In a move that surprised Vista and Carlsbad officials this week, San Diego Regional Water Quality Control board members rejected a $700,000 fine that the cities had negotiated with the agency's staff.

The cities now face a public hearing in June with the agency -- the county's water pollution police -- and the possibility of a larger fine, perhaps the $1.1 million figure that the control board recommended before settlement talks.

Officials from Vista, which must pay 90 percent of whatever the eventual fine will be, said Friday that they were taken aback.

"We were surprised and disappointed," City Attorney Darold Pieper said. "We're not really sure what we face at this point."

Vista, Carlsbad and the control board's staff announced in December that they had reached a deal on the fine, and all parties said last week that they expected the agency's board members to approve it.

But on Wednesday, the board pulled the deal from its consent calendar -- the part of its agenda reserved for noncontroversial issues that are typically approved without comment -- and unanimously rejected it.

John Robertus, the control board's executive director, said his board members simply wanted more information about the entire issue.

Last April, a corroded pipeline in Carlsbad near Buena Vista Lagoon spewed 7.3 million gallons of raw sewage into the lagoon. It was the second-largest sewage spill in recent county history, behind only a 34,000-gallon spill in San Diego in 2000. Vista and Carlsbad officials only corralled and contained the April spill after a citizen discovered it. Officials said 90 percent of the effluent that flows through the pipeline comes from Vista.

The failed settlement deal was built on the control board's initial recommendation of a $1.1 million fine.

Under the settlement terms, the fine would have been cut to $700,000 by giving the cities $395,000 worth of credit for the steps they've taken to fix the pipeline since the spill. In addition, $500,000 of the fine would have been spent on an environmental study for an expensive restoration project for Buena Vista Lagoon. The remaining $200,000 would go to the control board.

Vista officials said last week that they had already spent $575,000 on pipeline repairs, but that a complete fix could take years and cost much more. Carlsbad officials approved a $156,000 contract for preliminary design and environmental work on the repair project in January.

While city officials expressed surprise at the control board's decision, an environmental critic said the board had done the right thing.

Marco Gonzalez, an environmental lawyer active with the Surfrider foundation, attended Wednesday's meeting and asked for the settlement to be rejected.

Gonzalez said the cities should be given a much larger fine, perhaps $7 million, because they've had years to fix a pipeline that they knew was corroding.

He also said the settlement deal was flawed. Gonzalez said it was ridiculous to spend $500,000 on an environmental study of the Buena Vista Lagoon restoration project -- because the restoration project could cost $50 million to $100 million, and no one knew if it would ever find the funding to proceed.

"We need a public hearing about this," Gonzalez said.

Control board officials said that any settlement deal was officially dead after the board's decision to hold a public hearing.

However, Pieper said the city still hoped to reach a new settlement.

Contact staff writer Gig Conaughton at (760) 901-4067 or gconaughton@nctimes.com.