Mesa Water weighs asking voters about possible merger with sanitary district
The Mesa Water District may turn to the ballot box to see whether residents support the agency pursuing a merger with the Costa Mesa Sanitary District.
During a special meeting Thursday evening, Mesa Water board members signaled that they will look to place an advisory measure on November’s ballot asking voters whether they favor the concept.
Board members will meet again at 4 p.m. next Thursday to discuss the matter further.
The ballot measure idea comes as the water district reviews a study it commissioned on whether merging the two government agencies would make financial and operational sense.
The preliminary study from consultant Arcadis U.S. Inc. says the financial benefits of the merger could be significant — roughly $15.6 million in one-time savings and an additional $2.7 million annually.
Given the magnitude of the possible savings, Mesa Water board members said they owe it to ratepayers to explore the possibility further.
“With the evidence at hand, it would be irresponsible for us to ignore it,” said board President Shawn Dewane.
The bulk — about $13.6 million — of the one-time savings is characterized in the study as excess cash that a unified agency would have in its reserves.
Those funds could “be made available to provide rebates to customers, fund capital investments, reduce rates or provide for rate stabilization,” the study states.
A combined, larger agency would have more financial stability and not need as much in reserve, freeing money for other purposes, according to Stacy Taylor, Mesa Water’s external-affairs manager.
Additional savings would result from the elimination of duplicative staffing and consolidation of real estate assets, the study states.
Mesa Water has set up a website, MesaWater.org/SDSE, with information about the study and the process.
Costa Mesa Sanitary District General Manager Scott Carroll said Friday that he and his staff are still reviewing the study. The sanitary district’s board plans to discuss it at its next meeting, scheduled for 5:30 p.m. Thursday.
Bob Ooten, a sanitary district board member, raised concerns with the report at Thursday’s Mesa Water board meeting. He particularly questioned the assumption that a combined agency would contract out its sewer cleaning services, which the study estimates would save $289,000 a year.
The sanitary district recently took those services in house, he said, and the system has performed better since.
“Mesa Water continues its aim of collaborating with the Costa Mesa Sanitary District, and we look forward to working with them on next steps,” Dewane said. “We are also eager to hear our customers’ thoughts on this matter.”
The Mesa Water District provides service to about 110,000 people in Costa Mesa, parts of Newport Beach and sections of unincorporated Orange County, including John Wayne Airport.
The Costa Mesa Sanitary District provides sewer and curbside trash collection services to about 116,700 ratepayers in an area that is similar, though not identical, to Mesa Water’s.
Mesa Water sent a letter to the sanitary district on April 22 proposing a joint merger study.
Sanitary district board members have repeatedly raised concerns with how fast the process seems to be moving and with the level of input they had in shaping the study.
They ultimately declined to participate in the study, with some board members criticizing Mesa Water for behavior they found disrespectful and disappointing.
Mesa Water board members have said they would still welcome the sanitary district’s input.
Ooten said Thursday that he’s not fundamentally against a merger if it could mean savings for ratepayers.
“I’m not opposed to having one district if the numbers are true,” Ooten said.
“That’s what we aim to find out,” Dewane replied.
