Filling up a glass with water from a kitchen tap. (Photo courtesy of UC Riverside)

Fun fact No. 1: Orange County is one of California’s smallest when measured by square miles (a compact 791).

Fun fact No. 2: Despite the density of our little slice of paradise, it takes18 completely separate, independent little governments to make water gush from our taps and flush wastewater away — in addition to the baker’s dozen of cities that have their own water departments.

Fun fact No. 3: These completely independent little governments, tied to no city or county and operating largely beyond the public gaze, employ thousands of people — 2,155, to be exact, including more than 120 directors and board members, 61 plant operators and senior plant operators, 45 senior engineers, 38 senior mechanics, 18 well-paid general managers and their assistants and so on.

Fun fact No. 4: The Irvine Ranch Water District had the most well-compensated exec of the pack, with total comp of $447,189 (wages of $383,339 and retirement, health and other benefits of $63,850), according to the state controller’s most recent data. The average comp for these top dogs was $313,273 (more than the total comp for some city managers, who generally take a lot more guff).

Good government types have been howling about the redundancy of California’s special districts — and the great wads of cash many of them accumulate — for decades, but precious little changes. The Orange County Grand Jury wrote these words a decade ago, but they’re as accurate today as they were then:

“Numerous studies have declared California special districts ‘ineffective’ and ‘redundant.’ However, their operational independence, from not only city, county and state government, but also local tax-paying citizens has perpetuated their existence. While each performs actual or perceived necessary services, the continued independent structure of some special districts has become ‘unnecessary or obsolete.’

“For over fifty years, various government agencies have identified inefficiencies and lack of transparency of these once useful government agencies. During that time, only minor changes have been made to correct or dissolve most of these shadow governments.”

Generous

Several districts offer employees extremely generous health care packages  — many times more expensive ($33,159 a year) than the average Jolene’s plan ($5,868 a year).

And, on retirement benefits, several districts continue to pay not only the employer’s required share of pension contributions, but part of the employee’s required share as well.

First, those pricey health plans. The giant Orange County Sanitation District — which processes sewage for some 2.6 million Orange County residents — was the clear leader here. Its general manager got benefits worth $33,159, while another 48 OC San workers got benefits worth $27,159 each, according to the controller’s data.

The tiny Serrano Water District — fewer than 2,300 connections in the Villa Park area — gave its chief systems operator health bennies worth $30,996, while several other workers had benefits worth more than $29,000.

Small, but several times larger than Serrano, is the South Coast Water District, with some 11,400 connections in Dana Point, South Laguna and parts of San Clemente and San Juan Capistrano. It had two employees with benefits worth nearly $31,000, and another dozen whose health benefits cost $26,000 and $27,000.

Many other districts gave workers health bennies worth more than $25,000 a year, including Trabuco Canyon, Moulton Niguel, El Toro and the Orange County Water District.

When we asked why the packages are so pricey, several districts said it helps them keep good people.

“The health insurance benefit is a part of the overall compensation package designed to retain experienced, trained staff that are critical to the successful and reliable operation of the water and wastewater facilities on which the District’s customers depend,” Sherri Seitz, spokeswoman for the El Toro Water District, said by email.

Irvine Ranch Water District’s purple pipes deliver recycled water.

“The cost of the health benefit is dictated by market conditions. The District works with the ACWA Joint Powers Insurance Authority to secure a health insurance benefit at a discounted rate. The actual cost of the benefit varies for every employee depending on whether the benefit covers the individual, a spouse or a family. By no means is each employee covered at the highest rate. The District also requires the employee pay a portion of the monthly health insurance costs.”

At giant OC San, the district provides employer-paid vision insurance, short- and long-term disability options, basic life insurance and an employee assistance program as part of its recruitment, retention and wellness offerings, spokeswoman Jennifer M. Cabral said by email.

Its broker surveys the market annually to secure competitive rates, and the district has embraced cost-cutting measures, including joining a risk-sharing pool, bundling insurance coverages and negotiating rate guarantees. OC San workers also pay up to 20% of medical and dental premiums. In the last two benefit plan years, it negotiated overall decreases in benefit costs — 1.4% in 2021 and 8.8% in 2022, she said.

Premiums have increased roughly 36% since 2015, and, unfortunately, it’s not an expense the district has much control over, said Trabuco Canyon General Manager Fernando Paludi. The district can, however, control its total employee count — which is now 21, he said.

