The San Diego County Water Authority has agreed to drop its lawsuit over the proposed departure of two North County water agencies, it was announced Thursday.
The lawsuit, filed earlier this year, challenged a decision by the San Diego Local Agency Formation Commission to allow the Rainbow Municipal Water District and Fallbrook Public Utility District to leave the water authority.
The recent settlement allows Rainbow and Fallbrook's water agencies to depart and includes a $25 million payment from both agencies, plus other costs and fees.
In its lawsuit, the water authority alleged that the move, which could allow Rainbow and Fallbrook to purchase cheaper water elsewhere, would shift millions in costs that would have been paid by the Rainbow and Fallbrook agencies to the rest of the county's service area.
SDCWA said in a statement that the settlement "avoids expensive litigation, provides institutional certainty, and minimizes rate impacts on San Diego County's 3.3 million residents."
SDCWA chairman Mel Katz said: "While the majority of SDCWA's remaining 22-district membership remains opposed to detachment, they agree that this settlement makes the best of a bad situation. While we continue to believe the detachment award should have been higher, RMWD and FPUD are required to pay all costs, above the amount ordered by the Local Agency Formation Commission in addition to its entire exit fee up front, meaning there will be no immediate rate impacts for ratepayers."
A new law set to go into effect on Jan. 1 will require similar detachment requests from local water districts to go to a countywide election for voter approval.
