Agency Asked to Rethink Water District Decision

A state agency has been asked to reconsider its decision to dissolve the small Tri-Cities Water District in South County and turn over much of its assets to the city of San Clemente.

The Tri-Cities board of directors contends the dissolution vote was illegal and that the water agency should be merged instead with the Municipal Water Districts of Orange County.

The Local Agency Formation Commission, which ordered the district into extinction, will decide whether to reconsider its action on Sept. 22.

“The declared intent of LAFCO to have [Tri-Cities] cease to exist is meritorious,” Tri-Cities attorney Thomas L. Woodruff wrote to LAFCO members. “Unfortunately, the procedures selected by the applicants in this pending proceeding simply will not legally allow the end result to be accomplished.”

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Tri-Cities owns a regional pipeline and serves about 70,000 customers as an intermediary, selling water wholesale to local districts and San Clemente.

LAFCO Executive Officer Dana M. Smith disputed Woodruff’s legal interpretation. She said dissolving Tri-Cities into San Clemente, its largest municipal customer, is legal and practical.

Tri-Cities is the only truly duplicative water district in the county, according to LAFCO. It buys water that already has been purchased by Coastal Municipal Water District and then resells it to its customers.

“Everyone seems to be happy about this [dissolution] except the Tri-Cities board,” Smith said. “The board is stretching.”

Tri-Cities applied two years ago to consolidate with the Municipal Water Districts of Orange County but “no one took them up on their offer,” she said.

Under LAFCO’s Aug. 5 vote to dissolve the district, assets worth about $35 million would go to San Clemente, with about $2.5 million in reserves. Tri-Cities board members said the assets, paid for by the district’s regional customers, should stay in the hands of a regional water supplier, not a city--particularly one strapped for cash.

Tri-Cities directors also argue that a portion of the regional pipeline would have to be turned over to the county of San Diego--worth about $30 million--with a resulting loss of about $266,000 a year in property tax revenues from Tri-Cities customers in San Diego County.

LAFCO’s Smith said the assets would be distributed that way only if there were no other asset-distribution plan. The plan approved last month calls for San Clemente and the Moulton Niguel Water District to take over responsibility for the pipeline.

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A related agreement among San Clemente, the state parks department and Southern California Edison will allow water to be provided to San Onofre Nuclear Generating Station and the state park as before, she said.

The state law that created LAFCO’s authority over special districts specifically gives a nod to cities in determining who should operate community services, Smith said.

The Legislature found that “a single government agency rather than several limited purpose agencies is in many cases better able [to provide the] best mechanism for establishing community service priorities.”