RANCHO MURIETA, CA (MPG) - Rancho Murieta Properties and four affiliated companies have sued the Rancho Murieta Community Services District, alleging the district has violated decades-old agreements requiring it to pursue additional water supplies, provide water service for specified development and reimburse the developers for improvements they helped finance.

The lawsuit comes as the district is also attempting to resolve a separate water-related legal challenge with River Canyon Properties through mediation after that developer filed a Government Claims Act claim earlier this year. (See related story.)

Carol Anderson Ward is the primary investor in RMP, which has filed an application with Sacramento County to develop the Rancho North subdivision. It has yet to be approved.

The complaint, filed Aug. 3 in Sacramento County Superior Court, alleges breach and anticipatory breach of contract and seeks several court declarations regarding the developers’ rights.

Among other things, RMP wants a judge to order the district to diligently pursue an additional 1,400 acre-feet of water, provide the water and sewer connections required under its agreements, reimburse RMP for water-treatment improvements, and invalidate a 2025 district resolution that gives priority to establishing a one-year emergency water supply.

Asked who should be contacted for the district’s response to the lawsuit, CSD Interim General Manager Amelia Wilder replied, “The District does not have a response at this time.”

At the center of the lawsuit is an agreement dating to 1986, amended in 1991, between CSD and the predecessors of the current developers.

Under the 1991 amendment, the district agreed to pursue an additional 1,400 acre-feet of raw water for specified development and to continue “diligently, conscientiously, and expeditiously” pursuing alternatives until an augmentation project sufficient to serve the designated properties was approved.

The agreement also states that the district “will not refrain, on the basis of water supply considerations, from issuing will serve letters” for developments covered by the agreement.

RMP alleges CSD has failed for decades to fulfill that obligation.

The complaint points to earlier efforts to develop groundwater that were never completed, a later groundwater program that was abandoned in favor of recycled-water planning, and unsuccessful efforts to obtain authority to use Lake Clementia as an emergency drinking-water source.

More recently, although not reported in the lawsuit, the CSD Board has been investigating groundwater as a potential secondary water source. It hired Water Systems Consultants to identify potential well sites, and it formed the Water Vision Working Group to help evaluate and refine those locations.

The working group subsequently recommended additional geophysical evaluation to help determine the most promising locations before test wells were drilled. The board rejected that proposal. RMP cites the rejection in its lawsuit as further evidence that CSD has failed to diligently pursue additional water supplies.

The lawsuit also challenges Resolution R2025-03, adopted by the board May 21, 2025.

The resolution directs CSD to allocate any “secondary, mitigating source of water” on a priority basis toward establishing and maintaining a one-year emergency water supply.

RMP argues that policy conflicts with the 1991 agreement. According to the lawsuit, the earlier agreement requires CSD to obtain additional water for specified development and gives those developments priority to water obtained through the augmentation program.

The lawsuit contends CSD cannot instead give newly obtained water priority for an emergency reserve while citing inadequate water supplies as a reason to withhold service from development.

RMP is asking the court to declare the resolution invalid, alleging CSD exceeded its legal authority in adopting it.

The lawsuit also cites the district’s repeated consideration of a development moratorium as evidence supporting RMP’s claim that CSD may not honor its contractual obligations to issue future will-serve letters. (See accompanying sidebar on the water policy decisions leading to the lawsuit.)

A separate portion of the lawsuit involves money RMP says it is owed under 2014 agreements used to finance improvements to the district’s water-treatment facilities.

RMP and related companies helped to finance the improvements. Under the agreements, other developers benefiting from them were required to pay proportional shares as their projects proceeded, with CSD collecting the money and reimbursing RMP.

RMP alleges those developers currently owe at least $863,997 in base construction costs. With adjustments for construction costs, RMP calculates the reimbursement at least $1.2 million.

The issue overlaps with a separate dispute involving River Canyon Properties, developer of the Residences.

According to the complaint, CSD demanded reimbursement from River Canyon for the water meters for the development. River Canyon paid under protest, and CSD subsequently indicated the money would be held in a segregated account rather than immediately turned over to RMP.

RMP contends its agreements require the district to collect the payments and reimburse RMP.

Rather than simply seeking monetary damages, much of the lawsuit asks the court to require CSD to perform obligations RMP says the district has already undertaken.

RMP seeks an order requiring the district to diligently pursue the additional 1,400 acre-feet of water, provide water and sewer connections required by the Rancho North agreement, and pay reimbursement funds it alleges are due.

It also seeks court declarations that CSD cannot withhold will-serve letters for the covered developments on the basis of water-supply considerations and that the district’s emergency-water resolution is invalid.