Cleaning Up the Sanitation Districts

* The recent article on reorganizing and perhaps privatizing the water and sewage activities in Orange County brings to mind the success story of similar initiatives in England and Wales that I have been involved in as a consultant.

Most of the water and all of the sewer operations were taken out of the hands of local government and combined into 10 regional authorities. Most of these are larger in terms of connections than a consolidated Orange County, and with mixed demographic make-ups. The consolidation led to more professional management and improvements in customer service and cost effectiveness. The 10 were subsequently privatized, leading to another burst of energy.

While there was little immediate improvement in rates, the savings made and the access to capital combined to lead an industry which has been notoriously underfunded to succeed in meeting ever more exacting quality standards and customer demands set down by the public, the government and by the European Union. Beneficial capital projects have been completed and British water companies compete successfully in marketing their technical and management capabilities, together with British hardware, to other countries. In the recent rounds of rate negotiations, cost to the customers is coming under greater scrutiny as well.

Having had an involvement with this entire process, it is tempting to suggest a two-step approach. First combine and let the process improvements and the natural benefits of consolidation take place. Then consider privatization--not by selling off the pieces, but by privatizing the whole. If the British experience is any guide, the benefits of either and of both will amaze most any skeptic.

O. MARK MARCUSSEN

Fullerton

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The Orange County Sanitation Districts had about $450 million invested in the Orange County Investment Pool. Despite losing over $100 million, they still have sufficient excess cash to pay $250 million for the landfills. I think that all Orange County taxpayers would like to know just why a public agency has so much cash on hand with no particular plans for its use.

One reason the districts have so much extra cash is outrageous fees like the excess capacity charge. This exorbitant fee is imposed on new businesses to pay for the increased capacity needed at the regional treatment plants. The only catch is, the fee is not related to any sewer project or any other real impact, and is only a paper projection by the districts. It is one thing to ask users to pay for the real impacts of their usage on the system. It is quite another thing, and very unreasonable, to ask them to pay for planners’ pipe dreams.

These fees are not small. For example, one business which is proposing to relocate in Orange County from Los Angeles County, which would employ hundreds of new workers, was asked to pay about $1.5 million above normal permit costs. This fee makes Orange County a much less attractive business location. The potential impact of this fee is so great that the Orange County Business Council assembled a “red team,” including representatives from the governor’s office, state Trade and Commerce Agency, and State Sen. Rob Hurtt’s office, along with Orange County business and government representatives, to investigate the matter. In light of all the attention and publicity, the districts reduced the fee from $1.5 million to $600,000, without ever providing any adequate justification for even the reduced amount.

The people who adopted this fee, and who are making Orange County inhospitable to new businesses, are not even directly elected to serve on the Orange County Sanitation Districts’ Board of Directors. This board is appointed by the agencies served by the districts, and its members are not in any way accountable to the people over whose lives they affect. Perhaps it is time for an organization as large, powerful and wealthy as the Orange County Sanitation Districts to be governed by a board directly elected by, and therefore directly answerable to, the people of Orange County.

Now, the Orange County Board of Supervisors is proposing to sell the county’s landfills to the county sanitation districts. If the sanitation districts are willing to do things like the excess capacity charge to their customers, what would they be willing to do to those who use the landfills?

Aside from the issue of whether the Orange County Sanitation Districts can be trusted to run the landfills, such a sale would mean that Orange County taxpayers, who have already bought and paid for the landfills, will be forced to pay for them again, through the Orange County Sanitation Districts.

Sale of the landfills will not save the county any money on an ongoing basis, and is meant only to generate immediate cash. This sale will ultimately result in all of us paying more to place trash in our own landfills. If the county supervisors wish to sell public assets, like the landfills, in order to generate revenues to cover their poor investments, then those assets should be sold to the highest private bidder. The citizens of Orange County do not deserve and cannot afford to pay for their landfills twice. On the other hand, if the county just wants to get out of the landfill business, it could merely turn over control of the landfills to the cities, who control a majority of the waste flow going to the landfills in the first place.

BRUCE A. BROADWATER

Mayor

Garden Grove