By Shawn Raymundo and Lillian Boyd

A preliminary court ruling issued this week places Moulton Niguel Water District on the hook for roughly $2 million in delinquent payments related to capital improvement and maintenance costs for a wastewater treatment facility at Aliso Creek.

The Riverside County Superior Court on Tuesday, Feb. 26, tentatively ruled that Moulton Niguel is responsible for paying its share of the bills toward the Coast Treatment Plant’s upkeep in Laguna Niguel until February 2030.

Moulton Niguel “is legally obligated to pay its proportional share of all costs, including capital costs and items, necessary to operate and maintain the Coastal Treatment Plant,” the tentative ruling states.

As members of a joint agreement with the South Orange County Wastewater Authority (SOCWA), Moulton Niguel, South Coast Water District, Emerald Bay Service District and the city of Laguna Beach are each required to pay a certain portion of costs to maintain the treatment plant.

Back in May 2017, SOCWA filed a lawsuit against Moulton Niguel, alleging that since July 2016, the agency had stopped making payments toward the upkeep of the facility, which serves several cities including Dana Point, Laguna Beach and parts of San Clemente and San Juan Capistrano.

“In all points that we brought forward for judgement, it was a clean sweep and it’s such a good decision and day for South Orange County taxpayers,” said Steve Greyshock, a spokesperson for the plaintiffs.

Greyshock added that SOCWA has an urgent need to make $12 million in repairs to the facility.

“If that project does not proceed, and it cannot proceed without the funds from Moulton Niguel or alternate sources, we risk some really bad consequences,” Greyshock said. ‘This plant is in an ecologically sensitive location … We cannot and will not accept failure for this plant.”

Moulton Niguel Assistant General Manager Matt Collings explained that Moulton Niguel doesn’t send any water to the treatment plant, so its customers don’t reap any benefits from the facility.

In November 2018, MNWD told Dana Point Times that the agency has been in a disadvantageous minority position in a project committee at SOCWA, where the other three committee members seek to force MNWD and its ratepayers to fund millions of dollars of capital projects at the Coastal Treatment Plant that MNWD doesn’t believe are necessary or are justified under the governing agreements.

“The central issue from the SOCWA lawsuit continues to be: the Coastal Treatment Plant is too big, too expensive and too burdensome, resulting in millions of dollars of subsidies by our customers who receive no benefit,” Moulton Niguel said in a prepared statement on the tentative ruling.

Moulton Niguel has argued that Laguna Beach, South Coast and Emerald Bay breached sections of the joint agreement including a stipulation that any capital improvement costs require unanimous consent among the members. Moulton Niguel has also noted that 43 percent of SOCWA’s budget comes from the water district.

The tentative ruling explains that back in June 2016, Moulton Niguel voted against the adoption of the SOCWA budget for fiscal year 2016-2017. It also explained that the agency proposed a weighted voting system in which a member agency’s vote would reflect its financial obligations.

Moulton Niguel “believed that the other member agencies of (the joint agreement) were placing their interests above that of MNWD in making decisions about the repair and replacement of components of the Coastal Treatment plant,” according to the tentative ruling.

The preliminary judgment also determined that Moulton Niguel’s contractual commitment would end Feb. 19, 2030, allowing it to withdraw from the agreement. According to the court, a 50-year agreement to construct and operate the Coastal Treatment Plant began on Feb. 19, 1980.

“Today’s decision supports our ongoing efforts to protect our ratepayers’ dollars and delivers our customers a win by establishing a February 19, 2030 end date to the agreement, thereby saving millions of dollars,” Moulton Niguel said in its press release.

According to Greyshock, Moulton Niguel is expected to contribute approximately another $25 million toward the facility’s improvements over the course of the joint agreement.

Collings said that a decision has not been yet as to whether Moulton Niguel will appeal the tentative ruling.

About The Author Capo Dispatch

comments (1)

  • “In retrospect, the San Juan City Council decision to negotiate with Santa Margarita Water District and NOT MNWD as their water utility successor agency is looking a lot smarter and as the SOCWA trial investigations (civil) plus audits/monitoring by Cal/EPA progress they’re going to look even brighter as MNWD’s superficial glossy image unravels.

    If MNWD is nuts enough (or has too much free time & customer’s hard earned money on its hands) to take this to trial there are other serious implications, counts of obstruction and suppression of evidence issues in Phase 2. This could lead to criminal and civil code indictments as over 70 boxes of files of possibly pertinent files were allegedly destroyed (“spoliation”) in late 2016-17, video files of hearings tampered with/edited by MNWD IT Dept., and MNWD failed to produce their most knowledgeable Board member for deposition. These are embedded in the RivCo Judge’s tentative ruling, anyone wanting a copy can contact me.

