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Gary Croucher-Board Chair-San Diego County Water Authority-Primary

San Diego Region is Drought-Safe This Summer

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Statewide drought conditions are highlighting the value of regionally and locally controlled water supplies in San Diego County, where the Water Authority announced June 21 that the region is protected from drought impacts this summer, and through 2045, despite continued hot and dry conditions. No shortages or regional water-use mandates are in the forecast – the result of three decades of strategic investments that create an aquatic safety net for San Diego County’s $253 billion economy and our quality of life.

The region’s diversified water supply portfolio includes highly reliable and locally controlled supplies, including desalinated seawater from the Claude “Bud” Lewis Carlsbad Desalination Plant. It also includes high-priority, low-cost, conserved water from the Quantification Settlement Agreement, the nation’s largest conservation-and-transfer agreement. The combination offers significant protection against droughts and other emergencies even during multiple dry years.

San Diego region is “drought-safe” thanks to water-smart practices

I offer my sincere thanks to all San Diegans for everything you have done to make sure that we have enough water to meet the region’s needs now and for decades into the future. You have invested through your water bills and your water-smart practices, and those efforts are paying off in tangible ways.

At the same time, it’s important that we all continue embracing water-use efficiency strategies that have become part of our regional ethic. Simple but important steps include turning off the faucet while brushing teeth, fixing irrigation system leaks, and using hoses with automatic shut-off nozzles.

Thanks again for all you do, and remember to stay water-smart this summer!

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Controlling the Budget and Water Rates in a Challenging Era

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As we head into summer, we look forward to the continued retreat of COVID-19 and a full return to baseball games, barbeques, and graduation celebrations.

We also take a moment to remember that those things we cherish about San Diego County are all based on a reliable supply of water. It is the foundation of everything we do in our semi-arid climate. That’s why I’m so pleased to report that we have reliable supplies through at least 2045, even during multiple dry years like this one. That assurance was part of the 2020 Urban Water Management Plan that the Water Authority Board of Directors recently approved.

Water supply reliability

The Board is also considering the proposed 2022 water rates, along with the budget for fiscal years 2022 and 2023 – a challenging task to say the least. The proposed two-year budget is $1.7 billion, a 0% change from the current two-year budget due to our continuing commitment to cost control. As usual, more than 90% of the recommended budget is for buying and treating water or building and financing infrastructure. This reflects our long-term strategy to invest in supply reliability to meet current and future needs of the San Diego region – a strategy that is paying significant dividends during the current drought hitting most of California.

Water Authority staff also proposed increasing rates and charges for member agencies by 3.6% for treated water and 3.3% for untreated water in calendar year 2022, attributable to more rate increases by the Metropolitan Water District, continued payments for past investments in supply reliability, and inflationary pressures on energy, chemicals, and construction materials.

Rigorous review of budget and water rates

Each budget and rates package undergoes a rigorous review process, as we steward ratepayer funds to ensure continued water supply reliability in support of our $253 billion economy and quality of life. This year’s budget process started in fall 2020 with internal analyses, and it continued with meetings with our retail member agencies over the past several months. The process continued this week with the Board holding a third budget workshop. We expect to vote on the budget and rates package, following any revisions, on June 24.

A final note: I thought you might be interested in this letter that I recently sent to Gov. Newsom to share my appreciation for his leadership navigating the complexities of the current drought and outlining some of our key policy principles. It’s gratifying that the governor has avoided the kind of one-size-fits-all regulations we faced in the last drought – and I encouraged him to stay the course with regards to letting local leaders determine the appropriate response for their areas.

Urban Water Management Plan-2020-San Diego County Water Authority-San Vicente Dam

The San Diego County Water Authority Board of Directors May 27 approved the Water Authority’s 2020 Urban Water Management Plan highlighting a “water portfolio approach” that ensures reliable water supplies for the region through the 2045 planning horizon – even during multiple dry years. Photo: San Diego County Water Authority

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Investments Protect San Diego Region from Drought

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It has been a very busy few weeks in the water world, with the governor declaring a drought emergency in two Northern California counties and increased discussions across the West about how to manage water through a very dry year.