Perk on a perk

Reclaimed water from the Orange County Water and Sanitation Districts  (Sam Gangwer, Contributing Photographer)

Now let’s look at districts covering the employee’s share of the employee’s contribution to the employee’s pension plan.

Trabuco Canyon paid $18,400 of the employee’s retirement kick-in on its general manager’s behalf — in addition to paying its own share, which was $29,771.

Little Serrano paid $16,435 to cover its exec’s share, in addition to its $20,917.

Giant OC San paid up to $10,000 each for hundreds of workers, in addition to its own kick-ins.

This, too, was a sweetener for workers which is on its way out in many areas — but it takes time, because California law holds that you can’t reduce benefits for workers, but only enhance them.

There were some 517 workers at OC San getting this benefit on top of a benefit in 2013, but, as they retire, it’s down to 233 now, Cabral said. This plan is closed to new hires, and through attrition, it will ultimately sunset, she said.

The Costa Mesa Sanitary District stopped offering to pick up new employees’ shares in 2012, and only three people still get that benefit, said its general manager, Scott Carroll. Carroll could have been one of them — he started in 2010 — but volunteered to pay it anyway.

This benefit really helped Trabuco Canyon compete for qualified employees, said Paludi. Only 10 remain on this plan, and most are expected to retire over the next five to 10 years.

At the Santa Margarita Water District, the perk is long gone, said spokeswoman Nicole Stanfield.

Artifacts

Special districts sprang up to provide vital services before there were county or city governments around to do the work. Which was swell. But now there are 34 cities and a county government in O.C., and they could easily do those jobs, the grand jury said.

Scott Carroll, general manager of the Costa Mesa Sanitary District, offered some candid analysis.

“Yes, on its surface consolidation looks like a ‘good government’ fix,” he said by email. “As you obviously know, Orange County Local Agency Formation Commission has the authority to consolidate special districts, but (it) won’t begin the process unless and until the governing boards of two agencies agree to consolidate, which at this point is unlikely because the districts that exist today, and the communities they serve, have different philosophies when it comes to providing services.

“For instance, Irvine Ranch Water District believes recycled water is a great resource for water supply, while their counterparts at Mesa Water District believe recycled water is too expensive and depend instead on 100% of local groundwater supply.

“Sewer agencies are also reluctant to consolidate because of the potential liability exposure an agency may assume from poorly maintained infrastructure by the agency being dissolved. The remaining agency could be exposed to very expensive fines from the state because of sewer spills, and the agency would then be responsible for upgrading the infrastructure, potentially resulting in the agency going into debt and/or raising rates, neither of which is a desirable outcome.”

Critics have suggested it’s more akin to asking an overlord to give up his fiefdom. Who in their right mind would do that?

Many districts argue that, because of their hyper-local nature and laser focus on a single issue, they’re able to provide far better service than cities or counties — with their myriad distractions and pressures to fund public safety and roads and parks and libraries — ever could.

“We believe that the best government is the government that is smallest and closest to the people it serves,” said Celeste Carrillo, spokeswoman for the Mesa Water District. “As an example, should Caltrans take care of every city’s streets and potholes? Special districts, such as Mesa Water, tailor specialized services to meet local needs. Directors serve the neighborhoods in which they live and are directly representative of and responsive to their constituents.”

Others argue that folks in cities with their own water departments — Fullerton, Santa Ana, Anaheim — aren’t going thirsty, and that city governments are pretty close to the people — and much more visible.

There was a brief period of special district consolidation fever after the Orange County bankruptcy — when lawmakers were aghast at how many special districts there were, and how much money they sank in the doomed investment pool — but that fever passed quickly.

OC San is a product of that time, consolidating eight special districts that had eight individual boards of directors into one in 1998.

Irvine Ranch has absorbed the Orange Park Acres and Santa Ana Heights mutual water companies, as well as the Los Alisos and Santiago County water districts and the Carpenter Irrigation District.

The city of San Juan Capistrano’s water and sewer systems merged with the Santa Margarita Water District.

“From a governance standpoint, consolidating local agencies into larger, regional agencies can weaken local control and disenfranchise residents who would otherwise be able to address their concerns with their local utility through the democratic process,” Trabuco Canyon’s Paludi said.

“No government ever voluntarily reduces itself in size,” Ronald Reagan once said, in the quote that kicked off the grand jury’s blistering 2012 report. “Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”

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