Tiny Water District Refuses to Pull Plug

A tiny South County water district refuses to die.

Serving just 70,000 customers, the Tri-Cities Municipal Water District has fought an uphill battle against the Local Agency Formation Commission, which has targeted the district as an unnecessary layer of government.

Last August, the commission acted to dissolve the district and allow the city of San Clemente to take over its operation.

The district’s efforts to change the commission’s mind failed.

So the district went to court, and last week Superior Court Commissioner F. Latimer Gould agreed with Tri-Cities’ argument and invalidated the commission’s decision when he issued a preliminary injunction halting the district’s dissolution.

A hearing on whether to make the injunction permanent will be held in six months.

It was a victory for Tri-Cities, said Jim Lawson, a member of the district’s elected board of directors. “As far as Tri-Cities is concerned . . . it’s business as usual,” he said.

Gould supported Tri-Cities’ argument that in the commission’s attempt to have San Clemente take over Tri-Cities, the commission failed to follow the law and protect $35 million in assets and $2.5 million in reserves held by Tri-Cities, according to Lawson.

Gould ruled: “By transferring Tri-Cities’ corporate powers to San Clemente in a proceeding which is not a consolidation, not the creation of a subsidiary district nor a merger, the commission acted outside of its legislative authorization in fashioning an improper ‘hybrid’ procedure.”

In addition, Gould said, the commission failed to handle property tax revenue exchanges. He also faulted the commission for not properly informing San Diego County of its action concerning Tri-Cities, whose service area includes the San Onofre Nuclear Generating Station and state parks in north San Diego County.

Michael W. Parness, city manager of San Clemente, which was a defendant in Tri-Cities’ lawsuit, said that a meeting was held after Gould’s ruling with representatives from county government, the commission and city. But no decision was reached on finding a way to settle the dispute.

While Parness does not deny the city would like to absorb the water district, he said that the next procedural step “is up to LAFCO.”

He believes the commission intends to hold more meetings to decide whether to take a different approach to dissolving the district or discuss whether its action against Tri-Cities and other pending mergers could be flawed.

“We know that we have six months until a full hearing is held on the temporary injunction,” said Parness.

The commission’s decision marked the first time that a wholesale water agency was targeted for dissolution and its functions given to a city, in this case, San Clemente. About 16 other mergers and proposed dissolutions are pending before the commission.

Tri-Cities is fighting the takeover by San Clemente, arguing that a municipality shouldn’t have control over a regional water wholesaler. Instead, the 37-year-old district has asked that it be allowed to merge with the Municipal Water District of Orange County.

What effect the commissioner’s decision could have on the commission’s other merger attempts isn’t clear. The commission’s staff could not be reached for comment because the agency was closed for the holiday.