Posts

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

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.