While the challenges are real in some parts of the state, I applaud Governor Newsom for taking a targeted, flexible, and iterative approach to drought management. This approach provides support for individual regions that are suffering from drought while also recognizing regions like San Diego County that have sufficient water supplies due to three decades of investments in supply reliability.

Water Portfolio Strategy

The governor’s Water Portfolio Strategy aligns with our region’s long-term investments in a diversified water portfolio, desalinated seawater, conserved water from Imperial County, local water-use efficiency measures, member agency recycled water and local supply projects, and increased water storage. It’s especially important to highlight the efforts of our ratepayers, who have cut per capita water use by nearly half since 1990. Because of those actions and others, our residents have enough water for 2021 and future dry years.

In addition, the innovative and resilient water supply portfolio created by the Water Authority and its 24 member agencies puts our region in a unique position to provide solutions that can help California weather this drought and future droughts – for instance, by storing water in Lake Mead. We look forward to working with the governor and his staff to collaborate on projects and programs where we can use our assets and experience to help areas that are hit hard by drought in the face of a changing climate.

Finally, I invite you to read my latest commentary in The San Diego Union-Tribune that addresses many of the issues being faced statewide and how that impacts San Diego County.

I hope you also take a moment to appreciate the cartoon in the U-T by Steve Breen, which perfectly captures our investments over the past three decades.

Steve Breen Drought cartoon-prepared-drought

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Water Authority Credit Remains Strong as Risks Emerge

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All three major rating agencies affirmed the San Diego County Water Authority’s strong credit ratings, which will help us minimize the cost of financing important water reliability projects.

It is particularly gratifying that the reports cited the Water Authority’s strategic management, our conservative approach to water sales projections, and the benefits of rate case litigation that recently resulted in $44.4 million being refunded to local retail water agencies, among many other factors. In affirming their credit ratings, the services also noted the Water Authority’s strong financial leadership (including prudent strategies to manage issues related to COVID-19), decades of success diversifying water supply sources, our commitment to infrastructure maintenance, and our financial reserves for managing contingencies.

Significant investments in supply diversification

Just one example: Fitch Ratings said that the Water Authority’s “operating costs are low” and that the Water Authority’s “significant investments in supply diversification (that) have allowed SDCWA to continue to meet water demands in its service area.” Fitch also accounted for the Water Authority’s current hiring freeze, spending cuts and deferral of $30 million in planned capital spending to proactively manage finances during the pandemic.

At the same time, rating agencies also noted significant challenges ahead, including efforts by Fallbrook Public Utility District and the Rainbow Municipal Water District to “detach” from the Water Authority – a move that could negatively impact ratepayers countywide. If the two North County agencies leave per their plans, Water Authority analysis shows that the other 22 member agencies – who serve about 3.2 million residents – will have to pay $16 million to $46 million more per year to cover the cost of the departing agencies.

Detachment and credit ratings

Moody’s said detachment could lead to a credit downgrade, which would increase borrowing costs for critical water reliability projects. S&P Global affirmed its AAA rating for the Water Authority. However, it issued a negative outlook for the agency and called detachment uncertainty “an additional credit stressor” – “especially if an approved detachment sets a precedent if members can easily detach from the authority.” S&P added that, “this would be further exacerbated if the two members are not required to pay for their portion of the associated debt and infrastructure costs that the authority has undertaken to provide reliable water sources.”

In May 2020, the Water Authority’s Board of Directors voted to oppose detachment unless four conditions can be met related to protecting Fallbrook and Rainbow ratepayers, avoiding negative impacts for other member agencies, protecting the Sacramento-San Joaquin Bay-Delta, and maintaining the Water Authority’s voting rights at MWD. The issue is under review by the San Diego Local Agency Formation Commission, known as LAFCO. The LAFCO process, which is designed to provide for an impartial analysis of these issues, will allow the Water Authority and all other affected parties to determine if these conditions are satisfied. If not, the Water Authority will oppose detachment.

