Commentary: 2 districts, 2 different approaches to aging infrastructure

It seems like every other day TV news programs include a story about water gushing out of a broken water main pipe in Los Angeles, flooding homes and businesses and, just two years ago, buildings on the campus of UCLA.

The Los Angeles Department of Water and Power, like so many water systems throughout the U.S., is nearly 100 years old and is long past its life expectancy. The DWP is planning to spend $1.3 billion over 10 years to replace 435 miles of deteriorating pipes.

Surprisingly, many wastewater agencies are no different than Los Angeles, having deferred pipe replacement for many years, and are now paying for this procrastination. Garden Grove is spending more than $54 million over 10 years to upgrade its wastewater system. San Diego is investing more than $1 billion on its wastewater system over a six-year period. Silicon Valley Clean Water is proposing an ambitious $479 million pipeline replacement project.

Obviously, water and wastewater pipelines in Costa Mesa are aging as well. However, the manner in which Costa Mesa Sanitary District (CMSD) and Mesa Water District (Mesa Water) have chosen to address aging infrastructure substantially differs. CMSD’s policy and philosophy has always been to save for our future and, as a result, CMSD is being proactive in replacing its aging infrastructure at regularly scheduled intervals.

In the last five years, CMSD has spent more than $7 million replacing pipeline, pumps, valves, control panels and related equipment. CMSD is video recording the entire wastewater system to evaluate its condition, and when a pipe deficiency is identified, CMSD repairs or replaces it immediately.

Within the last six months, CMSD has repaired 138 line segments at a cost of $200,000, and at our last board meeting directors approved spending $3.2 million to upgrade a pump station and rehabilitate a pressured pipeline, with plans over the next five years to spend $10 million on infrastructure. Perhaps most significantly, all of these investments are being made without incurring any debt.

Mesa Water’s board of directors has acknowledged that saving for the future is a wise practice. Director Fred Bockmiller opined as such at a Mesa Water rate increase hearing on Dec. 12, 2013, stating, “Because the Board (Mesa Water) didn’t begin saving in 1960 for replacement of the pipes, today, 50 years later, we would be halfway through their life of the 100-year pipe, but (Mesa Water’s board) didn’t begin saving, so we started a little late, but we’re starting.”

Mesa Water Director Jim Fisler, who was board president in 2013, was so impressed with CMSD’s approach to saving money that he said the following at the same rate hearing: “Costa Mesa Sanitary District has 1.78 years of cash on hand of operating expenses. Mesa is trying to get to 1.75 years, so we are trying to get in the next five years where the sanitary district is today. We will be on par with another special district in Costa Mesa.”

Because they have kicked the can down the road for so many years by choosing not to budget for pipe replacements, Mesa Water’s board is now projecting to spend $200 million in the next 10 years to upgrade its infrastructure.

The board acknowledges that the only way to pay for this enormous expense is to borrow and go further into debt, as Bockmiller stated at the same hearing, “…we are going to have to borrow, I’m sure of that, at some point in the future.”

Vice President Ethan Temianka shared a similar observation, saying, “… we will be prepared to go into debt.”

Fisler was more frank: “The ratepayer’s wallet is going to be hit very hard.”

Mesa Water wants you to believe a one-time savings of $15.6 million will occur if Mesa Water and CMSD consolidate. Apparently, although the plan is not clearly articulated, the raid on CMSD reserves for capital improvements will somehow fix Mesa Water’s failure to save for a rainy day.

Of this projected $15.6 million savings, which CMSD has stated repeatedly is neither accurate nor feasible, 95% would come from CMSD. According to the same study commissioned by Mesa Water, which is already $27 million in debt, they could borrow still more money to replace wastewater infrastructure.

This logic flies in the face of the comments made by Mesa Water Board members at that fateful 2013 hearing and violates Mesa Water’s own policy described in Resolution No. 1443 that unnecessary borrowing must be avoided.

In my opinion, it is irresponsible for a special district to pay more money (e.g. interest) over the course of 20 years when funding is currently available to make improvements.

Contrary to water main breaks, raw sewage can pose serious health risks, and spills often result in significant fines from state regulators. Deferring critical infrastructure improvements for a one-time savings is bad public policy and not the philosophy of the CMSD board of directors. To watch Mesa Water’s public hearing about water rates, go to https://www.youtube.com/watch?v=XxrIi2vbXYQ.

MIKE SCHEAFER is president of the Costa Mesa Sanitary District board of directors.