The San Bernardino Local Agency Formation Commission may proceed with the proposed consolidation of two water districts, the Second District Court of Appeal has ruled. The court rejected the argument of one district that the proposed consolidation is not subject to the Cortese-Knox-Hertzberg Government Reorganization Act and that the consolidation is actually a dissolution.

The entities involved in the controversy are the San Bernardino Valley Water Conservation District and the much larger San Bernardino Valley Municipal Water District. The Water Conservation District covers 78 square miles in Highland, Redlands, Loma Linda, Colton, San Bernardino and unincorporated San Bernardino County. The district's primary responsibility is diverting water from the Santa Ana River and Mill Creek into percolation basins in order to recharge the groundwater aquifer, which is the primary water supply for the area. A seven-member board elected by districts governs the district.

The San Bernardino Valley Municipal Water District covers 352 square miles encompassing all or parts of nine cities and unincorporated territory in San Bernardino and Riverside counties. The district serves as a water wholesaler that imports water from the State Water Project and manages the groundwater basin. A five-member board elected by districts runs the district. The Water Conservation District lies entirely within the Municipal Water District.

In 2006, the Local Agency Formation Commission (LAFCO) board decided that because the districts provide similar services to the same area, the districts should be considered for consolidation. Late that year, the Municipal Water District submitted an application for consolidation. The Water Conservation District sued LAFCO to bar it from processing the application.

The City of Highland and environmental organizations oppose the consolidation because they say the move would jeopardize a proposed habitat conservation plan for the Upper Santa Ana River Wash. The Water Conservation District has sought increased rights to Santa Ana River water to provide for environmental needs in the habitat conservation plan area. A final environmental impact report on the district consolidation that was released earlier this year, however, concluded there would be no significant impacts resulting from the consolidation. A LAFCO study concluded the consolidation would save the Water Conservation District's taxpayers about $700,000 annually, a conclusion disputed by the district and environmentalists.

The lawsuit was moved to a neutral venue in Ventura County, where a Superior Court judge ruled LAFCO could proceed with the application. On appeal, the Ventura-based Second Appellate District, Division Six, upheld the lower court.

The Water Conservation District argued that because it was organized pursuant to the Water Conservation District Law of 1931, LAFCO could not proceed under the Cortese-Knox-Hertzberg Act to consolidate the districts. In a to-the-point opinion, however, Justice Paul Coffee noted that the Legislature repealed the 1931 law and incorporated the pertinent provisions into the District Reorganization Act of 1965, which created LAFCOs and served as the precursor to the Cortese-Knox-Hertzberg Act. Thus, the San Bernardino LAFCO has the authority to order the consolidation of the two districts "should it determine that such a consolidation is in the public interest," Coffee wrote.

The Water Conservation District argued that the proposal would prompt creation of a new successor district, which would not be possible because two districts already exist. The court rejected this interpretation.

The Water Conservation District's "contention ignores that the term ‘successor' is included in the statutory phrase. The creation of a ‘new successor district' necessarily implies the existence of multiple entities that become a single entity," Coffee wrote. It is up to LAFCO to decide which existing district will be the consolidated successor, the court ruled.

The proposal before LAFCO calls for the Municipal Water District to assume all of the Water Conservation District's duties, obligations and employees. The LAFCO board is scheduled to decide on the consolidation in July.

The Case:
San Bernardino Valley Water Conservation District v. Local Agency Formation Commission, No. B208974, 09 C.D.O.S. 4833. Filed March 23, 2009. Certified for publication April 22, 2009.

The Lawyers;
For the Water Conservation District: H. Jess Senecal, Lagerlof, Senecal, Gosny & Kruse, (626) 793-9400.
For LAFCO: Kendall MacVey, Best, Best & Krieger, (909) 686-1450.
For the San Bernardino Valley Municipal Water District: David Aladjem, Downy Brand, (916) 444-1000.