The San Diego County Local Area Formation Commission took a major step Monday toward allowing two rural water districts to leave the jurisdiction of the county Water Authority -- by leaving the matter in the hands of the voters.
The move was a result of two public meetings -- the first was held June 5 and public comment and discussion carried over to Monday -- and will allow ratepayers in the Fallbrook Public Utility District and the Rainbow Municipal Water District to decide in an election whether to stay in the county water authority or leave and begin purchasing water from the Eastern Municipal Water District.
"We are grateful to the LAFCO commissioners for their support of our effort to change water suppliers, which will bring much-needed relief to our ratepayers, including our agricultural users, who have been burdened for years by skyrocketing water costs from the County Water Authority," said Jack Bebee, general manager of the Fallbrook Public Utility District.
The election is likely to be scheduled next year.
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If voters approve the change, the districts would be allowed to pay a fee to leave the 24-member water authority. This would potentially lower the cost of wholesale water for the two rural districts, but is not without its share of debate.
"Today's unprecedented decision by San Diego LAFCO is very disappointing because it will raise water rates for disadvantaged communities, working families, 70% of agriculture in the county, small businesses and everyone else across our region," said Mel Katz, chair of the San Diego County Water Authority's Board of Directors. "We're deeply concerned that LAFCO decided that water ratepayers across San Diego County don't get a say in whether Fallbrook and Rainbow can walk away from their bills and shift their costs to the rest of the county.
"It's also clear that LAFCO failed to study the environmental impacts of its decision, as required by state law -- a serious breach of public confidence in a system that's supposed to protect us all," Katz said.
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The water authority's rates have increased in recent years, with recent proposed increases in wholesale water rates due to "extraordinary inflationary pressures and depressed water sales," according to a statement from the authority. These increased rates would impact agricultural districts like Fallbrook and Rainbow as well as more urban districts, which would have to shoulder more of the burden of expensive infrastructure projects and maintenance should the two districts elect to leave, according to the authority.
"This is the most challenging budget cycle I've seen in more than three decades of public service leadership," Water Authority General Manager Sandra L. Kerl said last month. "The headwinds were strong from the start, and they only got stronger over the past three months, with unexpectedly large energy bills driving up costs and the persistence of highly unusual wet weather that has depressed water sales."
Kerl said the authority has taken budget- and rate-control measures for the past several years, leaving fewer options this year. Those actions have included front-loading savings on debt-refinancings.
According to the agency, while it sets rates annually to address changing conditions, the Water Authority's budgets span two fiscal years. The recommended $1.8 billion budget for fiscal years 2024 and 2025 is up 5% from the current budget "due to higher costs for water, treatment and infrastructure maintenance."
Around 90% of the Water Authority's recommended budget is for buying and treating and delivering water, combined with debt service and infrastructure projects to ensure water is available when and where it's needed.
A public agency created in 1944, the Water Authority delivers wholesale water supplies to 24 retail water providers, including cities, special districts and a military base.
