Senate Sinks Pringle Bill to Merge Water Districts

Dealing a sobering defeat to Assembly Speaker Curt Pringle, the Senate scuttled a bill late Saturday that sought to shrink local government by merging a spate of Orange County water districts with adjoining agencies or letting them privatize.

Aides to Pringle blamed the bill’s demise on partisan politics, saying Senate Leader Bill Lockyer (D-Hayward) decreed that it should be left to die without being taken up in the Senate Appropriations Committee. With the legislative year winding to a close, Lockyer and other Democrats were being heavily lobbied by labor leaders worried that the measure would force many of the Orange County districts to privatize, costing government workers their jobs.

Pringle launched his push to consolidate Orange County water districts after the 1994 bankruptcy sparked concern over the staggering size of local government in Orange County, where there is a patchwork of 31 cities and scores of special districts. Pringle characterized it as a classic opportunity to slice government fat, long a rallying cry for Orange County conservatives.

Although that anti-government effort seemed tailor-made for the conservative county, Pringle’s bill was fought at every step by the water agencies that faced elimination.

Many of those districts were created years ago and reflect agricultural boundaries that have little relevance to the modern suburbia that has sprouted.

The notion that the myriad water and sewer districts have outlived their purpose is not new. Over the years, the Orange County Grand Jury has repeatedly suggested a consolidation effort. More recently, districts in South County have studied options for mergers.

When introduced earlier this year, Pringle’s bill sought to meld the county’s more than 30 water and sewer agencies into a single entity. But that proposal drew howls of protest from the agencies.

Pringle scaled back his original plan for one huge agency after a conference with big landowners, developers and the water districts in June. In its final form, it would have forced the consolidation of about a dozen of the county’s more than 30 water and sewer districts with overlying cities or adjacent water agencies.

In addition, the handful of agencies in Orange County that buy water wholesale and then sell to smaller districts would have been merged into two umbrella agencies, one for the northern half of the county, another for the south.

Ever the champion of business, Pringle gave the water districts an out via the free market. Districts could avoid the forced mergers by selling their operations to a private firm before the end of 1997. The privatized water outfit would have been regulated by the state Public Utilities Commission.

But the notion of privatization became an Achilles’ heel for the bill. Labor unions representing special district employees in recent days joined the assault on the measure, saying that its strict merger requirements would force most districts to go private, jeopardizing jobs of current employees.

Citizens in each district also could have risen up to block a consolidation. If a quarter of the voters or landowners in a district registered opposition, an election would have been held to decide the outcome of a merger.

Pringle’s measure called for all the mergers to be completed by the end of 1998, but extended the deadline to the end of 2000 if an election is held.

The bill had a strong stick if any of the districts exceeded those deadlines--the county would have been required to withhold property tax revenue from any agency that didn’t complete a merger on time. Tax monies would have been returned only after the procedure was completed.

After consolidation, an agency would have been prohibited from raising fees for five years unless it needed to cover a demonstrable hike in the cost of water.

Foes expressed worries over such provisions.

“Our concern is, it would jeopardize the credit-worthiness and bond security for these districts,” said Bob Reeb, state legislative director for the Assn. of California Water Agencies. “The last thing Orange County needs is another bond market scare.”

Opponents also questioned whether the consolidations would actually cut the cost of government doing business. A report by a Senate Appropriations Committee consultant suggests any cost savings would be small and could be initially offset by the price of attorneys and other services needed for a merger.

The bill called for the following consolidations or mergers:

* El Toro and Moulton Niguel water districts.

* Laguna Beach County Water District and South Coast Water District.

* Santa Margarita and Trabuco Canyon water districts. The bill also sets up a special 1998 vote in Trabuco Canyon so residents of the bucolic enclave, where the water agency is the only local government in existence, could decide whether they wanted to be gobbled by the bigger agency.

* Serrano Water District with either the city of Villa Park, Irvine Ranch Water District or East Orange County Water District.

* East Orange County Water District with the city of Orange or Irvine Ranch Water District.

* Mesa Consolidated Water District with Costa Mesa or Irvine Ranch.

* Los Alisos Water District with the city of Lake Forest or El Toro Water District.

* Yorba Linda Water District with the city of Yorba Linda.

* Garden Grove Sanitary District with Garden Grove.

* Los Alamitos Water District with Los Alamitos.

* Capistrano Beach Water District with Dana Point.

* Dana Point Sanitary District with Dana Point.