RANCHO MURIETA, CA (MPG) - The water issues at the heart of Rancho Murieta Properties’ lawsuit have played out publicly for more than two years, beginning before current CSD Board President John Merchant was elected to the board.

The CSD board discussed declaring a water-shortage emergency at its July 17, 2024, meeting. Such a declaration under California Water Code Section 350 could provide the basis for restrictions on new water connections.

The board discussed the proposal but took no action after District Counsel Patrick Enright explained the legal and procedural requirements that would have to be met.

Merchant, then vice president of Save Our Lakes & Open Spaces and a member of the public, supported a moratorium.

Following the meeting, Merchant initiated a SOLOS petition drive seeking a moratorium on future development. The drive, formally launched in August, eventually collected 2,025 signatures from residents. SOLOS President Cheryl McElhany presented the petitions to the CSD board Dec. 18, 2024.

McElhany said the request was based in part on findings in CSD’s draft Integrated Water Master Plan indicating that Rancho Murieta could face future water-supply and storage problems. She argued that the augmentation alternatives identified in the plan were not viable solutions and urged CSD to declare a water emergency.

She also pointed to the board’s August 2024 approval of will-serve letters for 240 lots in the already approved Residences, Riverview and Retreats developments, saying the decision jeopardized a reliable water supply for existing residents.

The board took no action on the petitions that night because the issue had been placed on the agenda for discussion rather than action. Then-Board President Steve Booth said the board should consider bringing the matter back before a committee or the full board.

Merchant was elected to the CSD board in November 2024 and later became board president.

Emergency Water Policy

In March 2025, Merchant began advocating for a separate but related policy to maintain a one-year emergency water supply.

At the March 11, 2025, Improvements Committee meeting, Merchant said the district should establish a requirement to maintain no less than a one-year supply of water in gross storage for emergencies. He identified obtaining state approval to use Lake Clementia as drinking water as a possible first step.

Merchant’s proposal was discussed at subsequent district meetings before coming before the full board as Resolution R2025-03.

On May 21, 2025, the board unanimously adopted the resolution, which makes establishing and maintaining a one-year emergency water supply a district priority when allocating any secondary or mitigating source of water.

Rancho Murieta Properties CEO Greg Dyer objected to the resolution at the May 21 meeting, arguing that it was vague and did not accurately reflect state water-code requirements.

That resolution is now one of the targets of RMP’s lawsuit.

The moratorium issue returned Sept. 17, 2025, when the board voted 3-2 to begin the formal process of considering a water-shortage emergency.

Merchant and Directors Linda Butler and Bill Gere supported beginning the process. Directors Randy Jenco and Tim Maybee opposed it. The vote itself did not impose a moratorium.

Under Water Code Section 350, the board would have to find after a public hearing that ordinary water demands could not be satisfied without depleting the supply to the point that there would be insufficient water for human consumption, sanitation and fire protection.

That hearing was held Feb. 10, 2026, at the Rancho Murieta Country Club and drew about 230 residents.

The nearly three-hour hearing included arguments on both sides. Ten speakers opposed declaring an emergency, several warning about potential litigation and financial consequences. Nine supported it, citing drought risks, limited storage and the lack of a confirmed backup water supply.

The board ended the nearly three-hour hearing without declaring a water-shortage emergency or imposing a development moratorium.

RMP now points to that history as part of its claim that CSD has indicated it may withhold water service from future development despite contractual commitments the developer says prohibit the district from doing so.