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Local Water Agencies to Receive $44.4 Million Rebate

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I’m so pleased report that yesterday the Water Authority’s Board of Directors voted to distribute a rebate of $44.4 million to its 24 member agencies across the region after receiving a check for that amount from the Los Angeles-based Metropolitan Water District of Southern California to pay legal damages and interest.

The rebate resulted from the Water Authority’s decade-long rate case litigation in state Superior Court seeking to compel MWD to set legal rates and repay overcharges. The Water Authority won several critical issues in cases covering 2011-2014 and was deemed the prevailing party, which means the agency is also owed legal fees and charges in addition to the recent damages and interest payment from MWD.

The court rulings will also help avoid future overcharges and thereby minimize future disputes over MWD’s unlawful Water Stewardship Rate for transporting the Water Authority’s independent water supplies through MWD facilities. Those charges – if they had continued – would have cost San Diego County residents more than $500 million over the life of the Water Authority’s water delivery contract with MWD.

This day has been a long time coming. We never wanted to litigate these issues – but if we had not had the courage to do so, MWD would still be collecting the illegal fees and we would not have money to give back to local retail water agencies across the region.

MWD Overcharges-Rate Case-Rebates-Member Agencies

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Water Authority’s Legal Efforts Protect Local and Regional Ratepayers

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I have some important news for our region to share: The San Francisco Superior Court has ruled the San Diego County Water Authority is the prevailing party in the agency’s first two lawsuits heard challenging rates and charges set by the Los Angeles-based Metropolitan
Water District of Southern California.

The order entitles the Water Authority to recover its attorneys’ fees and costs in those cases, in addition to a $44 million damage and interest awardmade earlier.

“San Diego prevailed, and the judgment not only benefits its own ratepayers but all of thenearly 19 million people in Metropolitan’s service area because enforcing cost-of-service principles serves the interests of all ratepayers,” said Superior Court Judge Anne-Christine Massullo in her Jan. 13 order, which can be appealed.

The exact amount of recoverable fees will be decided later. It is deeply gratifying that the court not only validated our claims but acknowledged the importance of protecting ratepayers by water agencies following the law.

The order makes it clear once and for all that our desire to protect San Diego ratepayers was never intended to harm MWD, its other member agencies or the ratepayers they serve. Rather, the litigation was necessary to address serious flaws in MWD’s rates that will, as the court said, ultimately benefit not only San Diego County ratepayers, but all Southern Californians.

This order is another major step toward achieving Water Authority board objectives and one of my key initiatives as Board Chair: to conclude the litigation and work together with other MWD member agencies to address MWD’s water resource and rate challenges. This is essential in order to ensure MWD’s fiscal sustainability—and that of its member agencies—now and in the future.

Click here to learn more about this issue.

Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Building a Collaborative Vision for San Diego County

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We welcome the new year with heavy hearts about the recent events in our nation’s Capitol and a renewed commitment to civility and respect at every level of government.

At the same time, we are maintaining our concentration on our priorities for the year, which are numerous and significant. I’m focused on advancing San Diego County’s interests as we continue to fulfill our mission of making sure that our region has safe and reliable water supplies at an affordable price, which is critical to maintaining our economic competitiveness and sustaining our wonderful quality of life.

Here’s some good news about how the Water Authority is putting San Diego County first in 2021:

  • As part of our commitment to meeting some of the strictest environmental regulations in the world, the Water Authority and Poseidon Water have launched a state-of-the-art project evaluating intake screen technologies at the Claude “Bud” Lewis Desalination Plant, which has served more than 65 billion gallons of locally produced water over the past five years. Crews are testing both active screen and passive screen technologies in Agua Hedionda Lagoon to complete the full-scale project by the end of 2023.
  • We are updating our Urban Water Management Plan, which is a critical part of meeting the long-range water needs of the San Diego region for both normal years and dry years. This planning document is increasingly important given the increasingly unpredictable impact of climate change. The planning process is, of course, a collaborative effort with our 24 member agencies as we account for their local supplies and demand projections.
  • Our low-cost supplies of conserved water from the Imperial Valley are the foundation of our diversified supply portfolio. With Board direction, staff has launched the next phase of a study to explore a new system to deliver those supplies because initial studies show it could be most cost-effective than the current system and mutually beneficial for our partners in the valley. The study will only advance if it benefits the region by providing cost savings for ratepayers.
  • As the regional economy recovers, we are working hard to protect ratepayers by maintaining a focused and strategic budget. It’s a tough balance, but we are working hard to find the right combination of near-term and long-term funding priorities in these challenging times.
While I’m glad to put the old year behind us and welcome 2021, I’m certain there will be many challenges and opportunities ahead. I’m committed to keeping you informed along the way, and to working with our Board, member agencies, stakeholders, regional leaders and ratepayers to create innovative solutions. In my 20-plus years on the Water Authority Board, we’ve never shied away from big and bold ideas – and 2021 will be no exception.
Gary Croucher-Board Chair-San Diego County Water Authority-Primary

