1. EMWD Board Briefing October 18, 2017
Governance Concepts: The Challenge of Providing Safe Drinking Water to Communities Served by Chronically Non-Compliant Systems
EMWD Board Briefing
October 18, 2017

2. What is the Problem We’re Trying to Solve?
Approximately 306 systems in the State of California chronically serve contaminated water or cannot provide reliable water service due to unsound infrastructure/operations
The deficiencies vary: natural contaminants, man- made contaminants, failing infrastructure
Many of these are very small systems in disadvantaged communities
These systems and the communities they serve have limited financial, managerial and technical resources
Estimated supplemental funding needs are variable and single-solution (status quo) based

3. What are the Root Causes of the Problem?
Natural and man-made contamination, changing supply conditions and deteriorating systems
Inability of system owners, managers and operators to adjust, implement solutions, or repair infrastructure
Inefficient deployment of existing system financial resources and potential funding shortfalls
The continued existence and proliferation of very small mutual, private and public water systems with high overhead and limited resources
Inadequate statutory mechanisms (SWRCB, LAFCO, legislation etc.) to compel solutions

4. Finding a solution that best fits the problem and will lead to sustainable success

5. What are the Statistical Dimensions of the Statewide Challenge?
Non-compliant systems
(Population)*
Number of Systems
Percent
10,000 or greater 9 3%
1,000 to 9,999 41
13%
100 to 999
155
51%
Under 100
101
33%
Total =
306
84% of the non-compliant systems serve less than 1,000 people (~ 400 services)
* SWRCB State Drinking Water Data Base, July 2017 database
Approximately 70% of these non-compliant systems are privately owned or mutual water companies

6. Water Systems in California with Contaminant Exceedance
What are the Common Issues and Challenges with These Non-Compliant Systems?
Limited technical, managerial and financial capabilities
Relatively high administrative overhead
Small “orphan” systems - geographically dispersed
Consolidation, regionalization and mutual aid too complex and daunting
Public/private/mutual/JPA incompatibility
No willing larger host agency
Mutual and private systems receiving public money “bail-out” for failure
Disincentive to maintain, invest
Public funds enhancing privately held assets
Water Systems in California with Contaminant Exceedance
Governance is a foundational problem that must be addressed before funding needs are established

7. How might a “Regional Small System Water Authority” work?
Could be formed by legislature under special statute:
Multiple non-contiguous system boundaries under one consolidated public entity
Independent Special District
County or sub-county level
Statutorily provide enhanced financial capabilities and access to external financial resources
Out of compliance mutuals, privates or small publics receiving public funding required to dissolve and join
Representative governance (directors by division or former agency)

8. “Regional Small System Water Authority” Concept Benefits
Consolidation provides efficiencies of scale
Larger staff with technical/managerial expertise
Improved internal and external financial resources
Public, transparent governance
Not a forced consolidation between unequal parties
Substantial reduction in number of small systems
Example Grouping of Non-compliant Systems
MWC or Private
Public Agency
School
17 systems
6 systems
18 systems

9. “Regional Small System Water Authority” Concept - Financial Benefits and Potential Enhancements
Internal
Rates and charges with larger rate base
Levies and assessments
Special benefit assessments
Pollution liability assessments
General Obligation (G.O.) taxing authority with reduced approval threshold
Standby charges
Public debt, supported by statutory State credit guaranty
External
Preferential/High Priority state grants from bonds
SRF Principal Forgiveness
Donation of underlying assets from absorbed entities
General Fund short-term transfer for start-up
Funding Gap??
After formation, trigger review of need for supplemental funding options:
Fertilizer and Dairy assessment?
Public Goods Charge?
General Fund?

10. Contact Information
Paul D. Jones II, P.E.
General Manager
(951)
Debby Cherney
Deputy General Manager
(951)
Danielle Coats
Senior Legislative Program Manager
(951)