Fallbrook CPG to urge LAFCO to support FPUD/Rainbow detachment without exit fee

Joe Naiman

Village News Reporter

San Diego County’s Local Agency Formation Commission will decide on the applications of the Fallbrook Public Utility District and the Rainbow Municipal Water District to detach from the San Diego County Water Authority and join the Eastern Municipal Water District, and LAFCO can also set conditions including a potential “exit fee” to the SDCWA to cover the revenue the CWA will lose if it no longer collects fixed costs from FPUD and Rainbow. The Fallbrook Community Planning Group will be sending a letter to LAFCO in support of the detachment and against any exit fee.

The planning group voted 13-0 March 21 to write a letter in support of the detachment proposals without an exit fee. Anna Strahan was not present at the meeting. Stephani Baxter, whose husband is the FPUD board president, recused herself.

“It’s a good idea. Anything we can do to lower our ratepayers’ fees and cost of water and still be assured of getting the same delivery and the same water, I think it’s appropriate for us,” said planning group chair Eileen Delaney.

FPUD has been part of the San Diego County Water Authority since the CWA was formed in 1944. The Rainbow Municipal Water District was formed in 1953 and became a CWA member. The Metropolitan Water District of Southern California and the CWA began delivering water to San Diego County in 1947. MWD's San Diego Aqueduct conveys water to a delivery point 6 miles south of the Riverside County line. That allowed MWD and the CWA to provide equal contributions to connect from MWD's Colorado River Aqueduct to the San Vicente Reservoir in Lakeside. The CWA northern boundary is the county line. All but one of FPUD's connections are from MWD pipelines rather than from CWA pipelines, and four of Rainbow's eight connections are to the MWD portion of the pipeline.

The CWA's supply rate is a melded rate which melds the cost of water delivered from MWD, water purchased from the Imperial Irrigation District under the Quantification Settlement Agreement, and water produced by the Claude "Bud" Lewis Carlsbad Desalination Plant in Carlsbad. The CWA also has transportation, storage, and customer service charges along with fees and charges for fixed expenditures which are incurred even when water use is reduced. This creates the possibility that FPUD and Rainbow can reduce their cost of purchasing water - and thus their rates - by detaching from the CWA and becoming part of another MWD member agency.

The two districts anticipate a combined savings of between $8 million and $10 million annually by purchasing water from Eastern rather than from the CWA. Due to fixed costs the CWA and the other 22 CWA agencies could incur adverse financial impacts if FPUD and Rainbow left; a preliminary CWA analysis estimated an annual impact of $13 million in 2018 dollars.

The Eastern Municipal Water District is a member of MWD and purchases imported water directly from MWD. The Western Municipal Water District is also a member of MWD and provides retail water sales of MWD supply to the Elsinore Valley Municipal Water District as well as to the Rancho California Water District. If FPUD and Rainbow detach from the CWA and join Eastern their status would be similar to that of the two water districts which obtain MWD water from Western. The Eastern Municipal Water District currently covers 555 square miles and includes Hemet, Menifee, Murrieta, Perris, Romoland, San Jacinto, Temecula, and Winchester. The district has more than 140,000 water customers.

"We're very glad they voted to support this," said FPUD general manager Jack Bebee.

"The planning group was very engaged and supportive of this effort to switch water wholesalers," Bebee said. "They get the magnitude of high water bills here in Fallbrook and Rainbow and the impact they are having on our agricultural customers as well as our residential and business customers."

The County Water Authority Act requires a majority vote of the electorate of an agency which detaches from the CWA, which indicates the ability of an agency to leave the CWA. “The request is for LAFCO to follow the law,” said Rainbow general manager Tom Kennedy.

“I do agree that LAFCO has broad powers, but usually that’s where the law is unclear,” Kennedy said. “The County Water Authority Act is very clear.”

The two detachment proposals are officially separate applications but are being processed concurrently.