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FPUD board requests LAFCO expedite merger with Rainbow; wants RMWD dissolved
Tuesday, March 11th, 2014
Issue 11, Volume 18.
FALLBROOK – After a year of working with Rainbow Municipal Water District toward a cost-saving merger, which fell apart last week when Rainbow board members asked to withdraw, the Fallbrook Public Utility Districtís board of directors voted yesterday to request that LAFCO move forward and promptly merge the two districts anyway.
FPUD will be delivering the formal request to LAFCO today.
LAFCO, the Local Agency Formation Commission, is the government agency that reviews and coordinates logical and timely changes in local governmental boundaries and mergers.
The reason for FPUDís request for a speedy review and merge is two-fold: Rainbowís withdrawal will become effective April 5, and the monetary savings were there. In just 11 months, FPUD and Rainbow have saved more than $1 million by working together, with $800,000 of that savings accruing to Rainbow and $200,000 to FPUD.
The two agencies had entered into an agreement – a "joint powers authority" (JPA) – that allowed them to share each otherís employees, resources and other assets. Similar to an engagement before a wedding, both districts had agreed to explore the merits of the sharing agreement for one year and then consider whether merging would be beneficial.
But even though the savings exceeded both agenciesí expectations, the Rainbow board voted last week to withdraw from the JPA because they could not agree with FPUD on how to govern the new agency and elect new board members.
FPUD elects its five directors "at large," meaning anyone in the entire district can run, and vote for, each seat.
Rainbow, on the other hand, elects its five directors by division, and only voters living in that division can run, and vote for, a seat on the board.
Rainbow held firm and was not willing to yield from its desire to have the new districtís board elected by divisions. The new districtís board would have seven seats and the FPUD board initially proposed that the board members of the merged agency all be elected at large, thenFPUD suggested a compromise in which four directors would be elected by division and three would be elected at large.
"The FPUD board thought they were meeting the Rainbow board halfway, but Rainbow held firm and the two agencies were basically at an impasse," said Brian Brady who is the general manager of FPUD and had also been the general manager of Rainbow since April 2013. "This is a loss for both districts. The savings we achieved will go away as Rainbow and FPUD separate."
The option of having all board members elected by division is not permitted under the Public Utility District Act. Since the two districts had agreed that the newly merged district would be a Public Utility District, they would then operate under that act.
Now Rainbow will have to hire its own general manager with the dissolution of the JPA. In addition, the engineering and customer service departments, which had been working together for both districts out of the FPUD office, will also have to be separated.
FPUD is requesting the two agencies be reorganized into one – that LAFCO review and dissolve the Rainbow Municipal Water District and annex its territory into the Fallbrook Public Utility Districtís. If approved, the new district would then be an expanded Fallbrook Public Utility District.
Upon receipt of FPUDís request, LAFCO will review the extensive documentation provided by both districts of the year-long sharing agreement, savings and potential benefits. Then based on the merits of the information provided, LAFCO will decide whether to merge the two districts.
"We owe it to both Fallbrook and Rainbow ratepayers to pursue this integration since it is ultimately a savings – a big one – to all customers," Brady said.
The JPA agreement allowed them to consolidate jobs, not by layoffs, but by not filling job openings as they developed when employees quit or retired. Other benefits included sharing equipment and reducing vehicle fleet and heavy /specialty equipment, improving emergency response, reduction in property and liability insurance and a host of other benefits. A merger would produce even more savings.
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