HomeMy WebLinkAboutCC RESO 2001 - 44RESOLUTION NO. 2001— 44
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY
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 three million people; and
WHEREAS, the City of National City 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 National
City; and
WHEREAS, for over 50 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 National City 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 expense; and
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
Resolution No. 2001 —44
April 3, 2001
Page Two
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 the 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 (22%) of Metropolitans' 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 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 Los Angeles; and
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
Resolution No. 2001— 44
April 3, 2001
Page Three
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 TT RESOLVED by the City Council of the City of
National City as follows:
1. The foregoing recitals are true and correct;
2. The City of National City 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 Clerk shall send this resolution to the Water Authority and to MWD for
due consideration.
PASSED and ADOP 1'r;1.) this 3'l day of April, 2001.
George H. Waters, Mayor
ATTEST:
1Vfich. el R. Dalla, Ci r Clerk
APPROVED AS TO FORM:
George H. Biser, III
City Attorney