Res 01-011RESOLUTION NO. 01-011
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF POWAY, CALIFORNIA, SUPPORTING LEGAL CLARIFICATION OF
PREFERENTIAL RIGHTS UNDER SECTION 135 OF THE METROPOLITAN WATER
DISTRICT ACT
WHEREAS, the San Diego County Water Authority ("Water Authority") provides
wholesale water service to 23 member public agencies in the San Diego region; and
WHEREAS, the Water Authority has responsibility to provide imported water
supplies to meet the needs of the region's $103 billion economy and to sustain the
quality of life of the region's nearly 3 million people; and
WHEREAS, the City of Poway depends and relies upon the Water Authority to
provide all or a substantial portion of its water supply needs; and
WHEREAS, the Water Authority is a member agency of the Metropolitan Water
District of Southern California ("MWD") and is currently dependent on it for all of the
water supply it imports to serve the needs of the Water Authority's own members,
including the City of San Diego; and
WHEREAS, for over fifty years MWD has promised, assured, and represented to
the Water Authority and the public it serves, that it would provide them with sufficient
water to meet their stated needs; and
WHEREAS, in good faith reliance on MWD's past assurances, the Water
Authority expanded its territory, built public works, and made its own assurances that it
would provide the San Diego region with a reliable supply of water; and
WHEREAS, the City of Poway has relied upon the assurances of a continuing
and reliable water supply from the Water Authority and MWD for the adoption and
implementation of a comprehensive, long-term general plan for the development of its
community; and
WHEREAS, MWD was created under the Metropolitan Water District Act ("the
MWD Act"); and
WHEREAS, Section 135 of the MWD Act establishes a "preferential right" to
MWD's water supplies for each of MWD's 26 member agencies based on each
agency's payment of MWD's capital costs and operating expenses; and
Resolution No.01-0~.l
Page 2
WHEREAS, as currently interpreted and applied by MWD, a member agency's
preferential right to water under Section 135 bears no relationship to its payment of
MWD's capital costs and operating expense or to its stated water needs; and
WHEREAS, MWD's interpretation and application of Section 135 is inconsistent
with its own promises, assurances, and representations to provide water to meet the
Water Authority's stated needs; and
WHEREAS, through June 30, 2000, the Water Authority has paid MWD nearly
$3 billion to pay the capital costs and operating expense of MWD water works,
representing twenty-two percent (22%) of all member agencies' total historical
payments to MWD; and
WHEREAS, of this amount, only $514 million is counted by MWD in its
calculation of the Water Authority's preferential right under section 135, resulting in an
entitlement to less than fifteen percent (15%) of MWD's water supply; and
WHEREAS, this calculation leaves the Water Authority with a preferential right to
less than one-half of the water supply it purchases, year in and year out, from MWD - a
shortfall of about 300,000-acre feet of water; and
WHEREAS, by way of contrast through June 30, 2000, the City of Los Angeles
has paid MWD approximately $1.6 billion to pay capital costs and operating expense of
MWD water works, representing twelve percent (12%) of all member agencies' total
historical payments to MWD; and
WHEREAS, of this amount, $792 million is counted by MWD in its calculation of
Los Angeles' preferential right under Section 135, resulting in an entitlement to more
than twenty-two percent (22%) of MWD's water supply; and
WHEREAS, this calculation leaves the City of Los Angeles with a preferential
right to about two times as much water as its regular water purchases from MWD; and
WHEREAS, the City of Los Angeles claims that its right to purchase water from
MWD is governed by Section 135 as currently interpreted and applied by MWD, and
may be exercised at any time, in the sole discretion of the City of Los Angeles,
notwithstanding the availability to it of alternative water supplies and irrespective of any
resulting reductions in supplies delivered to the Water Authority; and
WHEREAS, MWD's current revenue policies and programs allocate MWD's
capital costs and operating expenses as though Section 135 rights do not exist, thus
leaving the Water Authority with the obligation to pay the capital costs and operating
expense of water supplies that are subject to claims by the City of Los Angeles; and
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Page 3
WHEREAS, past payments by the Water Authority to MWD pale in comparison
to the future revenues and indebtedness that are projected to meet the water supply
demands of MWD member agencies, in excess of $4 billion over the next 20 years; and
WHEREAS, the Water Authority has made numerous efforts to resolve the
dispute over preferential rights through MWD board processes and committees,
mediations, and facilitations over the years, all without success; and
WHEREAS, the Water Authority has filed an action in the San Diego Superior
Court (Case No. GIC 761526), in an effort to finally resolve the controversy and achieve
certainty as to its MWD supply reliability and cost.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway
as follows:
1. The foregoing recitals are true and correct;
The City of Poway hereby expresses its support of the actions taken by the
San Diego County Water Authority to seek legal clarification of preferential
rights under Section 135 of the Metropolitan Water District Act;
3. The City of Poway hereby urges MWD, in the interest of fairness, to remain
neutral in this dispute between and among its member agencies;
4. The City Clerk shall send this resolution to the Water Authority and to MWD
for due consideration.
PASSED, ADOPTED, AND APPROVED by the City Council of the City of Poway
at the regular meeting this 20th day of March, 2001.
ATTEST:
L~i/~nne PeOples, City C~erk
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Page 4
STATE OF CALIFORNIA )
)
COUNTY OF SAN DIEGO )
SS,
I, Lori Anne Peoples, City Clerk of the City of Poway, do hereby certify under the
penalty of perjury, that the foregoing Resolution No. 01- 011 , was duly adopted by the
City Council at a meeting of said City Council held on the 20m day of March, 2001, and
that it was so adopted by the following vote:
AYES: EMERY, GOLDBY,
NOES: NONE
ABSTAIN: NONE
ABSENT: CAFAGNA
HIGGINSON, REXFORD
nne P~'oples, Cit~; Cie-ri[ -
City of Poway