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FPUD asks LAFCO for consolidation; will seek another JPA partner
Thursday, March 20th, 2014
Issue 12, Volume 18.
A 4-0 FPUD board vote March 10, with Archie McPhee absent, approved the consolidation application which was delivered to LAFCO executive officer Mike Ott by FPUD general manager Brian Brady on March 11.
"I think there’s a general understanding that without the JPA structure or the (employee) leasing agreement, which also Rainbow has given notice to withdraw from that, it leaves little or no opportunity to continue the success that we accomplished in 2013," Brady said.
The North County Joint Powers Authority was created in February 2013 as a transitional structure to test the possibility of consolidating the Fallbrook and Rainbow districts, and the first JPA meeting was held on March 6, 2013. The functional consolidation allowed for the experience of combining tasks among the two districts while also creating the possibility that the districts could experience cost savings due to such sharing without governance consolidation. The joint powers agreement also included an employee leasing agreement which allowed FPUD and Rainbow to share employees, and the functional consolidation saved more than $1 million during the agreement’s first 11 months of existence.
In November the FPUD and Rainbow boards voted to begin the process of applying to LAFCO for an actual jurisdictional consolidation, but the boards of the two districts could not agree on the governance structure for the successor district. Each district currently has a five-member board, but FPUD elects its directors by seat with the entire district voting for each seat while Rainbow elects its directors by division with only voters in that division participating in that election.
The FPUD board initially proposed that the board members of the consolidated agency all be elected at large. At the February 5 North County JPA meeting FPUD’s representatives on the JPA board (which consists of three FPUD board members, three Rainbow board members, and an at-large member chosen by the rest of the board) 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. Rainbow’s board members rejected that proposal.
During Rainbow’s February 25 regular meeting director Helene Brazier provided a position which noted that functional consolidation was not necessary to achieve the benefits of sharing resources with neighboring water districts as is the case with the recent activity between Rainbow and the Valley Center Municipal Water District to coordinate pipelines. Brazier’s comments defined the proposed merger as absorption into FPUD and permanent minority status instead of a full partnership.
Rainbow’s February 25 board meeting also discussed the process of hiring a new general manager. Rainbow general manager Dave Seymour retired shortly after the creation of the JPA, and Brady also became Rainbow’s general manager. Brady is also the executive officer for the JPA. FPUD’s March 10 agenda also addressed the JPA’s conflict of interest code which covers incompatible offices and thus led Brady to resign as Rainbow’s general manager. The FPUD board expressed a desire for Brady to continue to work cooperatively with Rainbow’s new general manager. The Rainbow board is expected to name an interim general manager, if not a long-term general manager, at its March 25 board meeting although existing Rainbow policy makes assistant general manager Gene Buckley Rainbow’s acting general manager in the absence of the general manager so no Rainbow board vote was required to make Buckley the acting general manager upon Brady’s resignation.
The joint powers agreement allowed for a termination provision after one year, and on March 5 Rainbow’s board voted 4-1 with Dennis Sanford in opposition to terminate the joint powers agreement with FPUD. Rainbow board president George McManigle delivered the 30-day notice of termination to FPUD on March 6, so the JPA will be dissolved effectiveApril 5 unless FPUD obtains another partner.
The FPUD board responded by pursuing the merger unilaterally. "The Fallbrook board and the Rainbow board have been working through the JPA process and have decided on a number of things," Brady said. "It’s my sense that the Fallbrook board believed that as many issues had been settled as what was going to be, so they thought it would be appropriate to submit to LAFCO."
"I think that FPUD has acted irresponsibly," McManigle said. "Rainbow followed the spirit of the letter of the joint powers authority."
The Local Agency Formation Commission has an eight-member board consisting of two county supervisors (currently Bill Horn and Diane Jacob), one San Diego City Council member (currently Lorie Zapf), two city council members from the county’s other 17 incorporated cities (currently Sam Abed of Escondido and Jim Janney of Imperial Beach, two special district board members (currently John Ingalls of the Santa Fe Irrigation District and Bud Pocklington of the South Bay Irrigation District), and one public member (currently Rainbow Municipal Water District resident Andy Vanderlaan). LAFCO is responsible for handling jurisdictional boundary changes including annexations, consolidations, detachments, dissolutions, and city incorporations.
"I don’t see how it affects Rainbow at this time," McManigle said. "We have our own concerns."
Although the support of both agencies would not be required for LAFCO to process the consolidation request, input from the Rainbow board as well as input from Rainbow residents during the public hearing on the merger recommendation would be part of the process.
"The Rainbow board of directors has certain opportunities to weigh in on Fallbrook’s application," Brady said.
"Rainbow will act responsibly," McManigle said.
"We can also put an application into LAFCO with our own terms," McManigle said. "They defined their terms. We can define our terms. I’m not saying we’re going to, but there’s nothing to stop us from doing it."
If the LAFCO board approves the merger, sufficient petition signatures from residents of either district would trigger a public vote although the election would be for the two districts combined and the merger thus could be approved even if a majority vote from one of the districts opposes the merger.
The North County JPA held a special meeting March 13 to discuss Rainbow’s withdrawal from the JPA and the LAFCO application, although those items involved discussion rather than votes. "Neither one of them really resulted in anything other than discussion," Brady said.
"The fact of the matter is Rainbow sent notice that they were dropping out," McManigle said. "It was a waste of time to continue because nothing was going to change."
"On the second item there was a great deal of discussion on the fact that Fallbrook had decided to go ahead with the application on its own," Brady said. "It didn’t amount to any decisions or any vote or action."
The oral and written reports section of the March 13 agenda included director comments and reports; although the board cannot take official action board members can request that staff investigate a possibility and return to the board in the future for a possible vote. JPA president Milt Davies, who is on the FPUD board, gave Brady direction to seek another agency for the JPA to replace Rainbow.
"The Fallbrook board members emphasized that they would prefer to keep the JPA structure in effect and therefore they would be interested in finding another partner," Brady said.
In addition to FPUD and the Valley Center Municipal Water District, the Rainbow district borders the Vista Irrigation District and the San Marcos-based Vallecitos Water District. Rainbow also borders the City of Oceanside and the Eastern Municipal Water District in Riverside County. FPUD borders Rainbow, Camp Pendleton, and Riverside County’s Western Municipal Water District and Rancho California Water District.
The special meeting may not be the final North County JPA meeting even if the JPA is dissolved as of April 5. The board meets on the first Wednesday of the month, although the March 5 meeting was cancelled due to the lack of any agenda items. The next North County Joint Powers Authority meeting is scheduled for April 2.
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