We pulled this post from the Politics Report.
I wrote several months ago about San Diego’s role in the sudden downfall of the Metropolitan Water District’s general manager, Adel Hagekhalil. A workplace discrimination complaint brought him down and, among many other points, that complaint, from the then CFO, referenced his deference to San Diego board members as fiscally reckless.
Hagekhalil had pushed the CFO to assume a complex water deal would soon infuse it with cash and allow it to pass along lower water rate increases to its agencies – agencies including the San Diego County Water Authority. San Diego representatives had insisted on this and Hagekhalil was listening. Water rates are soaring with no end in sight and this decision kept them from soaring even more.
Now he’s gone: This week, the board of the MWD decided to push him out officially after months of suspension. He appears ready to fight back but the interim general manager, Deven Upadhya, is now the actual general manager.
What about that water deal: The water deal on which MWD built its budget and rate structure was a complex transfer of water that San Diego had rights to. The federal government was going to subsidize the transfer resulting in millions to Met.
It’s the first baby step toward the future San Diego has been trying to build where all the Southern California water agencies form a market allowing them to sell water to each other. The agencies that have claim over more water than they need would be able to sell it to agencies that need water.
However, you may have heard, there’s a new president. And he has paused all sorts of federal funding efforts. Word is that the LA-San Diego-Imperial Valley water transfer deal may still go through, it just could take a while.
And about the legal fights: Hagekhalil, in his brief stint as one of the most powerful men in water in the world, was known for nothing more than his openness and willingness to work with San Diego water officials. We memorably hosted the moment where Hagekhalil and Daniel Denham, the general manager of the San Diego County Water Authority did a fist bump at Politifest in 2023.
Their hope was a quick resolution to the massive and complex litigation between the agencies most notably the dispute about how much MWD charged to move San Diego water.
So is Hagekhalil’s demise bad for a deal?
Denham told me not at all. It’s coming, he said, both boards have authorized him and Upadhya to make a deal.
“I’m very hopeful we can get a settlement within the next six months if not sooner,” Denham said.