Landmark victories in the Water Authority’s long-running legal cases against the Metropolitan Water District of Southern California were among the year’s most important achievements. They validated two decades of work by the Water Authority to protect ratepayers from overcharges by the Los Angeles-based agency.
The Water Authority also charted a bold course for the region by securing a multi-million-dollar grant to improve watershed management, producing a cutting-edge guide to sustainable landscapes and successfully guiding legislation in Sacramento to promote water-efficient choices for California.
The Water Authority’s vision for its diversified water supply portfolio was captured in a new series of videos documenting the region’s search for a safe and reliable water resources, and it was honored by one of San Diego County’s leading business organizations.
A final judgment in November affirmed sweeping victories by the Water Authority in landmark lawsuits filed in 2010 and 2012 that challenged rates set by MWD. Superior Court Judge Curtis E.A. Karnow invalidated MWD's unlawful transportation rates for 2011-2014, ordered MWD to pay the Water Authority $188.3 million in contract damages, plus interest, and directed MWD to set legal rates in the future. The judgment also ordered MWD to recalculate the Water Authority's statutory right to MWD water supply, a right MWD had illegally under-calculated for more than a decade. A ruling in March added $8.9 million in attorneys’ fees to MWD’s bill, capping an extraordinarily successful trial court campaign. The judgment was the largest plaintiff’s award in California in 2015. MWD appealed the rulings, and an appellate court ruling is expected in 2017.
By the Numbers: Rate Case Litigation
$188.3 MILLION Contract damages MWD owes the Water Authority$46.6 MILLION Prejudgment interest MWD owes the Water Authority$243+ MILLION Estimated total judgment for the Water Authority (including damages, costs, pre-judgment interest and attorneys’ fees)
$16.4 MILLION Estimated post-judgment interest per year until MWD pays what it owes$3.8 BILLION to $7 BILLION MWD Overcharges over 45 years2 Pending lawsuits by the Water Authority challenging MWD rates from 2015-2018
The Water Authority filed its fourth rate-case lawsuit against MWD in April, alleging that MWD’s rates for 2017 and 2018 violate California law, the state Constitution and common law that all require rates to be set based upon cost of service. The day before the lawsuit was filed, MWD’s Board of Directors set rates and charges for 2017 and 2018 using the same methodology from 2011-2014 that already had been ruled illegal in Superior Court. MWD’s overcharges for 2017 and 2018 are projected to be more than $134 million. If allowed to stand, MWD’s overcharges could exceed $7 billion over 45 years.
Rate Case Timeline
First Rate Case Filed:
Challenges MWD rates in 2011 & 2012
Second Rate Case Filed:
Challenges MWD rates in 2013 & 2014
Third Rate Case Filed:
Challenges MWD rates in 2015 & 2016
Final Judgment on
2011-2014 Rates: Water Authority prevails
Fourth Rate Case Filed:
Challenges MWD rates in 2017 & 2018
Appeals Process: 2010 & 2012 cases in First Appellate District
San Diego County stakeholders helped defeat a damaging proposal by MWD in April, when MWD’s Board of Directors rejected a proposed rate-increase scheme that would have hiked the San Diego region’s water treatment cost in 2017 by 77 percent through the imposition of a new fixed charge. Dozens of business and civic leaders from San Diego County wrote to MWD’s board or joined the Water Authority at MWD’s board meeting in Los Angeles to demand fair and legal rates, transparency and prudent fiscal practices. MWD’s board voted to retain its existing practice for assessing the costs of water treatment while continuing to assess new methodologies.
The state Department of Water Resources in January awarded $31.1 million in Integrated Regional Water Management grant funding to support 13 high-priority water projects in the San Diego region. The projects will help achieve goals in the Water Authority’s Urban Water Management Plan for conservation, recycled water, local surface water and groundwater. The Water Authority submitted the state grant application on behalf of its partners in the Regional Water Management Group (the City of San Diego and the County of San Diego) and will administer the funds. As part of the package, the Water Authority received $3.8 million for a regional drought response program, which includes retrofitting a correctional facility with water-efficient fixtures, expanding the WaterSmart Landscape Makeover Program, expanding the Sustainable Landscapes Program and additional drought education, outreach and conservation activities.
The Water Authority’s long-running efforts to promote prudent drought management policies in Sacramento got a huge boost in November and December from civic leaders, Citizens Water Academy alumni and others. Residents from across the region successfully petitioned the State Water Resources Control Board to adopt policies that acknowledged investments in drought-resilient water supplies and incentivized additional investments in supply reliability. Of the 248 letters and emails submitted statewide, 169 were from San Diego County – a testament to the region’s commitment to sound water management.
An engaging documentary series, “To Quench a Thirst,” was released by the Water Authority in June, highlighting the major events in the San Diego region’s ongoing quest for safe and reliable water supplies. The three-part series provides a compelling, 13-minute overview that chronicles the search for water in the county from indigenous people through modern times. The documentary series is based on the book “To Quench a Thirst: A Brief History of Water in the San Diego Region,” published by the Water Authority in 2002 and updated in 2013.
The Water Authority and its partners in the Sustainable Landscapes Program reached a major milestone with the publication of the “Sustainable Landscape Guidelines” in late 2015. The 71-page document culminated a comprehensive research effort to identify best practices for urban landscaping and applicable regulations. It provides a holistic, watershed-based approach to landscape design, installation and maintenance that boosts water-use efficiency and stormwater management. The Water Authority serves as the lead agency for the program. Its partners are the Association of Compost Producers, California American Water, the City of San Diego, the County of San Diego, and Surfrider Foundation.
The Water Authority was honored during Earth Day festivities in April by the Industrial Environmental Association and the County of San Diego for its successful long-term strategy to diversify the region’s water sources and reduce dependence on imported water. Board Chair Mark Weston accepted the recognition on behalf of the Water Authority. He also presented the keynote address at the VIP Earth Day Awards Luncheon, where he discussed the Water Authority's supply diversification strategy and congratulated local businesses for their water-saving efforts.
Gov. Jerry Brown signed three bills sponsored by the Water Authority during the year. Assembly Bill 349 by Assemblymember Lorena Gonzalez of San Diego prohibits common interest developments (typically governed by homeowner associations, or HOAs) from banning artificial turf. The Water Authority also sponsored AB 149 by Assemblymember Rocky Chavez of Oceanside to improve reporting of water-use data in urban water management plans. The third successful piece of legislation was Senate Bill 208 by Sen. Ricardo Lara of Los Angeles. It streamlined the process by which nonprofits and disadvantaged communities can receive funding advances under the state’s Integrated Regional Water Management Program.
The Water Authority’s Legislative Roundtable in October featured Assemblymember Toni Atkins, the Speaker of the Assembly at the time. Speaker Atkins met with Water Authority Board members, staff, member agency officials and community leaders to talk about water-related topics and legislation affecting the county and state. In June, the Water Authority hosted Assemblymember Brian Jones and Assemblymember Marie Waldron for another roundtable. The meetings were part of the Water Authority’s long-running Legislative Roundtable series, designed to enhance discussions about critical water issues.
In March, the Water Authority launched the Imperial-San Diego Currents website to address water issues related to the Colorado River Quantification Settlement Agreement of 2003 and promote interaction with Imperial Valley residents. The site includes news, features, reports and an interactive Q&A section to promote dialogue and solutions.