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

Major Water Rate Case Victory; San Diego County is Stronger Together

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As you know, the Water Authority has been working for years to conclude lawsuits over rates set by the Los Angeles-based Metropolitan Water District of Southern California – and this week, we have taken a big step forward with the entry of final judgment in two major cases.

Yesterday, a Superior Court judge has awarded the San Diego County Water Authority $44,373,872.29 for two cases covering rates paid by San Diego County ratepayers during 2011-2014. The award included $28,678.190.90 in damages for MWD’s breach of contract for the four years at issue, plus pre-and post-judgment interest. As these first two cases are finally concluded, the Water Authority is also working to narrow the scope of the remaining 2014, 2016 and 2018 cases (a 2017 case has already been dismissed).

Entry of final judgment caps a 10-year effort by the Water Authority Board of Directors on behalf of San Diego County ratepayers, proving once again our region is stronger together in charting our water future. While the damages and interest award is important, the entry of judgment will also help avoid future overcharges and thereby minimize future disputes based on rulings by the Court of Appeal. MWD’s improper 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.

The lawsuits generated other substantial benefits, such as requiring an increase in the Water Authority’s preferential rights to MWD water by approximately 100,000 acre-feet a year, equivalent to about twice the annual production of the $1 billion Carlsbad Desalination Project.

In February, the Water Authority’s Board of Directors voted to dismiss certain issues from the litigation after securing more than $350 million in local project subsidy benefits for the San Diego region, beginning late last year. In doing so, the Water Authority acknowledged the MWD Board action to stop imposing the district’s Water Stewardship Rate as a charge for transporting the Water Authority’s independent water supplies through MWD facilities, thus resolving for now that issue in future rate years. Consistent with the Water Authority Board’s direction, its attorneys are taking the steps necessary to narrow the litigation and have recently dismissed one case in its entirety.

As the lawsuits continue to wind down – which remains my personal goal – the Water Authority is working collaboratively with MWD member agencies across the district’s six-county service area to update MWD’s long-term water resource and financial planning. MWD’s Integrated Resources Plan, or IRP as it is called, will be its roadmap for the future, factoring in updated data and plans by many MWD member agencies who are working to develop their own local water supplies like the Water Authority and its member agencies have done over the past two decades and we will continue to do in the future.

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

Charting a Long-Term Water Strategy for San Diego County

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During my nearly two years as chair of the Water Authority’s Board of Directors, I have seen firsthand the regional benefits of decisions made by our predecessors to secure water supply reliability. I cannot count the number of times I have been thankful for all the board members, regional stakeholders, staff and supporters in decades past who wrestled with challenges and made tough decisions to invest in big ideas and projects. From water supplies and water storage to pipelines and water treatment, these decisions have resulted in water supply security for our region.

While the prudent plans of the past benefit current and future generations, we must continually grapple with the uncertainties of the future given the decades-long lead time for major infrastructure projects. One of my mantras as Board chair has been to focus not just on today, but the next 25, 50, and even 75 years. We know that new infrastructure investments will be necessary, and they take time to plan and build. The challenge is how best to balance the costs, benefits, and uncertainties.

Regional Conveyance System

That’s why more than a year ago, our Board authorized a technical feasibility study to look at whether building our own conveyance system to transport our locally controlled regional water supplies from the Colorado River Quantification Settlement Agreement (Imperial Valley) could be cost-competitive with other options. The initial findings, released in June, confirm that is the case and offer a preview of what would be needed to build a conveyance system for meeting the region’s long-term water needs.

In coming months, the Board will decide whether to move the study to the next phase. This next phase will look in-depth on financing and costs – and more importantly mutually beneficial partnerships designed to reduce costs of improving regional water management. These partnerships might include joint ventures with Water Authority member agencies, the Imperial Irrigation District, Mexico, agriculture, the State of California through its Salton Sea Management Plan, tribal governments, renewable energy developers, public-private partnerships and more.

Currently, Water Authority staff is reviewing a second independent analysis of the June study, sponsored by some of the Water Authority’s member agencies. It is vitally important that we take the time to digest new information and different perspectives, and perhaps incorporate their suggestions in the next phase of our study, especially as we look toward a project of this size and magnitude that will be paid for over many generations.

