The San Diego County Water Authority warned Wednesday that it could cost county water customers nearly $200 million over a decade if two rural districts detach from the authority.
In an email to county political leaders, Water Authority Board Chair Mel Katz said a proposed exit fee of $4.8 million a year for five years “isn’t close to covering the actual costs that will be shifted to residents elsewhere in the county.”
The Fallbrook Public Utility District and the Rainbow Municipal Water District are seeking to join the Eastern Municipal Water District in Riverside County in hopes of securing lower-cost water for farmers.
The Riverside district receives most of its water from the Colorado River Aqueduct and State Water Project and has not invested in expensive drought reliability projects like San Diego’s desalination plant and numerous recycling projects.
Katz said the two districts “are seeking to leave the San Diego County Water Authority without paying the full cost of investments made on their behalf over the past several decades.”
The districts’ request will be considered Monday by the San Diego Local Agency Formation Commission, and could then go to voters.
Katz said the commission’s staff recommended an exit fee “based on years-old data and questionable projections that understate the actual costs of detachment by at least 50%.”
“We encourage the LAFCO Commissioners to require Fallbrook and Rainbow to fully cover their costs,” he said.
But Jack Bebee, general manager of the Fallbrook district, challenged the water authority’s $200 million figure as “grossly inaccurate.”
“Not surprisingly, the Water Authority’s forecast — like its water demand projections and desalinated water cost estimates — is grossly inaccurate,” Bebee said. “San Diego LAFCO has done an independent review of previous SDCWA financial analysis and found them to be inaccurate.”
“The fact is, the impact will be offset by an exit fee for five years and after that would be minimal — around one dollar per household per month in the city of San Diego,” he said.
Bebee said it is the district’s legal right to secure less expensive water for agricultural users.
Updated at 12:10 p.m., Thursday, July 6, 2023