Building a Vision of Regional Strength Through Collaboration

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If more than three decades in the fire service taught me anything, it’s that we are always stronger together. This has never been more clear than over the past several months, as the Water Authority and its 24 member agencies have worked together to ensure an affordable, safe and reliable water supply, as San Diego County works to overcome the COVID-19 pandemic. I truly believe we are stronger when we roll up our sleeves and work together. As we used to say on the fire lines: You go, we go.

We know how to do this because we’ve been doing it for more than 75 years. Working together, the Water Authority and its member agencies have built a water supply that supports our economy and quality of life and protects us from shortages in times of drought and emergencies. Our diversified supply, including major conservation investments in the Imperial Valley, is held up as a statewide and nationwide model.

The Water Authority plays a critical role as the region’s long-term water planning agency and wholesale water provider for 3.3 million residents and our $245 billion economy. We take the long view because we’re responsible for ensuring a safe and reliable water supply for our children and grandchildren. That’s a challenging task in our semi-arid region with few natural water resources, requiring us to look decades ahead to weigh complex options that serve the region’s water ratepayers and taxpayers.

As the newly elected Chair of the Water Authority, my number one priority will be to support critical long-term planning initiatives to ensure that water and facilities are in place to support future generations at an affordable cost. I plan to do this working in collaboration not only with the Water Authority’s 24 member agencies, but also with other regional agencies such as the Imperial Irrigation District and Metropolitan Water District. The Water Authority will also be working with key stakeholders, including environmental, business and other civic and philanthropic groups.

In taking the helm, I also want to recognize the work by General Manager Sandy Kerl, including her leadership through the myriad challenges presented by the COVID-19 pandemic. She is responsible for day-to-day operations at the Water Authority and for guiding a talented staff of about 250 employees, most of whom are now working and sheltering in place. Sandy and her leadership team worked especially hard to limit rate increases during the pandemic, and will be looking for new ways to protect ratepayers as we head toward 2021.

In closing, I want to assure you that you can count on me in the spirit of, “you go, we go!” The Water Authority stands behind our 24 member agencies and the commitment to providing an affordable, safe and reliable water supply now, and for future generations. At the end of the day, I am confident that San Diego County is, and will remain, stronger together.

San Diego County Water Authority Board of Directors Chair Jim Madaffer-primary-View from the Chair

Threat Emerges to Reduce Water Supply Reliability, Fracture Region

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Thank you for your support over the past two years. It’s been an honor to serve as the chair of the Water Authority’s Board of Directors. While some may not realize it, this 36-member Board plays a critical role in sustaining San Diego County’s quality of life and economy.

And I’m pleased to say that this Board engages in the difficult discussions and decisions to make sure our children and grandchildren enjoy the same safe and secure water supplies that we enjoy today. Unfortunately, it’s also true that efforts are underway that would undermine decades of successful planning that has served our county well from Fallbrook to San Ysidro.

This week, the Water Authority filed a formal response to address a proposal by the Fallbrook and Rainbow water districts to detach from the Water Authority and annex into Eastern Municipal Water District in Riverside County. These proposals would increase costs for water ratepayers in San Diego County, reduce the county’s voting power, and decrease water supply reliability for farms and residents.

