Valley Center Municipal Water District was founded on July 12, 1954 and was formed under the provisions of the California Municipal Water District Law of 1911 (California Water Code sections 71000 et seq.). It is located in northern San Diego County and provides water and wastewater reclamation services to its domestic, agricultural, and commercial customers. The District encompasses a 100 square
mile (64,253 acres) service area and serves a population of approximately 29,709. It includes the unincorporated area of Valley Center and unincorporated areas north of Escondido. The District is governed by a five-member Board of Directors (the “Board”), elected by geographic division and serving staggered four-year terms. The Board manages the District through an appointed general manager. The District’s management team also includes four department heads that oversee the Finance, Engineering, Information Technology, and Operations Departments. As of January 1, 2022, there were 67 regular full-time employees working for the District. For reporting purposes, the financial statements present a combined report which includes all District activities for which the Board of Directors of Valley Center Municipal Water District is primarily financially accountable. The District has established various self-balancing groups of accounts in order to enhance internal control and further the attainment of management objectives. The groups of accounts are identified in the District’s books and records as General, Lower Moosa Wastewater Treatment, and Woods Valley Ranch Wastewater. LOCAL ECONOMY AND OUTLOOK
Valley Center is in transition from being predominately agricultural to a more rural-suburban setting. This is happening to Valley Center and other surrounding areas, such as Rainbow and Fallbrook, because of negative economic pressures on agriculture. This includes regulatory restrictions, labor costs and shortages, market competition, and a rapid rise in the cost of water over the last decade. Many growers have been forced to abandon their permanent tree crops (citrus and avocado) farming operations, or shift to higher value, lower water use crops such as ornamental flowers, nurseries, and wine grapes. As a result, the District has seen a significant decrease in the volume of water deliveries to its customers. Valley Center Municipal Water District relies on the San Diego County Water Authority (SDCWA or “Authority”) as its sole source provider for the treated water. The Authority imports water through the Metropolitan Water District of Southern California (MWD) system. MWD obtains its water from two sources: the Colorado River Aqueduct and the State Water Project. This water has become increasingly unreliable in recent years as deteriorating ecological conditions have led to regulatory restrictions on pumping water supplies from the Bay-Delta. The Bay-Delta is a 1,100 mile inland river delta and estuary formed at the confluence of the Sacramento and San Joaquin Rivers east of San Francisco. It is a key water supply source for California including the millions of residents in San Diego County. In addition, the Authority’s water supply portfolio also includes relatively new supplies from the Carlsbad Desalination Plant and the Colorado River. The supplies from the Colorado River include a water conservation and transfer agreement with the Imperial Irrigation District and water conserved by two projects, the All American Canal Lining Project, and the Coachella Canal Lining Project. The years ahead will be challenging times for the California water community. Uncertainties concerning the Bay-Delta conveyance, new surface storage, the effects of climate change, court decisions affecting both supply and cost, and public environmental issues all contribute to a difficult planning environment in which the cost of imported water is all but certain to continue to increase. Water shortages, both natural and man-made, are a possibility. These factors have the potential to adversely impact the finances of the District, and staff is working diligently to continue improving operating efficiencies and to cut costs in order to minimize the associated financial impacts.
