FOR IMMEDIATE RELEASE
DATE: 5/14/2026
After LAFCO votes 5-3 to suspend a critical Municipal Service Review for four years, Coastkeeper and coalition say residents deserve independent accountability on water costs
SAN DIEGO COUNTY, CALIFORNIA – San Diego Coastkeeper, backed by a broad coalition of water ratepayers throughout San Diego County, sent a formal request to the San Diego Local Agency Formation Commission (LAFCO), calling on the oversight agency to reverse its recent decision halting all work on a critical review of the region’s wholesale water providers.
On May 4, 2026, LAFCO voted 5-3 to suspend its Municipal Service Review (MSR) of both the San Diego County Water Authority (SDCWA) and the Metropolitan Water District of Southern California (MWD) for four years. LAFCO is an independent agency required by state law to serve as a watchdog for local governance issues, ensuring the efficient and sustainable delivery of public services, including potable water. It has the authority to audit, restructure, and even dissolve local agencies like SDCWA and MWD, which currently serve as the wholesale water providers for San Diego and all of Southern California.
MSRs are statutorily required independent evaluations that assess whether local agencies are delivering efficient, fiscally sound services to the communities they serve. They also provide an important opportunity for public and community input and discussion. LAFCO initiated this MSR after two member agencies (Fallbrook Public Utility District and Rainbow Municipal Water District) detached from SDCWA to secure lower wholesale water rates elsewhere, raising broader questions about SDCWA’s long-term financial sustainability and the viability of its current organizational structure.
The draft MSR presented at the May 4 hearing contained significant concerns about SDCWA’s finances and structure. It found that wholesale water rates had increased 164% over the past 15 years – more than triple the rate of inflation – driven by rigid take-or-pay supply contracts that failed to account for declining regional demand. As SDCWA has sold less water over time, it has continuously increased its rates per unit of water sold in order to pay down its hefty debt burden. LAFCO’s analysis warned that, absent meaningful reform, rates could rise by an additional 133% by 2035.
“The Commission’s decision to shelve this MSR is an abdication of LAFCO’s responsibilities to all water users in San Diego County,” said Patrick McDonough, Senior Staff Attorney for San Diego Coastkeeper. “As the MSR explains in detail, SDCWA is in dire straits, both financially and structurally, because it has failed to adapt to more efficient water use practices, continuously declining demand, and the development of new locally-controlled water supply like Pure Water San Diego. Now is the time for LAFCO to maintain close oversight to ensure SDCWA corrects course.”
The push to halt the MSR was raised by Commissioner Stephen Whitburn – who simultaneously serves on the San Diego City Council and the SDCWA Board of Directors – largely on the grounds that recent third-party water sales by SDCWA had made the review obsolete. While these third-party sales are a good step forward, they insufficiently address SDCWA’s financial strains, fail to correct its governance issues, and ignore the fact that San Diego County’s rate crisis demands continued oversight, not a four-year pause.
San Diego Coastkeeper is calling on LAFCO to rescind its vote, resume work on the MSR, update Part I to reflect SDCWA’s recent actions, and complete Part II covering MWD. Coastkeeper and its coalition partners contend that shelving this review leaves 3.1 million San Diego County residents without independent accountability on the agencies responsible for their water supply and rates.
The full draft MSR is available on the LAFCO website.
For more background, read Coastkeeper’s blog titled, “San Diego Ratepayers Deserved a Water Rate Review. LAFCO Voted to Stop It.”
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About San Diego Coastkeeper
San Diego Coastkeeper is a 501(c)(3) non-profit corporation founded in 1995 to protect and restore San Diego County’s bays, beaches, watersheds, and ocean for the people and wildlife that depend on them. Coastkeeper balances community outreach, education, science, advocacy, and legal enforcement to promote clean water stewardship and a healthy coastal ecosystem. For more information, visit www.sdcoastkeeper.org
Media Contact: Nicky Rosenberg, (608) 556-3793, [email protected]