A water war is heating up in the North County.
Rainbow Municipal Water District and Fallbrook Public Utility District want to leave the San Diego County Water Authority (SDCWA) because of rising costs. They want to join the Eastern Municipal Water District in Riverside County, a move that could save their customers up to $5 million a year.
San Diego County’s Local Agency Formation Commission has approved the annexation of the development originally known as Meadowood into the Rainbow Municipal Water District.
A 7-0 LAFCO board vote May 3, with no City of San Diego representative present, approved the detachment of the land from the Valley Center Municipal Water District and the annexation of the property into the Rainbow district. Tri Pointe Homes is now the parent company of Pardee Homes, and the development’s name has been changed from Meadowood to Citro. An amendment to the sphere of influence, which determines the boundaries best served by a particular agency, was also approved to allow for the boundary changes.
The Rainbow Municipal Water District will be acquiring two emergency generators and a solar-powered battery backup system.
Rainbow’s board voted 5-0 April 27 to authorize general manager Tom Kennedy to execute purchase orders for the two generators and the battery backup system equipment. The purchases will be funded by a state Office of Emergency Services grant, and Kennedy’s $300,000 spending authorization matches that grant amount.
The Rainbow Municipal Water District board approved an environmental mitigated negative declaration along with a Mitigation Monitoring and Reporting Program for Rainbow’s Gopher Canyon Water Pipeline Improvements project. The board’s 5-0 vote, March 23, adopted the MND and the MMRP while also formally approving the Gopher Canyon Pipeline Improvements project.
The San Diego County Water Authority was successful in its rate lawsuit against the Metropolitan Water District of Southern California, and the SDCWA provided a check to the Rainbow Municipal Water District for Rainbow’s share of the settlement. On March 23, the Rainbow board voted 5-0 to place the money into the district’s reserves rather than to attempt to provide refunds to each individual ratepayer.
In December, a Rainbow Municipal Water District water main broke in the 2800 block of Dentro De Lomas Road. The main break caused severe damage to the asphalt pavement, so replacement of the pavement will be required. Rainbow’s board voted 5-0, March 23, to approve a contract with Kirk Paving to provide the repaving.
Many avocado growers in San Diego have gone out of business in recent years as they struggle with the rising cost of water, says Charlie Wolk as he walks through a recently forsaken grove in Rainbow that he tended for more than a decade.
The electronic payment the Rainbow Municipal Water District made to the San Diego County Water Authority didn’t process by the date it was due, so Rainbow was assessed a late penalty. The fault was in the electronic processing rather than Rainbow’s lack of a payment attempt, so March 25, the SDCWA board unanimously approved a waiver of the penalty.
The water agencies in Fallbrook and Rainbow announced Thursday they will move forward with an effort to leave the San Diego County Water Authority and join the Eastern Municipal Water District in southwest Riverside County.
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.
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.
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.
The Water News Network is San Diego County’s source for water news and information.