Even after reviewing the voluminous data, I expect that there will be a variety of opinions about how to proceed. We all recognize that it is inherently difficult to forecast both costs and benefits over several decades for this project or any other, which is why we have taken measured steps.  Should the study move to the next stage, the process will include many future off-ramps for the Board in case better alternatives emerge.

At every stage, our Board should be committed to a thoughtful, fulsome assessment, never shying away from the need to cooperatively, collectively and civilly engage on these important questions with real benefits – and perhaps consequences – for our children and grandchildren. This is fundamental to the civic process, and critical to charting our region’s course as we have been doing for more than 75 years at the Water Authority.

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

Good News: Hundreds of Millions of Dollars Approved for Local Water Projects

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I’m pleased to share some good news for our region. You will recall the Water Authority was recently awarded $15 million in state grants for several water supply projects throughout the county. Earlier this week, we also secured approval of more than $115 million for local water supply projects in San Diego County through the Metropolitan Water District of Southern California. That brings the total to nearly $500 million since we successfully challenged in court MWD’s imposition of an illegal contract clause barring our region’s participation in MWD’s funding program. Unlike state grants, MWD’s program is funded by its member agencies, including the Water Authority, in the water rates and charges we pay to MWD.

Kudos to our member agencies for their strong applications and to MWD’s Board of Directors for approving them. It is an affirmation of our ongoing efforts to collaborate with MWD and to address shared challenges.

Local water projects, along with the Water Authority regional supplies, are key components of our region’s long-term supply reliability strategy. A few months ago, we worked with Fallbrook Public Utility District, the City of San Diego and the City of Oceanside to secure MWD program funding for their projects.

The two most recent successes are:

  • Up to $91.8 million was awarded to the East County Advanced Water Treatment Plant. It will meet up to 30% of East County’s drinking water demands (approx. 13,000 acre-feet of water per year) and eliminate the discharge of 15 million gallons of partially treated wastewater into the Pacific Ocean.
  • Up to $23.4 million was awarded to the Membrane Filtration Reverse Osmosis Facility in the City of Escondido, which will provide up to 3,280 acre-feet per year of advanced treated recycled water to irrigate farmland.

Now that San Diego County agencies can compete for – and win – Local Resources Program funding, the Water Authority is taking actions in court to voluntarily dismiss certain related legal claims against MWD. We hope to soon have prompt resolution of our remaining litigation issues, and to work with the other MWD member agencies to create a strategic plan, a financing plan and a rate structure that are fair to ratepayers across Southern California.

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

Jim Madaffer: Supporting Protections for Ratepayers and Property Owners

/in , /by by Jim Madaffer, Board Chair

I hope this finds you safe and healthy despite the challenging circumstances that we face as a region, state and nation.

While our hearts are heavy, we continue working on several critical issues at the Water Authority this month, and I would like to share three of them with you briefly.

  1. The Water Authority’s Board of Directors on May 28 voted to support a comprehensive evaluation of the impacts of detachment proposals by the Rainbow and Fallbrook water districts to ensure that ratepayers and property owners in those districts and the rest of the county are protected from potential impacts and given a meaningful opportunity to engage in the process. That evaluation – under development by the San Diego County Local Agency Formation Commission, or LAFCO – should cover financial, water supply reliability, governmental, and environmental impacts, and it should ensure that the public and all affected agencies across the region can weigh in, according to the Water Authority Board resolution. I encourage you to read the entire resolution at www.sdcwa.org/lafco-detachment.
  2. Our Board has set a public hearing on 2021 rates and charges on June 25. As you know, this has been a very rough stretch financially for almost every business and agency – and water utilities are no exception. Staff has proposed a strategy that would raise the rates we charge our member agencies by about 6 percent next year. That recommendation is the result of cost-cutting, using our Rate Stabilization Fund and other measures. It’s a thoughtful and careful proposal, and I’m expecting our Board will have robust discussion before voting on this issue that affects us all.
  3. On the financial front, we are also doing our part to attract more state and federal economic stimulus funds for a long list of shovel-ready water projects. The Water Authority has coordinated a letter from several water agencies asking Congress for COVID-19 financial relief for public water utilities and ratepayers. At the same time, I am pleased to announce that several regional water supply projects in San Diego County are on track to receive a total of more than $15 million in state grant funds, pending a final decision this summer. The money would help local agencies advance conservation, environmental enhancements, water purification and other initiatives.

