To achieve economies of scale and ensure the delivery of high-quality drinking water, California has been focusing on consolidating small water systems in small cities served by more than one water provider, particularly in communities where systems are out of compliance with drinking water standards. One challenge facing small municipalities that are resource-constrained is an existing law requiring a citywide election before consolidating a municipal system with a more financially and operationally stable neighboring system (even if the water system serves only a portion of the municipality in question). Such an election can be a cost-prohibitive factor for the smaller communities envisioned by the legislation. The California Water Association recently submitted a letter of support for the amended version of Assembly Bill 272 (AB 272), which would change that law.
Introduced in February 2017 by Assembly Member Mike A. Gipson (D-Carson) and subsequently amended, AB 272 encourages voluntary consolidation of small municipal water systems into larger systems by permitting a city to sell its public water utility to another public water system under several conditions, including the following:
- The water system serves fewer than 10,000 people and is wholly within the boundaries of the city.
- The city determines it is uneconomical and not in the public interest to own and operate the public utility, and the system has deferred maintenance.
- A majority of the city’s legislative body approves the sale and adopts a resolution at a regularly scheduled meeting that all requirements have been met.
- The system is not sold for less than fair market value and is economically feasible for ratepayers.
- There are at least two other water suppliers in the city, and the system borders the service area of the purchaser.
- There is a protest process that could trigger an election.
CWA’s support letter emphasized that, “Consolidating community water systems reduces operating costs and improves reliability, and consolidating municipal water systems with stronger water systems advances the goal of a reliable, accessible supply of safe drinking water for those California residents that lack such access.”
CWA testified in support of the bill at the policy committee hearing before the Assembly Water, Parks and Wildlife Committee on January 9, 2018, where it passed with only two negative votes. Unfortunately, for reasons unrelated to the substantive policy benefits contained in the bill, the legislation was held when it came before the Assembly Appropriations Committee on January 17. CWA is working on additional amendments with the author, who is planning to reintroduce the bill.
