Sewer System Transfer Awash in Multi-Agency Input

Sewers Sec 7 IRWD vs EOCWD
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The following is a story by the Foothills Sentry newspaper, a Voice of OC media partner covering Orange, Villa Park, Orange Park Acres, Anaheim Hills, North Tustin, Silverado Canyon, and Modjeska Canyon.

This story was published in the Sentry’s January 2016 edition.

The future of the Area 7 sewer system, located in North Tustin and El Modena, has become a case study in government agency overlap and jurisdictional deference. It illustrates why “process” is important, but can slow government decision-making to glacial speeds.

What started as an unremarkable transfer of a local sewer system from the Orange County Sanitation District (OCSD) to the East Orange County Water District (EOCWD) has become a prize sought by two competing agencies that must meet the demands and schedules of multiple authorities with varying degrees of interest in the outcome.

OCSD has long wanted to rid itself of small local sewer systems, and concentrate on large regional infrastructure. It put out the call for willing operators for the Area 7 system last year. EOCWD, which already provides water service to that area, was the only suitor.

The two agencies subsequently drew up an exclusive negotiating contract; EOWD began a survey of the sewer system and submitted an application for transfer to the Local Agency Formation Commission (LAFCO). LAFCO has jurisdictional authority over agency boundaries in Orange County, and is the final word on interagency transfers like this one.

Due diligence

Before approving a boundary change, LAFCO is required to explore other possibilities. In this case, determine if other municipalities or agencies were interested in the sewer system and if so, allow them to apply for the job. Because the cities of Tustin and Orange border Area 7, they were approached, but declined. In fact, both cities wrote letters to LAFCO indicating their support for EOCWD.

LAFCO also queried the Irvine Ranch Water District. IRWD provides water service to Orange Park Acres, the Canyons, Irvine and Lake Forest. It also owns a sewer system. Just days before the LAFCO application period ended, IRWD filed a proposal to take on Area 7. LAFCO had indicated early this year that the sewer system transfer would be finished by May or June. But with two applications to assess, that decision was delayed.

Meanwhile, statewide drought conditions drew increased atten­tion to Orange County’s world-class Groundwater Replenishment System (GWRS) and the tons of sewage collected, treated and recycled back into the aquifer that provides much of the water used by north and central county residents. To ensure that sewage from Area 7 would continue to flow to the GWRS, OCSD asked EOCWD to sign an agreement guaranteeing that outcome. EOCWD agreed that Area 7 sewage would be sent to the GWRS “in perpetuity.”

Waste not

IRWD has its own sewage treatment plant and, under an agreement with county sanitation, a small portion of Area 7 sewage is already diverted to that facility. Many local water and sewer stakeholders fear that if IRWD gets control of Area 7, more sewage will be diverted away from the GWRS to benefit water users in south county.

IRWD is willing to sign a sewage flow agreement with OCSD, but it can’t. The county’s exclusive contract with EOCWD prevents it from speaking to other agencies. That contract, however, expires Dec. 31.

LAFCO cannot select an Area 7 operator until the applications from both competing agencies are complete. The last hurdle is the County Board of Supervisors’ approval to transfer property taxes from OCSD to the new agency. The board approved a property tax transfer to EOCWD, Nov. 17. It did not do the same for IRWD because that entity does not have a flow agreement with county sanitation.

As of its Nov. 18 meeting, LAFCO had one completed application from EOCWD and a filing from IRWD, missing supervisory approval of a property tax transfer. Supervisors cannot approve the tax transfer to IRWD until it reaches an agreement with OCSD, which it can’t do because of the exclusivity clause.

Back and forth

The OCSD board met that same day to discuss whether or not to renew the exclusive contract with EOCWD. Fearing that LAFCO would select IRWD without assurances that sewage would continue to feed the GWRS, the board unanimously voted not to extend the exclusive contract. It is now free to negotiate a sewer flow agreement with IRWD.

Had the sanitation district renewed its contract with EOCWD, it would have been unable to negotiate with IRWD, which means the board of supervisors could not approve a tax transfer, which means LAFCO would have only one complete application to assess.

At this point, LAFCO will not reach a decision until January or February. IRWD appears to have the edge because it touts 50 years of sewer experience and promises a 50 percent cost cut to ratepayers. EOCWD remains the choice of Tustin and Orange because it is already servicing the area, its board members live locally, and it has less overhead to consider in its rate structure. EOCWD has offered a 10 percent rate reduction to ratepayers, but its overall annual operating cost for the system ($748,795), is actually less than IRWD’s $755,000. EOCWD proposes pay-as-you-go financing for capital improvements; IRWD says it will float bonds, which East Orange supporters say will override the 50 percent rate cut.

Musical chairs

Villa Park has no pipes in the Area 7 panorama, but it also favors local control and is supporting EOCWD from the sidelines.

While the final decision is LAFCO’s, many participants in the broader agency dance wear a variety of shoes to follow through with the needed footwork. As is the nature of public service, elected officials are appointed to governing boards. Supervisors Todd Spitzer and Lisa Bartlett, for example, are also LAFCO commissioners. Officials from Orange, Tustin and Villa Park sit on the OCSD board. LAFCO commissioner John Withers serves on the OCSD board as well as that of IRWD. As an IRWD board member, he voted to file an application for Area 7; as a sanitation board member, he voted to let the exclusive contract with EOCWD expire; and as a LAFCO commissioner, he will vote on the outcome.

His participation in those votes is legal, but as OCSD board member (and Orange Mayor) Tita Smith noted, “it looks bad to the public.” Withers has been asked to recuse himself, but so far has not.

http://www.foothillssentry.com/sewer-system-transfer-awash-in-multi-agency-input-.html