San Diego Business Journal

The continuing saga of cures for our ever-present water shortages in the region has taken another confusing step. After a decade of permit hearings and lawsuits, Poseidon Resources began site preparation on the largest desalination water plant in the nation. Last week the work halted.

In order to complete the plant, a complicated set of contracts and financing documents had to be put in place. The first thing was for Poseidon to negotiate a subsidy of $250 an acre foot from The Metropolitan Water District of Southern California, or MWD, in Los Angeles. That was accomplished early on.

The second important step was selling the excess water the plant would produce each day to other local water agencies. That, too, was done some time ago. Then, as the site was being made ready for building, the importing water agency here, San Diego County Water Authority, or SDCWA, decided to sue the MWD over its water rates.

You guessed it — when the question of the subsidy came up as Poseidon began its search for the $530 million needed to build the plant, MWD said that they weren’t going to pay the subsidy to someone who was suing them, so the process hit yet another road block.

In order to get the process started again Poseidon had to convince the nine water agencies with whom they had contracts to forgo them and allow SDCWA to take them over, allowing the deal with the two water agencies to proceed.

On June 24, the staff of the SDCWA offered their board of directors three choices:

• A direct purchase agreement with Poseidon, with compensation to the SDCWA for the subsidy guarantee including property (and the plant);

• A combination grant/loan to the contracted agencies with real estate and other compensations provided to the SDCWA; and

• A combination grant/loan with guaranteed repayment.

This may seem like a small stumbling block weighed against the thousands of supporters of the Carlsbad desalination plant and the hundreds of hours of testimony that so many supporters have given for the plant to be approved.

More Water, Less Restrictions

The bottom line to this decade-long process is that the day the plant starts spewing out its water the shortage of water in the region will go down by about 10 percent. In other words, for residential users the water restrictions would not exist.

On June 25, the SDCWA board voted unanimously to authorize the water authority staff to negotiate the principles in option three above (combination grant/loan).

We need to remember that the restructuring was needed due to a lawsuit filed by SDCWA against MWD over the rates they charge us to deliver water to San Diego. The contract between the two agencies allows for cancellation if a lawsuit occurs.

At that same SDCWA meeting the board agreed to adopt an 11.3 percent rate increase for the water it sells to its 24 member agencies. Water experts commenting on the raise attest the raise was needed because of the increase in MWD rates.

The bottom line here is that the agreement between Poseidon and the SDCWA is vital to our water future. The outcome of the lawsuits is another story. Of course without water from our own sources the costs and availability will continue to plague the region.

In other North County news:

• Scripps Health has been selected as one of the top 10 health systems for quality and efficiency, according to a survey by Thomson Reuters. The survey showed only one San Diego-based hospital group in the top 10. Public research data of 255 health systems nationwide was scanned to determine the selection. The graders focused on mortality, medical complications, patient safety, average length of stay, 30-day mortality rate, 30-day readmission rate, adherence to clinical standards of care, and national patient satisfaction scores. Scripps Memorial Hospital Encinitas is currently undergoing a $225 million remodel and expansion. The hospital also received certification as an advanced primary stroke center from the joint commission that accredits hospitals.

• Tri-City Healthcare District has stepped up to share some of its resources with local nonprofits. The board of directors of the Healthcare District awarded $300,000 in grants at its June 25 meeting. Nonprofits selected were: Mama’s Kitchen, Meals With Love, Trauma Intervention Programs Inc., Camp Fire USA, The Education Resources Institute Inc., the Boys & Girls Clubs of Oceanside and Vista, Casa de Amparo, Interfaith Community Services, Carlsbad’s North County Lifeline Inc. and a collaborative program with Tri-City Medical Center’s Emergency Department, Vista Community Services and North County Health Services. During the past 14 years, the board has awarded more than $2.8 million in community grants.

• First Business Bank is changing its name to Bank of Southern California and will open its first non-North County branch on Fifth Avenue in downtown San Diego. The bank currently has branches in Carlsbad, Del Mar and Ramona. Veteran banker Katherine Willey will manage the new facility.

Census Ranks San Diego No. 8

The U.S. Census Bureau data released last week shows two North County cities as growing the fastest: Since the 2000 census, Carlsbad has grown 23.9 percent and San Marcos has grown 44.5 percent.

Interestingly, the top 10-ranked cities in the United States total 24.25 million people. Beijing and Mexico City each have more than 25 million people. San Diego came in eighth in the United States.

Ted Owen is president and chief executive officer of the Carlsbad Chamber of Commerce.