Building Trust, Delivering Results

Letter from the Board Officers and General Manager

For the Water Authority, Fiscal Year 2025 was about building trust with our communities and delivering improved results for our region.

To achieve those goals, we had to stop doing things the way they have always been done.

In government, it can be all too easy to use the past as justification for the future. But we are living in extraordinary and unprecedented times for so many reasons — inflation, cost of living, climate whiplash, and the larger economic and social environment.

That means the status quo will not deliver the results we need to meet this moment.

So, in FY25, we stopped fighting yesterday's battles, and we started engaging with our partners to fight the inflationary pressures facing every resident and business.

With new leadership and a new perspective, the Water Authority focused on affordability, keeping the needs of working families at the forefront. Under our leadership, the Water Authority has taken every opportunity to reduce costs for ratepayers throughout the county while maintaining the water reliability that powers our economy.

The most significant achievement was concluding long-running litigation with the Metropolitan Water District of Southern California on June 2, 2025, after years of discussions. Ending the lengthy legal dispute provides greater cost certainty for San Diego County and ensures smaller, more predictable rate increases from MWD moving forward. It also opens the door to selling some of our region's unneeded water, which in turn will afford us greater control over rates.

In addition, settling litigation with MWD and other cost-saving measures reduced the 2026 wholesale water rate increase to 8.3%, less than half of what was forecasted. We left no stone unturned to find savings through creativity, compromise, and challenging the status quo to lessen the impact on residents and businesses across the region.

For a second consecutive year, the Water Authority also entered into a collaborative agreement with our partner water agencies to leave water in Lake Mead, stabilizing a key source of drinking water for the Southwest and saving local ratepayers millions. And we advanced the complex process of executing additional water exchanges that will help open new markets for a portion of Water Authority supplies.

As part of our focus on affordability, the Board supported efforts to help low-income families pay their water bills at both the state and federal levels. It was one more step toward making the Water Authority a leader in the ongoing effort to protect hardworking families.

Because every dollar saved is a dollar that stays in the pockets of San Diegans — and that is the kind of result that builds trust in our communities.

Water Authority, MWD End Lengthy Legal Dispute

Signaling a new era of collaboration, the San Diego County Water Authority and the Metropolitan Water District of Southern California in June announced the settlement of a 15-year legal dispute over rates and the terms of an exchange agreement between the agencies.

At a news conference in San Diego, leaders from two of the state's largest water agencies hailed the conclusion of all pending litigation, highlighting their commitment to fostering greater teamwork on a range of issues that affect nearly 19 million Southern California residents. The settlement dismissed all pending appeals. It included provisions to reduce the potential for future litigation, improve certainty in budgeting, and increase flexibility in efficiently managing water supplies.

Starting in 2010, the Water Authority repeatedly challenged the price Metropolitan charged for transporting its water, with both sides winning important legal judgments over more than a decade.

Under the settlement, the Water Authority will pay a fixed price to Metropolitan for delivery of the exchange water, adjusted annually for inflation. The price is no longer tied to Metropolitan's rates, which was a source of dispute and litigation. In addition, the Water Authority is able to offer that water to other Metropolitan member agencies and to Metropolitan.

"This agreement will allow San Diego to take advantage of our past investments in diverse water supplies to benefit regional ratepayers while addressing water reliability challenges more broadly," Water Authority General Manager Dan Denham said. "We look forward to building on the foundation of collaboration laid today."