As always, I will continue to update you on these critical issues and others in the weeks ahead.

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

Jim Madaffer: We’re Here For You

/in , /by by Jim Madaffer, Board Chair

Today, I have a special project to share with you that we have been working on with our member agencies across San Diego County.

Since the pandemic started, the region’s water and wastewater agencies have collaborated closely to ensure that these vital services remain fully functional. After all, they are the foundation of both emergency response and recovery.

The utility heroes on the front lines are meter readers, plant operators, accountants, engineers and many others in every corner of our county who help to ensure the continued delivery of safe, clean drinking water for our homes and businesses. For the most part, these public servants work behind the scenes – but a short new video shows several of them at their posts, where they perform essential work from their homes and in the field.

Click here to watch this 60-second message from our colleagues that ends with one key phrase: We’re here for you. I hope it inspires you as much as it inspires me. And a special thank you to all our water professionals for continuing to do what you do day-in and day-out!

On a related note, as California starts to move toward re-opening its economy, the Water Authority is making responsible, careful and flexible plans to return to more “normal” operating conditions. However, we are in no rush; our teams quickly adapted to remote work and it is paramount that we avoid creating more complications by moving too quickly in these uncertain times. At least for May, our Board meeting will again be held remotely. You can watch it here on Thursday, May 28.

I also want to share my appreciation for efforts by state Senate President pro Tem Toni Atkins of San Diego to advance immediate action on economic recovery and creative solutions to jump-start California’s economy without exacerbating already challenging fiscal conditions. The Water Authority looks forward to partnering with the state to move forward on shovel-ready water and energy infrastructure projects that can help California’s economic recovery gain traction.

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

Jim Madaffer: Strategic Steps to Address Emerging Fiscal Realities

/in , /by by Jim Madaffer, Board Chair

Across the country, public agencies are scrambling to fill holes created by the pandemic – financial holes and, worse yet, holes in the workforce. It is safe to assume, until a vaccine is developed or an antibody treatment is found, we are living the new normal.

As we hope and pray that the worst days of the coronavirus are behind us, I am so thankful that the Water Authority took aggressive early action to protect employees and that we have had no COVID-related illnesses. I’m also grateful to report that our region’s water treatment and delivery systems are in good shape, and that they continue to provide clean, safe drinking water 24/7 due to the efforts of a few thousand employees of the Water Authority and its 24 member agencies. These dedicated public servants are doing their jobs day and night, despite numerous personal and logistical challenges.

That said, our region’s water agencies are collectively facing serious declines in revenues; businesses are not using water as expected, which means water sales have plummeted. Unlike some other industries, most of our costs are fixed. In fact, the Water Authority’s operating departments only account for about 6 percent of the budget.

This means that even when water sales drop, we still must pay the “mortgage” on the system – from pumps to pipes to filtration and whatever other costs we cannot control, such as increases from our water suppliers or higher costs for energy and treatment chemicals. For instance, we expect the Los Angeles-based Metropolitan Water District of Southern California to raise rates in San Diego County by more than 7 percent in 2021 despite our pleas for relief on your behalf.

Details about the financial impact of coronavirus will take weeks or months to emerge, but the Water Authority is already taking proactive steps to address anticipated challenges, from instituting a hiring freeze to assessing which non-essential projects and expenses can be deferred. I assure you that we are working every day to sustain our core mission to maintain the many values that we provide our region and make smart choices to ensure our long-term viability.

It is not an easy task, but we have 75 years of history that say we can do this together – and I know we will.

