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By Collin Breaux | Twitter: @collin_breaux

An annexation agreement that will transfer San Juan Capistrano’s water utilities over to the Santa Margarita Water District—a process years in the making—took yet another step towards becoming concrete after the Orange County Local Agency Formation Commission (LAFCO) approved the transfer during a meeting on Thursday, Aug. 19.

There will be a 30-day period to allow for community comments and protest. The official transition is anticipated to happen this fall.

Officials in San Juan and SMWD have said utilities are being transferred from the city’s purview and into a wider regional network because the city does not have the infrastructure to support providing water services—a responsibility SMWD is better equipped for because doing so is the district’s specialty.

The annexation area in San Juan includes 14 square miles and a little more than 36,000 residents. SMWD’s current service population is estimated at 165,000 people.

The coming annexation proposes to continue current service levels, improve infrastructure, stabilize utility rates, and enhance water reliability.

For the first transition year in Fiscal Year 2021-22, expenditures are expected to exceed revenues by $6.3 million, though that shortfall will be covered by reserve funds. Revenues and expenditures are then expected to stabilize in coming years, and revenues will be allocated for reserve funds.

Water utility rates are expected to increase over the next 10 years.

“We’re very excited to go forward,” SMWD General Manager Dan Ferons said. “We’ve got staffing in place ready to really hit the ground running.”

San Juan Mayor John Taylor said the annexation process was a long journey for the city, and that he was pleased LAFCO approved the agreement.

“After working with Santa Margarita board members and staff over the past two years, I could not be more impressed with their expertise, commitment to customer service, and innovative approach to improving our water supply and reliability,” Taylor said.

Transferring utilities to a regional system will allow the city to focus on core services such as public safety, parks, and roads, Taylor said.

LAFCO Commissioner and Orange County Fifth District Supervisor Lisa Bartlett said a long-term water supply has been a challenge for San Juan residents and businesses.

“We went through a very open, transparent, and accountable process with multiple vendors coming forth,” Bartlett said. “I think we have a great selection before us today with the Santa Margarita Water District.”

The city began considering moving utilities to a wider network in 2015.

Collin Breaux

Collin Breaux covers San Juan Capistrano and other South Orange County news as the City Editor for The Capistrano Dispatch. Before moving to California, he covered Hurricane Michael, politics and education in Panama City, Florida. He can be reached by email at

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