Politics Report: Have a Nice Life, Water Authority

The San Diego County Water Authority’s relationship with the law firm that has guided its legal strategy and litigation for 25 years appears to have come to an end.

In a letter this week, Chris Frahm and Scott Slater from the firm Brownstein Hayatt Farber Schreck LLP, told the Water Authority’s General Manager Dan Denham that they were not comfortable signing even the legal services agreement the agency wanted to sign with them after it passed on a separate agreement for Frahm to mentor and advise the people representing the Water Authority at the Metropolitan Water District’s Board of Directors.

They wrote that they had only found out Frahm would not be getting that deal from the Voice of San Diego Politics Report.

“The potential legal services agreement as presented to and approved by the Board at its June board meeting was not provided to us for review and was incomplete as it did not address several matters pertinent to our representation,” they wrote.

They recognized the challenges the Water Authority faces but seemed to defend their work over 25 years. It felt very much like a break-up letter, summing up things to be proud of but also ready to move on.

“While we are cognizant of and fully appreciate the current water rate challenges facing the region and that they must be effectively addressed, we believe the wisdom of the actions taken by the Board of Directors over the past two decades to transform San Diego County from an end-of-the-pipeline agency dependent on outside suppliers, to having a highly reliable water supply supporting San Diego citizens and its economy, will withstand the test of time,” they wrote.

Why it matters: Brownstein and specifically Frahm and Slater have billed thousands of hours and collected tens of millions in fees from the Water Authority over the past 25 years after Frahm led the push to purchase water from the Imperial Valley as chair of the agency. Denham and the Board of Directors had wanted the firm to continue to represent them in ongoing legal issues with regard to the Colorado River. But the board balked at having Frahm continue to advise the people who represent the agency at the Metropolitan Water District.

That signaled a major shift in a couple of years of major shifts since Denham became the general manager. Put simply, we have gone from nothing short of legal and public relations war with Met, led in large part by Frahm and Slater to peace and partnership with Met and Frahm and Slater leaving.

Water rates continue to soar: City of San Diego officials recently told the City Council that ratepayers whom the city serves will likely have to pay 62 percent more over the next four years. The primary driver is the cost of the water from the Water Authority and the primary driver of that is the water it purchased from the Imperial Valley and from the company that built the seawater desalination plant in Carlsbad. Both projects and other costly investments have created an excess supply of water for San Diego that local leaders now anxiously want to sell to ease those projected rate increases.

Peace with the Met is key to that happening.

About That Fight

We have an acknowledgement, not an apology.

Backtrack: A few weeks ago, the fight over the future of Frahm’s relationship with the Water Authority broke out in public when Jim Madaffer, one of the board members, had a tense exchange with Dave Edwards, the agency’s general counsel. Edwards had insisted that Frahm’s work going forward be open to the public and not considered attorney-client privilege.

Madaffer accused him of “trying to pull a fast one” and then told me later that Edwards should find another job.

A group of water managers sent a letter reiterating their support for Edwards’ position and demanding Madaffer apologize.

The chair responds: Nick Serrano, the chair of the Water Authority Board of Directors, wrote an email to the board expressing his disgust about the whole exchange.

“Let me be direct and clear: the conduct exhibited both during the item and after was inappropriate. It did not meet our standards of mutual respect, civility, and professionalism. Further, there were multiple oversteps and a lack of deference to my role as the presiding officer during the hearing. I have spoken to both parties since then to share my thoughts (and yours) as well as hear from them,” he wrote.

Madaffer then responded. He didn’t apologize.

“I acknowledge that the discussion during the last meeting and the comments that followed became heated. I regret that our exchange did not reflect the decorum we owe each other and our staff. For that, I take responsibility for my part and reaffirm my commitment to engage respectfully moving forward,” he wrote.

But he still thinks not only should Frahm’s work be protected from public view, the whole discussion should have been.

“Historically, this Board has regarded our water assets — including canal lining, QSA water, and desalinated water — as real property. Discussions about these matters have been held in closed sessions under attorney-client privilege,” he wrote. If it’s real property, like real estate, the price the Water Authority is willing to accept or charge should be discussed in private.

“When we consider how to monetize surplus water capacity — our excess real property — our ability to have frank, honest, and protected discussions with legal counsel is essential,” he wrote.

Notes

The county announced two big retirements this week: The first was Claudia Silva, the county counsel. Her retirement was announced in two paragraphs and then her interim replacement was picked the next day. This was obviously the first big move of the new county majority led by Supervisor Terra Lawson-Remer, the new chair. They want to build a “force field” as Lawson-Remer called it, around the county to protect its services and priorities from President Donald Trump.

Probably not possible: But they definitely want more of a fighter in that position and someone that can pave the way for their policies. The feeling was Silva was more of an obstacle than an ally for them.

Who’s next? Are more big moves in the works? Remember, Chief Administrative Officer Ebony Shelton got her job thanks to the stubborn and steadfast support of former Chair Nora Vargas. She withstood every possible attack unions and their supporters could launch at her to make sure Shelton got the job. Then, however, Vargas vanished from public life.

Shelton is likely doing everything she can to support Lawson-Remer’s agenda or planning her own “retirement.”

Dan McAllister, out: There are only three local officials elected by the voters across the entire county: the sheriff, the recorder/assessor/clerk and the treasurer-tax collector. Dan McAllister has been the treasurer-tax collector for 23 years since he was first elected in 2002.

Friday the county announced he was retiring effective Aug. 2. Not quite as abrupt but certainly stunning for a man who was as present in public affairs for the past three decades as anyone. There was not a Rotary club, gala or public meeting he was not willing to attend. He personally spent dozens of hours with me explaining county issues and policies and dishing all the insider chisme from the local pension boards.

“During Dan’s entire tenure, the County’s Investment Pool earned the highest credit rating, while maximizing returns, safeguarding principal and ensuring liquidity for Pool participants – including voluntary pool members who placed their trust in Dan and his team to safeguard their assets,” the county communications team wrote in a prepared statement.

What now: Sarah Sweeney, a county spokesperson, explained the next steps. “The County’s Charter requires the Board to make an interim appointment until the next primary election in June 2026. On Aug. 26, 2025, the Board will consider an appointment process in accordance with Board Policy A-105 which outlines the process.

“Myrna Zambrano, Assistant Treasurer Tax Collector, will assume the responsibility of the day-to-day operations of the department until such time as the Board appoints a replacement.”

Lisa Halverstadt contributed to this report. If you have any ideas or feedback for the Politics Report, send them to scott.lewis@voiceofsandiego.org. I will be out next week but back in your inbox in Aug. 9.

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