Deal strikes disputed language from Mesa Water’s merger measure

Orange County Superior Court Judge Andrew Banks was launching into questions he had prepared for a hearing Wednesday in a dispute over an advisory measure on the November ballot concerning a possible merger of the Mesa Water District and the Costa Mesa Sanitary District. Then one of the lawyers in the case spoke up.

Was the judge aware, attorney Alan Burns asked, that an agreement had been reached to settle the issue?

“You’ve resolved all this?” Banks asked as the handful of people in his Santa Ana courtroom burst into laughs.

Indeed, attorneys representing the two sides, Mesa Water and Costa Mesa Sanitary District board President Mike Scheafer, had struck the deal about 20 minutes before the sides were to appear in court Wednesday, Burns said.

The agreement removes disputed language from the ballot question proposed by Mesa Water so it will read, “Shall the Mesa Water District and the Costa Mesa Sanitary District pursue consolidation?”

The question originally read, “Shall the Mesa Water District and the Costa Mesa Sanitary District pursue consolidation if it could result in a one-time savings of up to $15.6 million, which equates to $650 per ratepayer, and annual savings of as much as $2.7 million, which includes wastewater rate reductions of up to 28%, as identified in the Optimal Governance Structure Study prepared by Arcadis U.S. Inc.?”

Mesa Water commissioned the Arcadis study this year to examine whether it would make financial or operational sense to explore combining with the sanitary district.

The sanitary district declined an invitation to participate in the effort, raising concerns with the level of input it had in shaping the study and how fast the process was moving.

Scheafer filed a challenge Friday to including the references to the study’s findings in the ballot question, designated as Measure TT. The sanitary district has characterized the findings as flawed; Mesa Water officials have said they stand by them.

Scheafer said Wednesday that the way the question was written “tried to convince or tried to tell people how to vote.”

The agreement, he said, is a “full victory for transparency in the election process.”

Burns, representing Scheafer in the case, said the arrangement on the new wording is “exactly what we wanted.”

Mesa Water General Manager Paul Shoenberger said his district also is pleased with the result.

“The public will get to vote on consolidation,” he said. “The ballot question is clear.”

Mesa Water board President Shawn Dewane said in a statement Wednesday that the agreement “also validates the study’s findings in that CMSD did not legally challenge the $15.6 million upfront and $2.7 million annual cost savings that could be passed on to ratepayers if the districts combined.”

Wednesday’s hearing was set to discuss whether Scheafer had filed his objection to the ballot question in time for the judge to rule on it.

In a hearing the day before, Patrick Munoz, an attorney for Mesa Water, contended the deadline to make a challenge had passed Aug. 22, four days before Scheafer filed his.

That ended up being a moot point with Wednesday’s agreement.

Mesa Water first floated the idea of a possible merger in April, when Dewane sent a letter to the Costa Mesa Sanitary District proposing a joint study on the topic. In declining to participate, sanitary district board members described Mesa Water’s behavior as disrespectful and disappointing.

After the Arcadis study was released, Mesa Water moved to place the advisory measure on November’s ballot. Given the level of possible savings, agency officials said, the public should get the chance to weigh in on the idea.

The sanitary district, on the other hand, claims the possible savings the study calculates are incorrect.

Mesa Water 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 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.