Introduction

On February 1, 2021, the San Lorenzo Valley Water District (SLVWD) unexpectedly revealed that it is considering a proposal to consolidate with neighboring Scotts Valley Water District (SVWD). The Friends of San Lorenzo Valley Water (FSLVW) has written a Primer on the proposed consolidation. It includes the following:

• An overview of the consolidation process

• The role of the Local Agency Formation Commission (LAFCO)

• A detailed summary of actions taken to date by the two water districts and responses by SLVWD residents

• A summary of arguments for and against moving forward with the consolidation process

The purpose of this document is to distill the pro and con arguments, making them readily available for SLV residents.

Arguments for Considering Consolidation

The arguments for consolidation fall into two basic categories: those that apply generally or theoretically to public agency consolidations and those that recognize the specific circumstances of SLVWD and SVWD.

Consolidation is a standard business tool that provides numerous potential benefits.

Consolidation provides the potential for:

• Eliminating overhead / redundancy (e.g., for staff roles such as Director, Outreach, Professional Services, etc.)

• Reducing duplication of regulatory burdens

• Reducing duplication of memberships and subscriptions

• Reducing duplication of assets (e.g., sharing heavy equipment)

• Improving and streamlining in-house activities

• Gaining stronger negotiating power and better pricing for purchases

• Improving cross-training opportunities and customer-service coverage (especially when current departments consist of a single person with no back-up)

• Attracting a highly-qualified workforce by offering more diverse opportunities and career path

• Enhancing customer messaging

• Improving infrastructure management

In general, larger water districts are able to provide water more economically and efficiently than smaller districts in part because of state laws and policies that favor the former over the latter.  Consolidation therefore provides opportunities to improve performance and reduce costs, thereby saving ratepayers money.

SLVWD and SVWD are in a good position to take advantage of these potential benefits.

Proponents also note that SLVWD and SVWD are in a good position to consider consolidation for the following reasons:

• SLVWD and SVD have broad similarities and complementary strengths.

• Both districts are facing ever-increasing pressure as they struggle to deal with aging infrastructure, intensifying regulatory constraints, and climate change.

• The two districts have been collaborating successfully over the last several years.

• The two districts share the Santa Margarita aquifer, and consolidation would enhance their ability to negotiate with Santa Cruz City and Santa Cruz County in the Santa Margarita Groundwater Agency process.

• SLVWD is significantly larger than SVWD in terms of hookups and registered voters, so concerns that Scotts Valley would dominate the proposed new district and use SLVWD water for development are unfounded.

Based on these considerations, proponents advocate for taking the first step toward consolidation by assessing in concrete terms the potential benefits as a first step in the LAFCO process.  The costs for making such an assessment are not available.  (See page 3 of our Primer for more information on the LAFCO process.)

Arguments Against Considering Consolidation

Those opposed to consolidation argue that the proposal should be dropped or at least tabled immediately, regardless of the potential benefits.   No further effort or funding should be expended.  Their arguments fall into at least three general categories:

1. The proposed consolidation is at odds with the District’s responsibility to serve its SLV constituents.

• It will be impractical for a single Special District to serve both communities because the Scotts Valley community is so different from the San Lorenzo Valley.

• SLVWD is one of only two public agencies that specifically serves the SLV and is responsive to SLV voters.  The role and mission of SLVWD should not be diluted.

• The District’s mission includes protection of the SLV watershed, a critical priority that will inevitably be put at risk should consolidation occur.

• Scotts Valley over time would dominate a consolidated district to the detriment of SLV because of its focus on growth and development and its access to political and economic resources.

2. ·The proposal should be tabled at this time because of the uniquely daunting challenges currently facing SLVWD and SLV citizens.

• These challenges stem from last year’s fires, the loss of homes and infrastructure, the pandemic, and potential debris flows and evacuations.

• There are too many other high priority issues that need addressing, and the proposed consolidation will divert too much time, energy and resources.

3. The proposal should be rejected because it is so politically unpopular, and assessing the potential benefits will not alter the political equation.

• SLVWD Directors have a responsibility to listen to and respect the will of their constituents.

• Three SLVWD director seats are up for election in 2022, before the consolidation can be completed.  Should the process move forward, it will likely dominate the election campaign with a high likelihood that an anti-consolidation slate will succeed and not only halt the process, but also polarize the community at a time when unity of purpose is sorely needed. 

The Board must carefully consider and reject all three of the major arguments by opponents before voting in favor of any motion to proceed.

Conclusion

The SLVWD Board will consider whether to proceed with the LAFCO process at its March 4, 2021, meeting at 6:30 p.m.