RANCHO MURIETA, CA (MPG) - The Rancho Murieta Community Services District faces another potential legal dispute over water service, although that case has not yet reached the courthouse.

River Canyon Properties, developer of the 198-lot Residences of Murieta Hills subdivision, filed a Government Claims Act claim earlier this year, a step generally required before suing a public agency. 

The claim alleges CSD breached or threatened to breach a 2014 Financing and Services Agreement by placing additional conditions on the issuance of water meters.

Owner Bob Keil said on Aug. 12 that River Canyon Properties and CSD have agreed to mediation, which will likely take place in September.

The district has already agreed to provide water hookups for all 68 lots in the subdivisions first phase. 

The 130 lots in Phase 2 remain in contention, he said.

River Canyon’s dispute is substantially narrower than the lawsuit filed Aug. 3 by Rancho Murieta Properties and four affiliated companies. River Canyon’s claim primarily concerns CSD’s conditions for providing water hookups to an already-approved subdivision. 

The RMP lawsuit is a broader contract action challenging CSD’s water-supply policies and asserting long-term water-service, water-augmentation and reimbursement rights affecting several RMP-affiliated properties.

The two disputes also approach developer reimbursements from opposite sides of the same 2014 financing arrangement. River Canyon is a “Reimbursing Landowner” under the 670 FSA and disputes, among other things, CSD’s demands that it secure reimbursement obligations as a condition of receiving meters.

RMP, meanwhile, contends it and its affiliates helped to finance improvements to Water Treatment Plant 1 and are entitled to receive reimbursement payments collected from River Canyon and other developers. 

The RMP complaint says River Canyon tendered a disputed payment under protest and alleges CSD is obligated under the separate Rancho North FSA to pass reimbursement funds owed by the 670 owners on to RMP and its affiliates.