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IMPASSE: FPUD, Rainbow boards reach sticking point on governance structure

Friday, February 21st, 2014
Issue 08, Volume 18.
Joe Naiman
Village News Correspondent

The proposed merger between the Fallbrook Public Utility District and the Rainbow Municipal Water District has encountered the obstacle of the governance structure for the successor district.

FPUD, which elects its directors by seat with the entire district voting for each seat, has proposed a hybrid of at-large and by-division board members. Rainbow, which elects its directors by division with only voters in that division participating in the choice, is not willing to yield from its desire to have the successor district's board elected by divisions.

"It's basically at an impasse right now," said Brian Brady, who is the general manager of both districts and the executive officer of the North County Joint Powers Authority which is comprised of the two districts. "It's the sticking point between the two boards."

The boards have agreed that the consolidated district would be called the North County Public Utility District and that the district would be a public utility district, as is the case for FPUD, rather than a municipal water district, which is Rainbow's status. Each district currently has a five-member board. The North County JPA board consists of seven members: three from each district and an at-large member (currently Charley Wolk) chosen by the rest of the board.

The North County JPA was created as a transitional structure in February 2013 to Advertisement
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test the possibility of consolidating the Fallbrook and Rainbow districts. The functional consolidation has allowed for the experience of combining tasks

among the two districts without a jurisdictional consolidation while also creating the possibility that the districts could experience cost savings due to such sharing without governance consolidation.

The Feb. 5 JPA board meeting which failed to resolve the governance difference indicated that the functional consolidation has saved more than $1 million in its 11 months of existence; approximately 80 percent of those savings have accrued to the Rainbow district while FPUD was the beneficiary of the other 20 percent of the cost savings.

The FPUD board initially proposed that the board members of the consolidated agency all be elected at large. On Feb. 5, FPUD's representatives on the JPA put forth a compromise proposal in which four directors would be elected by division and three directors would be elected at large. Such a format would provide board representation for residents of each of the four divisions while also ensuring that a majority of the board would be accountable to all of the district's residents. "The Fallbrook board thought they were meeting the Rainbow board halfway," Brady said. Rainbow's board members rejected that FPUD proposal. "The Rainbow board is holding firm on the concept of division," Brady said.



Comment Profile ImageLee
Comment #1 | Friday, Feb 21, 2014 at 5:04 pm
My dear fellow Fallbrookers, "governance structure" is code for how to divide the income pie among the board members. Show me the money, baby.
Comment Profile Imagecoalcracker
Comment #2 | Friday, Feb 21, 2014 at 5:35 pm
The only outcome we should expect from this merger is increased water bills.
Comment Profile Imageoldtimer
Comment #3 | Friday, Feb 21, 2014 at 9:28 pm
Governance structure is about who has control and who elects them. Fallbrook will have the majority no matter what. They have more people. Majority rules. Fallbrook's plan would let all the directors come from the same area. They could all live on the same street. Rainbow requires directors to live in the area they represent.

Follow the money. In an interview in The Village News edition of October 18, 2012, a candidate for the FPUD board said of consolidation, "...On the surface it could mean a revenue stream to FPUD from the consolidation by using our management team to help run the two organizations....We could sell or store more reclaimed water to the Rainbow area and its customers... We are shipping more of it to the ocean than we are selling, and this would increase our revenues to FPUD....". Well, maybe Rainbow's avocado growers don't want it, either because it is not good for their trees.

RMWD is a growing district with new sources of revenue to come from serving the planned developments east of I-15. It already earns more money every year than FPUD with fewer customers. FPUD is pretty much built out and boxed in. It has expensive critical infrastructure work needing to be done and no obvious sources of new income, except for what it can get by running Rainbow. Rainbow has already cut jobs and hired FPUD to do the work those people did. Follow the money running from Rainbow's customers to Fallbrook's.

That's pretty strong motivation for taking over RMWD. It will control Rainbow which will serve FPUD's needs.

How do you like that prospect, Rainbow customers? Rainbow customers already have to go to FPUD's office to pay bills in person or speak face to face with customer service.

Don 't believe the rumors that Rainbow is going bankrupt. It isn't. Or that the cost of water will go down after a merger. It won't. Suppliers raise prices every year and both water districts pass on those increases.
Comment Profile Image2222
Comment #4 | Friday, Feb 21, 2014 at 11:57 pm
Oldtimer sounds like your a RMWD employee. Maybe your not happy that your GM is gone and all those fat raises wont be coming your way. Well you could be a board member who thrives on any kind of power and has nothing else better to do but complain. Move out of the way oldtimer.
Comment Profile ImageLee
Comment #5 | Saturday, Feb 22, 2014 at 4:11 pm
Let us hope that the board members of this new water district will not pay themselves such lavish salaries/bonuses/pensions, etc. as what Rainbow's board did.
Comment Profile Image111
Comment #6 | Saturday, Feb 22, 2014 at 11:35 pm
Thank you oldtimer for telling the truth. RMWD is doing just fine and FPUD wants what they have. I believe Brian Brady just wants money and power. This article was very one sided. I support our RMWD board and the decision that needs to be made at Tuesdays board meeting, please join us at 1:00pm to support the RMWD.
Comment Profile ImageRMWD ratepayer
Comment #7 | Sunday, Feb 23, 2014 at 12:43 am

Rainbow's Board members get the same per diems as FPUD's... and no bonuses, pensions, benefits or salaries.

