Cathy Lee, general manager of CWD, said, “The mission of CWD is to provide reliable water with diligent customer service at the lowest possible rate. Our mission would not change for our customers whether [the] combination happens or not.” Photo courtesy of Carmichael Water District

SACRAMENTO, CA (MPG) - The word is on the street; Sacramento Suburban Water District (SSWD) is considering combining with Carmichael Water District (CWD). Why? And what does this mean to the average consumer?

First, let’s determine which water district is yours. According to CWD’s website, “Carmichael Water District serves the unincorporated community of Carmichael and is located in the northern part of Sacramento County along the north bank of the American River.” A district map can be found at carmichaelwd.org/184/District-Map.

SSWD’s sector includes Arden/Arcade, Foothill Farms, and portions of Citrus Heights, Carmichael, Fair Oaks, North Highlands, Sacramento, Antelope, and McClellan Business Park. A district map can be found at sswd.org/about/district-at-a-glance.

The reason for the combination may have something to do with debt — CWD owes about $32 million while SSWD is $54,910,000 in debt. A combination would allow for a coalescence of debt.

An email from the office of Dan York, general manager of SSWD, elaborated on the potential merger: “Carmichael Water District and Sacramento Suburban Water District are exploring combination opportunities between the two neighboring water utilities to improve efficiencies, reduce costs, increase water supply reliability, and enhance customer service.”

Cathy Lee, general manager of CWD, said, “The mission of CWD is to provide reliable water with diligent customer service at the lowest possible rate. Our mission would not change for our customers whether [the] combination happens or not.”

The combination was discussed at the recent workshop, the 4th so far, hosted by SSWD at 3701 Marconi Ave on January 31. The goal of the workshops was described in the water district literature: “The workshops will include a brief presentation and the opportunity for attendees to ask questions and share their thoughts with CWD and SSWD technical experts, managers, and board members. The water districts have been exploring the possibility of a combination since 2021.”

Dan York spoke at length after the meeting was commenced with a gavel by SSWD President Kevin M. Thomas. York explained that costs have increased enormously since the COVID outbreak — things like a mile of pipe and fire hydrants cost much more. (New pipe is expected to last about 100 years.) Other costs include bankrolling some 75 employees at SSWD and 25 at CWD. Cathy Lee indicated that there would be no layoffs as a result of a combination.

Craig M. Locke, SSWD board member, expressed the convenience of having more employees, as would occur in a combination. He said, “Now, you look at an IT department — it has five guys. And if you’re a big enough organization, you have five guys in your IT department. One of them moves to Canada, one of them gets hit by a bus, one of them retires, whatever — you have four other guys that are there and they have the knowledge, the institutional knowledge to know how everything works. If you’re a small agency and you have an IT department with one guy, and he moves to Canada, you need to get a new guy on board and train him up. That goes for HR, accounting — take your pick.”

In regards to the combination, workshop literature reads, “While there may be initial start-up costs associated with the combination, these costs are an investment in a more cost-efficient future.” It also noted that, “A combined district can achieve cost savings through economies of scale.”

The public was given the opportunity to ask questions. One community member asked if those attending could take a yes/no vote on whether they favored the districts’ combination. The request was curiously denied. Lee said the board needs to “consider a lot of other factors” before making a decision.

During the public comment period, one person pointed out that the previous workshop at CWD saw opposition of the combination by the majority of the public. This was confirmed by Lee in a phone call. She said the CWD board decided it needed more analysis. She expressed, “At this time we don’t have a scheduled joint board meeting.” Robert P. Wichert, vice president of SSWD, said, “One board meeting a month [would be] huge savings.”

Other possible savings were outlined in the workshop literature: “…a combined organization, with its expanded water resources portfolio, broader customer base, and enhanced efficiency, is poised to offer greater rate and financial stability. This is expected to result in lower rate increases over time compared to what would be anticipated if the districts remained separate.”

The literature also listed potential drawbacks to not pursuing a combination: decreased water reliability due to climate change, escalating costs, rate increases, water rights and regulatory challenges, and resource strain.

This sort of combination has been done before. According to sswd.org, Arcade Water District and Northridge Water District consolidated into SSWD in 2002.

Workshop literature read, “The current expectation is that discussions will persist into early 2024.” There may be a public election concerning the combination should the districts move forward. A combination, as expressed by board members at the workshop, would hopefully entail only benefits for the consumer.