RANCHO MURIETA, CA (MPG) - A threatened lawsuit by a Rancho Murieta developer moved into public view after Rancho Murieta Community Services District counsel released a government claim and draft complaint filed by River Canyon Properties LLC, which alleges the district is improperly withholding water meters needed for residential construction.

The documents were released May 29 in response to a California Public Records Act request submitted by the River Valley Times after the matter appeared on the district’s May 27 closed-session agenda under “Conference with Legal Counsel – Existing/Threatened Litigation.”

District Counsel Patrick Enright said no lawsuit has yet been filed against the district.

“To directly answer your question: No lawsuit has been filed against the District by River Canyon Properties, LLC as of the date of this letter,” Enright wrote in a response to the newspaper. He added that the district had received a Government Claims Act claim, notice of a forthcoming lawsuit, a public records request and a litigation hold demand from the developer’s attorneys.

The claim alleges the district has breached, or is anticipatorily breaching, a 2014 Financing and Services Agreement known as the 670 FSA by refusing to issue water meters for River Canyon’s development, the Residences of Murieta Hills East and West subdivision.

Before filing a lawsuit against a public agency, California law requires a claimant to first submit a Government Claims Act claim, giving the agency an opportunity to review and potentially resolve the dispute before litigation is filed.

The claim specifically identifies Interim General Manager Amelia Wilder, District Counsel Patrick Enright, Board President John Merchant and “potentially others” as participants in the alleged conduct.

The 670 Financing and Services Agreement (FSA) is separate from the Rancho North FSA and was entered into in 2014 by the district and several landowners and developers. Both 2014 agreements were designed, in part, to help fund multi-million-dollar upgrades to Water Treatment Plant 1 and related water infrastructure needed to support future development.

The Residences project, developed by Bob and Michele Keil and their partners Doug and Lori Veerkamp, includes 198 approved lots. The first phase contains 68 lots, while the second contains 130.

Complaint Alleges Improper Conditions on Water Service

The draft complaint opens with a blistering attack on the district, accusing it of “blatant extortion” and arbitrary abuses of power. River Canyon alleges the district is improperly withholding water meters despite contractual obligations and previously issued will-serve commitments.

According to the complaint, the district is demanding that River Canyon post a $1.2 million letter of credit to secure disputed reimbursement claims, secure approximately $900,000 in obligations under the separate Rancho North FSA, pay an additional $756,011 in fees, and contribute toward the construction of a new water tank and groundwater wells expected to cost between $8 million and $10 million.

The draft complaint further alleges that the district is treating River Canyon differently than another developer governed by the same 670 FSA. According to the filing, the district allowed a letter of credit associated with The Retreats development to expire and released that developer from reimbursement-related security requirements without requiring an indemnification agreement.

River Canyon argues that, by imposing additional conditions on its project while releasing another developer from similar obligations, the district is using its control over utility service to extract unauthorized fees and infrastructure commitments. The complaint characterizes those conditions as “draconian” and alleges the district is “weaponizing its monopoly power over utility services” to obtain concessions not required under the 670 FSA.

Relief Sought

River Canyon contends the district’s actions constitute a breach of the 670 FSA. The complaint alleges that the continued refusal to issue water meters threatens to trigger breaches of the developer’s agreements with third parties. The developer is seeking a writ of mandate compelling the immediate issuance of water meters and declaratory relief affirming its rights under the 670 FSA.

Dispute Over Water Storage Requirements

The lawsuit threat is the latest chapter in a long-running disagreement over water service for the Residences subdivision.

The requirement for additional water storage first became public in September 2025. In a Sept. 16, 2025, letter to River Canyon attorney Gary Perry, District Counsel Patrick Enright wrote that before additional water meters could be issued, the district and River Canyon needed to address storage capacity in the Rio Oso and Van Vleck Ranch tanks.

Enright proposed a framework for planning a new water tank, including the selection of a site, estimated construction costs and allocation of costs among River Canyon, the district and other developments that would benefit from the facility. The letter stated that the district acknowledged the new tank would also benefit existing customers by improving system reliability and maintaining water service during periods of high demand.

The letter became public during Oct. 2 and Oct. 3, 2025, district meetings after developer Bob Keil described it as “nothing short of extortion.” Several directors said they had not previously seen the letter At the Oct. 3 special board meeting, Board President John Merchant said the letter was not one he had asked Enright to write. Merchant said the response was prompted after Keil demanded water meters and threatened litigation if they were not issued promptly.

Merchant had been serving as the sole member of the board’s Administrative Ad Hoc Committee since former Director Steve Booth left the board. At the Oct. 3 board meeting, Merchant noted that Director Bill Gere had already begun assisting him following his recent appointment to the board. Directors then formally reconstituted the committee and appointed Gere to serve alongside Merchant. According to discussion at the meeting, the committee’s primary duties were to answer staff questions and help oversee the search for a permanent general manager.

The dispute intensified on Nov. 19, 2025, when Interim General Manager Amelia Wilder sent a letter informing Keil that a third water storage tank would be required before the district would issue a water meter for the 51st lot in the 198-lot Residences subdivision.

Less than a month later, at the Dec. 4 Improvements Committee meeting, Wilder publicly backed away from the Nov. 19 letter, stating that it was “not valid or accurate” and had been rescinded pending further discussion about water demand, emergency storage needs and developer fees.

Questions About Board Authority

The issue resurfaced Feb. 18, 2026, when directors considered formally rescinding the Nov. 19 letter. Director Tim Maybee questioned how such a consequential policy decision had been communicated without formal board action.

The discussion occurred even as district representatives and developers continued to explore potential solutions to the tank issue, including possible sites, costs and funding arrangements for a third water tank.

Merchant said the Administrative Ad Hoc Committee had directed Wilder’s letter, while Gere stated he did not participate in drafting the Nov. 19 letter. Merchant described its release as the result of “a misunderstanding during a late-night closed session at the November board meeting.”

District Counsel Enright responded that, regardless of the committee’s role, an ad hoc committee does not have authority to make or reverse board decisions and that any such directive should be authorized by the full board.

He told directors he was preparing a new letter outlining exactly what the district was seeking from the developer.

District Response

The district has not publicly responded to the specific allegations contained in River Canyon’s Government Claims Act claim and proposed lawsuit.

In his May 29 letter, Enright emphasized that releasing the documents did not constitute an admission of any allegation and that the district reserved all legal defenses.