance structure for the successor district. Each district currently has a five-member board, but 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 February 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.

During Rainbow’s February 25 regular meeting director Helene Brazier provided a position which noted that functional consolidation was not necessary to achieve the benefits of sharing resources with neighboring water districts as is the case with the recent activity between Rainbow and the Valley Center Municipal Water District to coordinate pipelines. Brazier’s comments defined the proposed merger as absorption into FPUD and permanent minority status instead of a full partnership.

Rainbow’s February 25 board meeting also discussed the process of hiring a new general manager. Rainbow general manager Dave Seymour retired shortly after the creation of the JPA, and Brady also became Rainbow’s general manager. Brady is also the executive officer for the JPA. FPUD’s March 10 agenda also addressed the JPA’s conflict of interest code which covers incompatible offices and thus led Brady to resign as Rainbow’s general manager. The FPUD board expressed a desire for Brady to continue to work cooperatively with Rainbow’s new general manager. The Rainbow board is expected to name an interim general manager, if not a long-term general manager, at its March 25 board meeting although existing Rainbow policy makes assistant general manager Gene Buckley Rainbow’s acting general manager in the absence of the general manager so no Rainbow board vote was required to make Buckley the acting general manager upon Brady’s resignation.

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 effectiveApril 5 unless FPUD obtains another partner.

The FPUD board responded by pursuing the merger unilaterally. “The Fallbrook board and the Rainbow board have been working through the JPA process and have decided on a number of things,” Brady said. “It’s my sense that the Fallbrook board believed that as many issues had been settled as what was going to be, so they thought it would be appropriate to submit to LAFCO.”

“I think that FPUD has acted irresponsibly,” McManigle said. “Rainbow followed the spirit of the letter of the joint powers authority.”

The Local Agency Formation Commission has an eight-member board consisting of two county supervisors (currently Bill Horn and Diane Jacob), one San Diego City Council member (currently Lorie Zapf), two city council members from the county’s other 17 incorporated cities (currently Sam Abed of Escondido and Jim Janney of Imperial Beach, two special district board members (currently John Ingalls of the Santa Fe Irrigation District and Bud Pocklington of the South Bay Irrigation District), and one public member (currently Rainbow Municipal Water District resident Andy Vanderlaan). LAFCO is responsible for handling jurisdictional boundary changes including annexations, consolidations, detachments, dissolutions, and city incorporations.

“I don’t see how it affects Rainbow at this time,” McManigle said. “We have our own concerns.”

Although the support of both agencies would not be required for LAFCO to process the consolidation request, input from the Rainbow board as well as input from Rainbow residents during the public hearing on the merger recommendation would be part of the process.

“The Rainbow board of directors has certain opportunities to weigh in on Fallbrook’s application,” Brady said.

“Rainbow will act responsibly,” McManigle said.

“We can also put an application into LAFCO with our own terms,” McManigle said. “They defined their terms. We can define our terms. I’m not saying we’re going to, but there’s nothing to stop us from doing it.”

If the LAFCO board approves the merger, sufficient petition signatures from residents of either district would trigger a public vote although the election would be for the two districts combined and the merger thus could be approved even if a majority vote from one of the districts opposes the merger.

The North County JPA held a special meeting March 13 to discuss Rainbow’s withdrawal from the JPA and the LAFCO application, although those items involved discussion rather than votes. “Neither one of them really resulted in anything other than discussion,” Brady said.

“The fact of the matter is Rainbow sent notice that they were dropping out,” McManigle said. “It was a waste of time to continue because nothing was going to change.”

“On the second item there was a great deal of discussion on the fact that Fallbrook had decided to go ahead with the application on its own,” Brady said. “It didn’t amount to any decisions or any vote or action.”

The oral and written reports section of the March 13 agenda included director comments and reports; although the board cannot take official action board members can request that staff investigate a possibility and return to the board in the future for a possible vote. JPA president Milt Davies, who is on the FPUD board, gave Brady direction to seek another agency for the JPA to replace Rainbow.

“The Fallbrook board members emphasized that they would prefer to keep the JPA structure in effect and therefore they would be interested in finding another partner,” Brady said.

In addition to FPUD and the Valley Center Municipal Water District, the Rainbow district borders the Vista Irrigation District and the San Marcos-based Vallecitos Water District. Rainbow also borders the City of Oceanside and the Eastern Municipal Water District in Riverside County. FPUD borders Rainbow, Camp Pendleton, and Riverside County’s Western Municipal Water District and Rancho California Water District.

The special meeting may not be the final North County JPA meeting even if the JPA is dissolved as of April 5. The board meets on the first Wednesday of the month, although the March 5 meeting was cancelled due to the lack of any agenda items. The next North County Joint Powers Authority meeting is scheduled for April 2.

16 Responses to "FPUD asks LAFCO for consolidation; will seek another JPA partner"

  1. RtotheM   March 20, 2014 at 1:54 pm

    Why would any other agency want to risk joining with FPUD? What they have done to their ‘partner’ is disgraceful. I pity any other agency that is willing to risk being invaded by their totalitarian neighbor.

    Mr. Chamberlain, Paging Mr. Chamberlain…

  2. oldtimer   March 20, 2014 at 4:28 pm

    "The FPUD board responded by pursuing the merger unilaterally. "The Fallbrook board and the Rainbow board have been working through the JPA process and have decided on a number of things," Brady said. "It

  3. Avo Farmer   March 21, 2014 at 8:09 am

    FPUD’s MOU with their employees had provisions for the employees to pay their full share of their retirement. The state controller data for 2012


    shows that in 2012 FPUD paid $31,176 per employee. That is an increase of $1500 over 2011. RMWD costs went down about $3,000 to $23,391 for 2012.