2222...move out of the way of what, the takeover? You must be a customer of FPUD. Sounds about right. Let Rainbow work to get new customers from development and then let FPUD take over and manage the money for their benefit. FPUD is the past, Rainbow is the future.
Comment Profile ImagePink
Comment #8 | Sunday, Feb 23, 2014 at 1:42 pm
As usual Lee did not even bother to find out what "lavish salaries, pensions or bonuses" the board members of RMWD make before shooting off his mouth. Homework was obviously never enforced in his home, since he never does his homework before making ridiculous statements.
Comment Profile ImageFedUpWithRainbow
Comment #9 | Sunday, Feb 23, 2014 at 2:52 pm
I'll stand behind whomever will switch our street to city sewage from this septic tank life we live! For crying out loud... Rainbow charges us $94 a month BEFORE one drop of water is used. City sewage is only 364 feet from our house. Same with natural gas from SDG&E. If they want the public behind them on any issue, one of them needs to step up and address OUR issues!
Comment Profile ImageRuth Noyes
Comment #10 | Sunday, Feb 23, 2014 at 6:45 pm
So when someone makes an intellectual point which others disagree with, like Oldtimer's comment, people like 2222 just make assumptions without providing facts such as Oldtimer did and the most intelligent response is for Oldtimer to just move out of the way? Wow. Thank you Oldtimer for adding to the facts. The FPUD Board acts as if they work for FPUD instead of representing us, the public. It is a shame. As to the article, it was well written to discuss the matter at hand, not to cover other issues and I appreciate the precise information provided. That being said, commentator 111, perhaps we, the public, should have a meeting without the Board, to decide what we are going to do about this mess known as FPUD.
Comment Profile ImageJoe Naiman
Comment #11 | Monday, Feb 24, 2014 at 10:28 am
RMWD ratepayer, I have no choice but to clarify your statement "Rainbow's board members get the same per diems as FPUD's" - and an upcoming Village News article will address that (Rainbow's board rejected a per diem increase request). The board members on the North County Joint Powers Authority receive the same $150 per diem amount regardless of whether they're on FPUD's board or Rainbow's board. Rainbow directors receive a per diem of $150 per meeting. FPUD's per diem policy has an annual escalation clause, so the 2013 and 2014 amounts are different, but both are less than $150.
Comment Profile ImageRMWD ratepayer
Comment #12 | Monday, Feb 24, 2014 at 11:46 am
Thank you, Mr. Naiman. What ARE FPUD's per diems, and what is the annual escalation? Is it a percentage or a fixed amount? When will it surpass $150?

RMWD has no escalation provision.The board must vote in open meeting on any change to the per diem amount.
Comment Profile ImageRToTheM
Comment #13 | Monday, Feb 24, 2014 at 4:17 pm
Dear Rainbow Ratepayers,

Please don't think that the FPUD Board has all of a sudden discovered the lost art of negotiation. Rainbow's Board SHOULD NOT agree to FPUD's proposal for split divisional/at-large representation. As soon as the merger is finished the 'new' Board can easily reverse course to an entire Board composed of 'at-large' representation. It is a simple majority vote to do so. When that happens the FPUD takeover of RMWD will be complete and all of us in Rainbow and Bonsall will be shut out of any and all future decisions while all the money from rate increases and development will flow to Fallbrook.

To my Board Members at RMWD... Stand your ground!!!
Comment Profile ImageRMWD ratepayer
Comment #14 | Wednesday, Feb 26, 2014 at 10:38 am
Joe Naiman-

You say the FPUD per diems are not $150. What are they? Less that $150 could be $149.99!
And what about the escalation provision? How does that work?
Comment Profile ImageJoe Naiman
Comment #15 | Wednesday, Feb 26, 2014 at 10:42 pm
In 2013 FPUD's per diem was $115.76; the amount was raised to $121.55 for 2014.
Comment Profile ImageRate payer
Comment #16 | Thursday, Feb 27, 2014 at 10:48 am
I think that the "compromise" that has been offered is good! 4 divisions and 3 at large. RToTheM - the majority is division and they probably won't vote themselves out of the "pie". Fallbrook/rainbow community is small enough that we can all be represented. And besides, what if I don't like what is going on - I can talk to ANY at-large rep. If I don't like my division rep. I am stuck and therefore not really represented. Someone in my neighborhood will not provide an avenue for greater improvements for our neighborhood. This is ridiculous! As a RMWD payer I always thought that is was odd that there was 2 water districts in the area. Now is our chance to consolidate resources and work together. Form my understanding the finances will be kept separate anyway. Stop the fear mongering and false claims - that is what drives me crazy (and many others over the years) with the rainbow board. I don't know what else to say accept that the RWMD board isn't representing me anyway.....
Comment Profile Imageoldtimer
Comment #17 | Thursday, Feb 27, 2014 at 2:27 pm
Yes, there would be divisional accounting. But the majority...FPUD...would control how and on what Rainbow's assets would be spent, what projects were priority, and even what our water rates would be.

You can talk to any board Or you can go to the district and talk with an employee involved in whatever your issue

The scare mongers are those who have been repeating around the community that Rainbow was on the verge of bankruptcy. No. We are better off financially than FPUD. We bring in more money every year, we have made enormous infrastructure improvements (like covering 3 reservoirs and planning a water treatment plant for the other one), and our board and staff with the help of a citizen budget and finance committee have cut almost $2 million from our budget in the last three years.

We can and do work cooperatively with other districts without being taken over by them.

Article Comments are contributed by our readers, and do not necessarily reflect the views of The Fallbrook Village News staff. The name listed as the author for comments cannot be verified; Comment authors are not guaranteed to be who they claim they are.


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