    One need not look beyond the present General Manager’s tour of duty these past 6-7 years. They’ve obviously cut corners to pay for a bloated hence expensive employee payroll/benefits packages, a staff that’s increased 50% during her tenure. Now they’re trying to put a “happy face” emoji onto an increasingly disturbing picture of their methodology. Days of reckoning are well nigh ahead!

    My NGO, Clean Water Now, has been tracking Aliso Creek for 21 years…our database reveals that MNWD admittedly has the greatest yearly water losses among ALL South OC utilities and has for at least the past 5 years. This was sustained by MNWD at its February 19, 2019 Board meeting. Water that their customers didn’t pay for directly but will be forced to cover, buried by management in their rates.

    Approximately 1 in 9 gallons “disappears” once in their local system, going somewhere subsurface (groundwater table?), so it’s no quantum leap to be alarmed. MNWD’s water loss rate of 11% is more than double that of Santa Margarita, 5 times the rate by South Coast.

    Must be a lot of leaky, compromised arterial feed pipes, maybe old meters needing replacement, etc., MNWD acknowledged at that February 19th Board meeting to “losing” 2900 acre feet per year (a whopping 1 billion gallons, 3-4 mgd), which is over $3+ million worth of an obviously precious resource they’re entrusted to distribute and in reality are wasting. This is in violation of MS4 Permits + Cal Constitution Water Codes (Article 10, §2).

    Environmentalists, public agencies and hydrology consultants all seem to accept the fact that during dry, non-rainy weather, Aliso Creek has approximately 3-4 million gallons/day of excess runoff, originating from human sources.

    This week, CWN filed an additional formal complaint with the SD Regional Water Quality Control Board (Cal/EPA), we allege that the 3-4 mgd that MNWD is “losing” is in fact the surplus, draining into the area’s lowest point: Aliso Creek. We believe that it’s no coincidence that the volumes MNWD seems to unable to source-track and reduce/eliminate and subsequent burdening of the Creek, beyond natural drainage, are directly correlated. The smoking gun.

    Our previous complaint was about MNWD’s dilapidated sewer and stormwater system, related treatment plant destination problems:
    Last summer Clean Water Now successfully petitioned the SD Water Board to open an investigation into a 124,000 sewage spill caused by MNWD out near Lake Laguna Niguel. That wastewater went into Sulphur Creek & the Lake, where people fish and take their catches home for consumption.

    Staff in SD began ramping up their intense oversight back in late 2018 due to CWN’s formal complaints that provided them with corroborating, detailed adverse environmental impact assessments. Part of Cal/EPA, the SD staff has been investigating MNWD’s lengthy history of lapses/failures regarding their waste and stormwater collection systems, their culpability and probable Assessed Civil Liability ($$$ exposure/fine) that could add not only a few hundred thousand $$$ but other serious forms of rebukes by the State.

    Staff time by the State must be paid to recoup/compensate expenditures plus all of MNWD’s staff and legal team internal costs also mean that MNWD is literally in arterial image bleeding mode, not to mention humungous $$$ going out the door due to poor management.

    Yesterday, 3/01/2019, San Diego staff sent an email, confirmed that their investigation is STILL ongoing, continues to expand due to the additional information that CWN has provided: All of that recon was in fact buried in MNWD’s own publicly available database. Just needed a little digging and daylight.

    These types of fiduciary failures, under-performing, substandard asset management, should have consequences, instead of blowing money litigating fellow members they should be ramping up the repairs, replacements, upgrades and rehabilitation of their crumbling, antiquated delivery system. It’s already known by EPA and the SOC water industry that their wastewater collection system is fatally flawed, also in desperate need of repair.

    Where is all of MNWD $$$ going? Inflated employee salaries, retirement packages and Board member benefits?

    MNWD keeps pointing towards the shelf with their award-winning meta and granular data-gathering, but that’s a distraction, avoids simple facts, failing in the basics, at a ground zero “Utility 101” level. Hopefully the EPA investigation we’re petitioning for will result in significant sanctions, including fines, and force this District to pay more attention to its regulatory compliance responsibilities, public health and safety, plus customers and less towards winning a few trophies.

    Roger E. Bütow Founder & Executive Director
    Clean Water Now

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