The Poway City Council unanimously approved a $441,000 payment to the city of San Diego on Tuesday to resolve a years-long billing dispute and establish an amended water rights agreement with the city.
The payment retroactively replaces water charges made by San Diego to Poway for the calendar years 2017 to 2025, according to a Poway staff report.
The water agreement between the two cities, which dates back to 1968, was intended to resolve a protest related to San Diego’s prior downstream water rights at Hodges Dam and to secure permits needed to build the Poway Dam in 1971.
“The 1968 agreement requires the city of Poway to measure surface water diversions and provide replacement water to offset downstream impacts as surface water flows are diverted away from San Diego by the Poway Dam and stored in the Lake Poway reservoir,” the staff report stated.
The agreement gave Poway a means of replacing water that flowed into the Lake Poway reservoir, said Poway Utilities Administrator Carlos Cortes. Replacement water was measured with hydrology-based calculations and monetary compensations to San Diego, the staff report said.
“Between 1972 and 1998, these methods resulted in ongoing disputes, technical studies, and unsuccessful attempts to formalize revisions,” the staff report states. “Although Poway continued reporting (water) flows, San Diego ceased invoicing after 1992.”
Courtesy City of Poway
The city of Poway is updating its method of measuring water flows into Lake Poway and will resume standard calendar-year billing cycles with the city of San Diego. (Courtesy City of Poway)
By fall 2018, Poway staff discovered there was a lapse in payments and notified San Diego. The following year, the two agencies worked out a system for resolving past obligations. They resolved the issue in January with an amended water rights agreement that establishes updated procedures for measuring water flows and includes a negotiated lump sum payment for 2017-25.
The full amount of the agreement is $534,266 but $92,400 was paid by Poway in fiscal year 2025-26, officials said. The City Council approved the additional $441,866 payment from the water fund on Tuesday.
“The 2026 agreement also re-establishes the city of Poway’s ongoing annual obligation to provide replacement water calculated using updated methods and requires Poway to install a permanent upstream measuring device and associated culvert during a future fiscal year,” the staff report said, which estimated the project will cost about $200,000 to be budgeted in a future fiscal year.
With adoption of the agreement, San Diego will invoice Poway retroactively and will resume standard calendar-year billing cycles, with payments due March 15 each year beginning in 2026.
The payment amounts will depend on the amount of water that is runoff into Lake Poway as it is measured by the metering device yet to be installed, Cortes said. Water use estimates may also be used in the calculation, he said.
“There will be a credit for water that is released from the Lake Hodges Dam,” he added.
The credits are expected to continue for 10 years or until the dam repairs are completed, said Poway spokesperson Rene Carmichael.