Water & Drought

Suburban Sacramento-area water districts eye merger

Sacramento

Two suburban water agencies serving half a million people combined in suburban Sacramento and Placer counties have stepped up merger negotiations, saying they can better survive the drought as a larger organization.

Officials at Sacramento Suburban Water District, which relies on groundwater, and their counterparts at San Juan Water District, which relies on surface water, say they could provide more reliable service. They also say a combined agency would save money and reduce the amount of inevitable rate increases, and give the region a stronger political voice on water policy.

The two agencies have a combined budget of about $65 million and serve most of suburban Sacramento County, either directly or by selling water to other suburban water agencies, and part of Placer County, including Granite Bay.

While water officials in communities served by the agencies have not taken a position on the proposal, they say the districts have yet to make a convincing case.

“We need some backup analysis,” said Marcus Yasutake, Folsom’s environmental and water resources director. “How have they arrived at these conclusions?”

Officials in Fair Oaks and Carmichael agree with Yasutake that the agencies have not done enough analysis to justify a merger. They say they’re concerned the merger could lead to the opposite of what is being pitched by the water agencies – higher rates and less reliability. Fair Oaks, Orangevale, Citrus Heights and parts of Folsom buy water from San Juan on a wholesale basis.

Some officials expressed concerns to a joint committee of Sacramento Suburban and San Juan board members after reviewing an initial analysis of the proposal. The districts paid $100,000 to a consultant for the analysis and a survey of customers. The survey found 37 percent of customers had an unfavorable opinion of a merger, 21 percent had a favorable opinion, and 42 percent had no opinion.

The Sacramento Suburban and San Juan boards are expected to vote next month on whether to proceed, and the agencies plan to conduct more analysis if they move forward.

If that happens, the Sacramento Local Agency Formation Commission also will conduct its own analysis before deciding whether to approve the merger, possibly in January. The seven-member LAFCO consists of six elected officials and one public representative.

Managers at San Juan and Sacramento Suburban say they have compelling arguments for a merger. They say a combined agency would have more clout at the Capitol, which has become more important as California enters its fourth year of drought. They point to Gov. Jerry Brown’s order last week that water agencies reduce usage by 25 percent as an example of the crucial role the state plays in water service.

Keith Durkin, assistant general manager at San Juan, said that despite being at the doorstep of the Capitol, the area’s water agencies don’t have much clout there because they are too small. By contrast, Westlands Water District in Fresno and the Metropolitan Water District of Southern California have been extremely effective at convincing state lawmakers of their needs, Durkin said.

“We can go to the Capitol and say we represent a half-million people,” he said. “Legislators will listen.”

Ron Stork, a senior policy analyst at Friends of the River, agrees that a merger might help the agencies in the world of politics. “The water agencies in Northern California have far less oomph than those in the south, and our agencies are getting rolled,” he said.

The agencies also might make a good match since they each rely on different sources of water, said Stork, a longtime board member of the Sacramento Water Forum, which set area water policy years ago.

Bringing together different primary water sources is the strongest argument for improved reliability under a merger, said Sacramento Suburban General Manager Robert Roscoe. His agency has worked to reduce its reliance on groundwater, but it needs to step up its efforts after state lawmakers last year required groundwater-reliant agencies to seek sources in addition to wells, he said. The agency also must contend with the potential for groundwater contamination from decommissioned military bases and Aerojet Rocketdyne land, he said.

San Juan Water District has been particularly vulnerable to the drought, as it gets most of its water from Folsom Lake and the American River. The impact of a merger would be that a combined agency could rely more on groundwater in dry years and on surface water in wet years, Roscoe said.

But some local water districts worry about what the changes will mean for them. The Carmichael Water District, which treats and sells its own water, is concerned the merger “may exacerbate regional tensions and problems both now and the future,” General Manager Steve Nugent wrote in a letter to San Juan and Sacramento Suburban. He urged deeper analysis about what changes in water use will mean for the region.

Yasutake also says the districts need to come up with data projecting what the merger would mean for reliability. San Juan sells water to Folsom for parts of the city north of the American River.

Mike McRae, president of the Fair Oaks Water District board, said “we want to make sure rates remain low. We want more information to know what this will mean for rates.” The Fair Oaks board has long complained about San Juan’s rate increases.

Durkin and Roscoe say it’s not clear how much money would be saved through a merger. San Juan board members have said they don’t plan to lay off employees but would cut positions as people leave the district. Sacramento Suburban has made no similar guarantee, Roscoe said.

Call The Bee’s Brad Branan, (916) 321-1065. Follow him on Twitter @BradB_at_SacBee.

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