On a hopeful note, the region’s water agencies have joined forces to raise thousands of dollars for the Jacobs & Cushman San Diego Food Bank through voluntary donations by board members and employees. We’re always looking for opportunities to raise more money given the ongoing significance of the need. Click here to donate – and do not forget to share the link with family, friends and others who may want to participate. Every dollar helps feed those in need.

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

Jim Madaffer: Adjusting to the New Normal

/in , /by by Jim Madaffer, Board Chair

As we adjust to the new – and hopefully temporary – realities of this pandemic, it’s worth reflecting on the good that is happening in our community, our state and our nation.

  • Doctors and nurses are bravely treating the sick by the thousands.
  • Grocery store employees are working long hours to stock shelves and serve customers.
  • Restaurants are evolving to offer takeout, and customers are showing up to support them.
  • Houses of worship are meeting remotely.
  • Companies are transitioning to make ventilators, sanitizers and other products that are so necessary.

Of course, food banks are also doing tremendous work to support residents who are suddenly without a paycheck. That’s why the Board leadership of the San Diego County Water Authority is joining regional efforts to fight the economic impacts of the pandemic by setting up a virtual food drive in partnership with the San Diego Food Bank.

The San Diego Food Bank helps feed hundreds of thousands of hungry people each year – and the numbers are growing rapidly. The Water Authority’s virtual food drive allows donors to select and purchase items such as canned meats, fruits, peanut butter and oatmeal for distribution to needy residents. Click here to donate – and don’t forget to share the link with family, friends and others who may want to participate.

I’ve heard it said that true colors come through during a crisis, which is why I’m proud to report that our regional efforts to safeguard our water supplies have generated substantial regional and even national attention in recent days. Click here for a great story by 10News San Diego.

We’re going to keep it up as long as needed to beat this thing.

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

Jim Madaffer: Supporting Our Community in Challenging Times

/in , /by by Jim Madaffer, Board Chair

Coronavirus is on all our minds these days, with the countless challenges that we face at every level of society, including our homes and families.

While there are many uncertainties, I want to assure you that the Water Authority and its 24 member agencies are doing everything possible to address this complex situation, from following health and safety protocols to ensuring the continued operation of the water treatment and delivery system regardless of the challenges.

Public water supplies in the San Diego region remain safe to drink due to robust standard treatment processes by local and regional water providers. Drinking water provided by the Water Authority and its member agencies is treated by a combination of technologies – including sedimentation, filtration and disinfection – that chemically deactivate and physically remove bacteria, viruses and other contaminants. The U.S. EPA recommends that Americans continue to use and drink tap water as usual.

To support continued operation of critical infrastructure, the Water Authority has activated its Emergency Operations Center, increasing the region’s ability to respond to any challenges that emerge. The EOC supports the need for enhanced communication between the Water Authority and its member agencies as the public health crisis evolves. In addition, the agencies have back-up plans to assist each other should key personnel be unable to work.

We’ve taken other operational steps as well. Agency employees identified as critical to operation and maintenance of key infrastructure will continue to report to work and conduct normal job functions while complying with enhanced safety precautions such as social distancing measures. Non-critical staff at many agencies, including the Water Authority, are telecommuting or will begin remote work shortly to minimize the potential for virus transmission.

Of course, we will continue to monitor this situation closely and make strategic decisions to support our community in these difficult times. I will update you periodically, and we will keep information on our website – www.sdcwa.org – current as the situation evolves.

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 Chairman Mark Muir. Photo: Water Authority Historic water deal

Historic Water Deal Provides Less Expensive, More Reliable Supplies

/in , /by /San Diego County Water Authorityby Mark Muir, Board Chair

A historic achievement for the San Diego region passed almost unnoticed when the San Diego County Water Authority’s Board of Directors adopted new wholesale water rates in late June.

The rate-setting process highlighted how the Water Authority’s independent water supplies from the Colorado River are now both less expensive and more reliable than supplies from the Metropolitan Water District of Southern California. It’s an accomplishment that the region’s water officials started working toward two decades ago, and one that will bear fruit for decades to come.

The value of our independent water supplies will grow in coming years given the rapid increases in MWD’s rates, which have risen far faster than the cost of the Water Authority’s Colorado River supplies secured in 2003 through a complex, multi-state pact known as the Quantification Settlement Agreement.

