The San Diego County Water Authority’s board voted Thursday to drop a lawsuit the water seller filed in August against two of its customer water districts that are trying to leave and the agency that gave them permission to do so.
After a closed-door deliberation, the Water Authority publicly directed its lawyers to enter into a settlement agreement with Rainbow Municipal Water District, Fallbrook Public Utilities District and the Local Agency Formation Commission or LAFCO – the boundary referees that agreed to allow two of the Water Authority’s customers to divorce from their water seller.
“We’re working cooperatively to resolve litigation and move forward in accordance with the results of the election,” Jack Bebee, Fallbrook Public Utilities District’s general manager told Voice of San Diego.
Bebee and former general manager of Rainbow, Tom Kennedy, were at the helm of a three-year-long battle at LAFCO trying to detach from the Water Authority in search of cheaper water for their farming customers. Voters from each of these water districts overwhelmingly cast ballots in favor of leaving the Water Authority in November. The two districts now plan on joining and buying from another water wholesaler in Riverside County they anticipate will provide cheaper water rates.
“We saw that Rainbow and Fallbrook really wanted to leave. Over 95 percent of their voters said so,” said Mel Katz, chair of the Water Authority board, and a representative from Del Mar. “Our lawsuits were going to delay that for the next two years. It was time to shake hands and wish them well.”
The lawsuit was one of multiple ways the region’s water wholesaler tried to block Rainbow and Fallbrook from leaving the county in search of cheaper water for its farming customer base. The Water Authority also backed a new state law that would make it harder for any of its other water district customers to leave by requiring a countywide vote, instead of a vote of the divorcees’ customers.
Among the many allegations in the 360-page lawsuit, the Water Authority argued the Local Agency Formation Commission – a body that referees boundaries of special districts governing services like water and fire – didn’t properly study certain environmental impacts before authorizing the water divorce. Specifically, whether water buyers leaving one seller’s territory and joining another would put more pressure on fragile water supplies from melting snowpack in the Sierra Nevada mountains – also known as the State Water Project. It’s California’s largest water lifeline, serving more than half the state’s population as well as 750,000 acres of farmland.
But LAFCO has said that water district reorganizations of this kind are exempt from these sorts of environmental studies. As a result of the water divorce debate, LAFCO is also preparing to conduct a deep dive into the Water Authority’s finances and governance structure called a municipal service review.
Update: This post has been updated to include a quote from Mel Katz, chair of the Water Authority board.