Our detailed filing with the San Diego Local Agency Formation Commission (LAFCO) spells out how the Fallbrook and Rainbow detachment proposals contain significant areas of misleading or incomplete information that must be addressed before LAFCO and all of the interested parties countywide can understand the full scope of impacts that would be created by detachment. The LAFCO process is expected to take at least another year.

As proposed by Fallbrook and Rainbow, the detachments would allow Fallbrook and Rainbow to avoid paying for water supplies and infrastructure that have been developed in collaboration with those agencies and are currently being used by those agencies to meet their customers’ needs. Abandoning those cost obligations would force other ratepayers countywide to cover their portion of the bills already incurred for decades of investments in supply reliability.

Our agency’s analysis shows that detachment, as proposed, would reduce water reliability and increase risk for Rainbow and Fallbrook customers, create environmental impacts that haven’t been studied, and impair the successful long-term planning efforts that have served our county well. And it would give Riverside County water agencies more control over San Diego County’s water future, including water rate and property tax impacts. The Water Authority’s formal response to the Fallbrook/Rainbow reorganization proposals and related documents are at www.sdcwa.org/lafco-reorganization.

It’s critical that LAFCO and all the interested parties across San Diego County take the time to address the full scope of consequences created by these unprecedented proposals so we avoid unintended harm to our region. The Water Authority, its member agencies and regional planning agencies such as SANDAG have worked together for more than 75 years to provide this region with safe and reliable water supplies. Trying to turn back the clock now is a costly, difficult process with numerous impacts to Fallbrook and Rainbow customers and across the region.

As we transition to the new Board leadership in October, I trust that you will give incoming Chair Gary Croucher and Vice Chair Christy Guerin the same support that you’ve given to me over the past two years. And don’t forget that whatever the challenges, San Diego County is stronger together.

View From The Chair represents the viewpoints of Jim Madaffer, Chair of the San Diego County Water Authority Board of Directors.
San Diego County Water Authority Board of Directors Chair Jim Madaffer-primary-View from the Chair

Help Us Reduce Water Rates

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As my two-year term as the Water Authority Board chair winds down, it’s my pleasure to update you on two important efforts that are underway for the betterment of the San Diego region.

First of all, our Board voted unanimously last week to spend a few more months discussing and assessing a study of a new regional water conveyance system to deliver our high-priority Colorado River supplies from the Imperial Valley. The work we’ve done over the past year shows the project would produce billions of dollars in potential savings over several decades – and we plan to use the next few months to outreach to stakeholder communities about this study, address questions raised in recent weeks and seek Board direction in November.

Ultimately, the questions are bigger than a new aqueduct – they are about how we sustain our economy and quality of life at a reasonable cost. A new multi-benefits conveyance system is one potential solution – but if not that, then we must grapple with equal intensity over whether it makes sense to pay ever-increasing costs (over which we have no control) to the Los Angeles-based Metropolitan Water District of Southern California to deliver our water for generations, or whether a plan based mainly on local water generation is financially feasible.

The other big issue this month is related – my request that MWD adopt rate relief measures this fall that reduce our water costs. Put simply, despite the recession and the COVID-19 pandemic MWD has not enacted the same kind of rate relief as the Water Authority, which froze hiring, deferred non-essential projects and significantly reduced travel – among other steps. In the end, we limited rate increases to 4.8-4.9 % for 2021 – and more than 60% of that is directly attributable to MWD.

Now, we’re asking MWD to take a similar approach, recognizing that we’re all in this together. We aren’t prescribing the strategies for MWD. We’re just asking that the nation’s largest water agency help its customers, and we’re pledging that any rate relief MWD provides will be passed directly to our member agencies. You can view the letter I sent to MWD at www.sdcwa.org/support-rate-relief-mwd.

I invite you to help move this conversation forward by encouraging MWD to find meaningful cost savings this fall that are reflected in its budget. Please take a moment to do so at www.sdcwa.org/support-rate-relief-mwd by submitting a letter of support for rate relief.

View From The Chair represents the viewpoints of Jim Madaffer, Chair of the San Diego County Water Authority Board of Directors.