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San Diego wages a different kind of water battle over costs

While battling the drought, San Diego County is also fighting a water payment deal it says is unfair

Nature provided many bounties for the San Diego area — among them beaches, mountains, a mild climate, grassy valleys and a natural harbor.

But it failed to provide that thing most essential to life: water. With precious little groundwater, the region has a history marked by a desperate hunt for its own supply.

By the mid-1940s, with San Diego established as a major military fortress, the federal government forced the San Diego County Water Authority to join the Metropolitan Water District of Southern California, the region's water wholesaler.

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FOR THE RECORD:

Water dispute: In the April 6 California section, a photo caption accompanying an article about a lawsuit pitting the San Diego Water Authority against the Metropolitan Water District of Southern California erred in describing the organizations' dealings. The San Diego authority draws about 50% of its water from the MWD, not from the Imperial Irrigation District. A second caption said that San Diego County has received water managed by the MWD for "more than a decade." In fact, as the article noted, the San Diego authority joined MWD in the mid- 1940s. —
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The shotgun marriage has not always been a happy one, starting with San Diego's annoyance at being dependent on a Los Angeles-based entity.

The water authority has been MWD's biggest and most disgruntled customer. Although it has been pushed out of recent headlines by the drought, the feud between San Diego and MWD is now on full display in San Francisco Superior Court.

As Gov. Jerry Brown last week was assessing the paltry snowfall and proclaiming a hydrological emergency, a San Francisco judge was hearing opposing sides in a bitterly contested lawsuit filed by the San Diego authority against MWD.

Though the four-year drought could be fixed by sufficient rain and snowfall, the San Diego-MWD contretemps shows that many water problems linger — in wet years and dry — for decades and are left to lawyers and judges, with opposing sides reluctant to compromise or drop long-standing grievances.

Water officials in San Diego are convinced that MWD is overcharging the county for water while simultaneously being ready to drastically cut water supplies to San Diego to keep Los Angeles wet and happy during shortages.

But San Diego officials believe that, at long last, their claims of maltreatment are close to being validated by the lawsuit, which involves lots of money and water and a possible realignment of how MWD sells water to six counties.

How much money is involved?

In the short run, it is approximately $200 million, which the authority believes is the amount that MWD has overcharged it since 2011 under a water sales agreement between the authority and the water-rich Imperial Irrigation District. Over the 45-year length of the deal, made in 2003, the amount would soar to more than $2 billion.

How much water are we talking about?

A lot. As part of its lawsuit, the San Diego County Water Authority complains that it is being shortchanged on its "preferential right" to water purchases.

Los Angeles was a founding member of MWD in the 1920s; San Diego joined only when forced to do so shortly after World War II. Los Angeles gets credit for the money it paid to start MWD. San Diego says it is unfair that it does not get equal credit for all the money it has paid for water.

How dependent is San Diego County on MWD?

In 1991, the county water authority bought 95% of its water from MWD. With the Imperial Irrigation District deal, that figure now is closer to 50% and will decline further when a desalination plant in Carlsbad is completed.

So if San Diego is drastically reducing its dependence on MWD, what's the beef?

The only way to get a share of the Imperial Irrigation District's allocation from the Colorado River is through an aqueduct and other plumbing owned by MWD.

The legal dispute involves the issue of whether MWD is charging too much for delivering that water.

San Diego asserts that MWD is lumping on all sorts of bogus charges. The lawsuit dives into the deepest arcana of water law; both sides have multiple lawyers from top firms.

"San Diego has long been the cash cow, the golden goose, for Metropolitan," said Dennis Cushman, assistant general manager of the San Diego County Water Authority. "MWD is doing everything possible to keep that cash cow, that golden goose, in its barn."

MWD officials declined to comment. But they point to their argument in court papers that San Diego agreed to the payment schedule as part of the deal with Imperial; in fact, San Diego even suggested it.

San Diego's response: Yes, we agreed to that payment schedule to net the controversial deal and we also promised not to sue for five years. Those five years are over and here's the lawsuit.

So who's winning in court?

A year ago, Judge Curtis E.A. Karnow sided with San Diego that MWD had violated provisions of Proposition 26, passed in 2010, that limits the amount that the government can charge for a service to the amount that it actually costs to render that service.

The second round of the lawsuit, which began last week, is over whether San Diego deserves a rebate and, if so, how much.

The preferential rights issue also will be debated. MWD argues that state law says the money used to buy water cannot be used to calculate preferential rights. MWD has never invoked preferential rights to "take" water from San Diego and give it to Los Angeles during a shortage.

If San Diego prevails on this point, it envisions being able to buy more water from MWD than the desalination plant will provide.

MWD has already vowed to appeal. In a different lawsuit filed by San Diego over the payments issue, the county prevailed in trial court in 1998 but MWD convinced the appellate court to overturn that decision two years later.

When will a final decision be rendered?

Karnow may have a decision on part two by June. After that, the appeals process could take months, maybe years. Welcome to water world.

tony.perry@latimes.com
Twitter: @LATsandiego

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