    Something is very, very wrong at FPUD. We need a full investigation of these people.

  4. Lee   March 21, 2014 at 10:34 am

    Hagglin’ over money, hagglin’ over money, hagglin’ over money . . .

    Anybody see the problem?

  5. oldtimer   March 21, 2014 at 3:17 pm

    Yes, Lee. I see the problem. The problem is that you are not paying attention.

    1. Rainbow DOES NOT WANT to be taken over by FPUD. It has been better managed (pre JPA) , makes more money, has employees who are more engaged, has a future.

    2.FPUD has many problems, lower annual earnings, no source of new income, static population, no future.

    3. LAFCO seems to have the ability to make Rainbow take on and eventually finance FPUD’s problems.

    These are both PUBLIC agencies. Under LAFCO’s rules, FPUD with the larger population can apparently just take over Rainbow. If you are a ratepayer of FPUD, this is a rescue performed by Rainbow. Never mind that the rescuer is unwilling and will wind up being dissolved without consent.

    How would you like it if your neighbor could take over your property just because he is bigger, and he wants it? Would that just be, as the only phrase you seem to apply to this goes, "hagglin over money"?

  6. Rainbow resident   March 21, 2014 at 3:54 pm

    Dear FPUD: We have no interest in being taken over against our will. Please go away and leave us be. Is that too difficult for your board of directors to understand.

  7. Pink   March 21, 2014 at 4:16 pm

    I tend to agree with you Oldtimer. Sounds a bit like the law of Imminent Domain doesn’t it. Don’t try to apply any logic to the things that Lee says. He tends to parrot the same phrases over and over to try and make them apply to any given situation, when in fact he has proven, on several different occasions, that he knows nothing about the subjects he comments on or how governmental agencies are run. To borrow one of his many phrases however, I do think that in this particular case, "we, the people" need to be able to vote before any merger or takeover, takes place.

  8. oldtimer   March 22, 2014 at 9:41 am

    Unfortunately for Rainbow ratepayers, it appears that even a vote might not help us. That FPUD has a larger population tilts the playing field. The numbers have predetermined the outcome.

    "If the LAFCO board approves the merger, sufficient petition signatures from residents of either district would trigger a public vote although the election would be for the two districts combined and the merger thus could be approved even if a majority vote from one of the districts opposes the merger."

    If I read the quote from the article correctly, even if every registered voter in RMWD opposed the takeover, one more vote for it from FPUD would bring about the dissolution of Rainbow. If someone out there has more information on that, please weigh in.

  9. Watchdog   March 23, 2014 at 3:25 pm

    Fallbrook public utility board and General MAnager stop being greedy. Milt Davis – start listening to ratepayers separate from Jpa and no merger . Run only your area fpud customers you need to listen to your ratepayers first don’t take on anybodys else’s problems.

    Rainbow mwd is well managed by there board . fpud should learn business 101 I agree with rainbow resident & RtotheM fpud stop crying there are bigger problems out there besides fpud.

  10. No 2 merger!!!   March 23, 2014 at 11:16 pm

    This is an outrageous move by FPUD! It’s very clear they have ZERO scruples!

  11. oldtimer   March 24, 2014 at 9:21 am

    FPUD disregards the JPA agreement they signed onto, which allows either district to withdraw and gives details about how it is to be done. When Rainbow takes the required steps to withdraw, they come back with a detailed response within 48 hours. They take hostile action asking for Rainbow to be dissolved and FPUD to get their assets. That raises questions. Why are they so intent on taking over Rainbow? Is FPUD in financial trouble? Why all the sanctimonious words about doing what is best for all ratepayers when it is obvious that they couldn’t care less about what Rainbow ratepayers might want. It smells of desperation. What haven’t they told the public? And why?

    The most important question is: who would ever trust FPUD to keep its word in any agreement with anyone about anything? In a friendly trial of possibilities with a neighbor, they make a deal and then blow it away when it doesn’t go as they want. Would you do business with someone who treated you that way?

  12. RtotheM   March 24, 2014 at 11:06 am

    Re #11: FPUD’s response was prepared well in advance of Rainbow’s withdrawal. Their application to LAFCO did not materialize in 48 hours. FPUD employees were obviously working on it for a long time, at the direction of Brian Brady no doubt. All the while Brian Brady was General Manager of Rainbow.

    There are laws that protect the public against such conflicts-of-interest. I hope Rainbow’s Board pursues action against their former GM for his malfeasance.


  13. Rainbowtoo   March 24, 2014 at 1:19 pm

    Putin takes Crimea while Brady takes RMWD?

  14. oldtimer   March 24, 2014 at 2:13 pm

    I hope this serves as a warning to any other districts even thinking about possible joint powers formation. Once you say you’d like to see if it works, you’re stuck. Just like the old tar baby story.

  15. Watchdog   March 24, 2014 at 6:50 pm

    It better make fpud and water board withdraw completely.Or face a lawsuit by the local community enough of this nonsense . As mentioned the community will speak in numbers if wrong direction is made by fpud board.

  16. Abused Rainbow Customer   April 19, 2014 at 9:27 am

    There are plenty of us who are sick of water bills that fully load the costs of infrastructure on per-meter fees rather than on usage. The Rainbow water district doesn’t want "at large" voting because it prefers to retain the power in divisions that lock in the power of agriculture interests to levy high fees on the residential divisions. We pay $98 dollars in water fees, not including sewer, before ONE drop of water falls from the faucet. This is insane. Rainbow water district needs to go. We won’t be held in thrall to agriculture interests any longer.


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