Historic agreeement secures San Diego economy and quality of life

From the start, that landmark deal helped secure our economy and quality of life by giving us a major new source of water with a higher priority – or legal right – to Colorado River water than MWD. The agreement allowed the Water Authority to transfer increasingly large amounts of conserved water from the Imperial Valley to San Diego, so that by 2020 it will meet about half of our region’s projected water demand.

That visionary agreement also minimized the impact of MWD’s water delivery cutbacks during the past two droughts. In 2015, for example, MWD reduced water deliveries by 15 percent, but the Water Authority’s independent supplies meant we had enough water to meet 99 percent of normal demand.

While the supply benefits of the conservation-and-transfer agreement have long been clear, the region is just now starting to feel the cost benefits as well.

Here’s why: At the start, our independent Colorado River supplies were more expensive than MWD water. However, the cost of the Water Authority’s independent Colorado River supplies is controlled by a contract linked to the rate of inflation, which means those costs are rising far more slowly than MWD’s rates and charges.

Millions in savings achieved

In addition, the Water Authority has benefited from lawsuits that forced MWD to drop illegal charges for delivering our independent Colorado River supplies. A 2017 appellate court ruling netted the Water Authority about $15 million in savings in 2019, with tens of millions of additional savings in years to come.

The combined effect is that the Water Authority’s independent Colorado River supplies are less expensive than MWD supplies by $44 per acre-foot this year. In 2019, the difference will grow to $68 per acre-foot, and in 2020 our independent supplies are projected to be less expensive by $121 per acre-foot.

That’s worth celebrating because it means regional wholesale water rate increases in 2019 are among the lowest in 15 years – a testament to the all those who have worked for decades to secure a safe, reliable and cost-effective water supply for everyone who calls this place home.

 

San Diego County Water Authority Board Chairman Mark Muir. Photo: Water Authority Historic water deal

Everything in San Diego County is Brought to You by Water

/in , /by /San Diego County Water Authorityby Mark Muir, Board Chair

We’ve got a great thing going here in San Diego County, from the mountains to the coast and from the far northern reaches of our region to the international border.

Our economy is strong – one of the largest in the nation – with everything from global giants to startups trying to make a splash. We’ve got the most small farms of any county in the country and innovative industries that put us on the map.

And our quality of life is second to none. People come from all over the world to play here and stay here. They come for our attractions, our beer, our climate and everything else this great region offers.

That makes me proud to call this place home. And it reminds me that none of this would be possible without one key ingredient: a safe and reliable water supply.

Sufficient water supplies required for San Diego’s advanced economy

Think about it: We get just 10 inches of rain a year at Lindbergh Field. That’s not enough to sustain even a small fraction of what we do here day in and day out. In fact, the last time our natural water resources were sufficient for San Diego County was 1946.

At the time, San Diego was just at the start of its renaissance, first as a center of military operations, and later as one of the largest, most vibrant metropolitan areas in the nation.

Today, we boast an advanced economy that’s still a key military hub, and also a center of manufacturing, brewing, tourism, agriculture and so much else.

There are lots of reasons for our collective success, but none more foundational than steady and sufficient water supplies. Water is critical for developing new smart phone technology, next-generation medicines, high-tech military ships and world-class guitars and banjos. And the list goes on.

That’s where the San Diego County Water Authority and its 24 member agencies come in. Together, we secure, treat and deliver this vital resource 24/7/365.

We do it in pioneering and innovative ways, like new and enlarged reservoirs and the nation’s largest seawater desalination plant. We also work the front lines of water-use efficiency with rebates and resources to stretch every drop, because we appreciate the value of the region’s investments in safe and reliable water supplies.

So, every time you slice an avocado on your salad, use your smartphone for directions to the Gaslamp, watch your kid hit a home run on a Little League field, or stroll the tree-lined trails of Balboa Park, remember that this San Diego life is Brought to You by Water.

For more on the Water Authority’s Brought to You by Water program, go to https://b2ubyh2o.org/.