Foot Dragging on Consolidation Alternative?
Facing three more steep annual rate increases, TCWD customers have for nearly two years urged their elected representatives on the water board to consider whether consolidation with a neighboring water district whose rates are much lower could provide some relief. In our May 2024 poll, 97% of respondents said they would support consolidation if it would lower their water bills. And several recent oral and emailed public comments to the water board supported consolidation.
“It doesn’t seem like you are taking [consolidation] seriously,” Robinson Ranch resident Al Burnham told board members at the March 19 meeting. Indeed, the only arguable movement in that direction on this Wednesday’s agenda (item 11) appears to be a 14-page memorandum to the board from its legal consultant, Hanson Bridgett LLP, on the procedural steps for consolidation through the Orange County Local Agency Formation Commission (“LAFCO”), the agency charged with approving annexations and consolidations by local governments, including water districts. The district paid Hanson Bridgett $31,712.18 on February 28, an amount listed in the “top 10 payments” for February 2025. Information on the consolidation process and procedures is available on LAFCO’s website.
Our message to the water board: step up the pace, perform an independent study of the consolidation option, unfiltered by staff or consultants with a conflict of interest in the matter.
TCWD Consolidation—Why, and Why Now
Economy of scale: because of its small size, the TCWD must spread its fixed costs—administrative overhead, maintenance of equipment and facilities, etc.—over a smaller number of rate payers, and charge them more than larger nearby water districts do. Actual water and property tax bills dramatically illustrate this:
Increased efficiency benefiting both districts through elimination of duplicated administration, equipment and facilities
Historical successes: consolidation of several other small Orange County water districts has resulted in lower rates for customers. An in-depth 2024 study by the Orange County Grand Jury found that the Irvine Ranch Water District, one of TCWD’s neighbors, “has a proven track record since 1997 of having successfully unified five providers benefiting 57,000 residents with improved water reliability and standardized rates.” The study also found that annexation of San Juan Capistrano’s water system, plagued by deep indebtedness and failing infrastructure, by the Santa Margarita Water District (SMWD)—also a neighbor of TCWD—resulted in “[general] satisfaction with their new provider’s service and water quality,” despite a temporary rate increase to San Juan Capistrano residents.
Official duty: if the district is “doing all it can” to contain its ever accelerating rate increases, but the increases continue year after year with no end in sight, the board has a duty to its customers to consider alternatives to business as usual. Their primary duty is to the rate payers—not the administrative overhead, the consultants, or their own seats on the board.
In spite of the above considerations favoring consolidation, whether or not it will actually reduce TCWD’s outstandingly high water bills can only be determined through a detailed, quantitative and independent analysis that yields the resulting water bills as the bottom line. But that fact has not deterred speculation about the outcome of a consolidation by some who urge that the idea be dismissed categorically, out of hand, immediately, without even a second look. They point to the annexation of San Juan Capistrano’s water system by the SMWD and note that Capistrano’s rates went up as a result. SMWD did in fact raise water rates in Capistrano by an average of 7%, up to $30 more per month, and added a special assessment on the property tax bills in some areas of the city in order to fund over $7 million in improvements and repairs of failed infrastructure in the city. But, as the Grand Jury found, “customer rates for ID 9 [improvement district 9, city of Capistrano] are on schedule to be consistent with the entire district by 2030.”
The bottom line for Trabuco Canyon: even after the rate increases and property tax assessments, water charges today in San Juan Capistrano are still lower than in Trabuco Canyon, as shown below.
Water District “Will Serve” New 181-Unit Housing Tract on El Toro Road
Despite broken water main and no place for million-gallon tank
The Trabuco Canyon Water district will provide water and sewer services to the proposed Saddleback Meadows development to be located along El Toro Road adjacent to Hidden Ridge and Portola Hills, according to a conditional agreement approved by the water board at its March 19 meeting. Under the agreement, the developer must construct a one-million-gallon water storage tank at an unspecified “off-site” location in order to obtain a “will-serve” letter from the district—a legal requirement for county approval of the project.
The enormous tank was originally supposed to be built on a 3.78-acre plot within the project boundaries, but that plan was nixed after the neighboring Vedanta Society objected to the visual intrusion and sued the developer. The agreement would require the developer to “identify and acquire an Off-Site Property for the New Reservoir that is suitable for the construction of the New Reservoir, as approved by the District in its reasonable discretion.”
Under the agreement, funding and construction of the tank actually depend on reaching a second, future agreement between the parties.
“C. The District and Developer will enter into an agreement providing the terms and conditions under which the Developer will construct and dedicate to the District the New Reservoir on the Off-Site Property.”
General manager Fernando Paludi told board members that the agreement-within-an-agreement would shield the district from any financial risk. But some public commenters asked the obvious question about this arrangement: What happens if the parties can’t agree? Trabuco Canyon resident Bruce Conn called the plan “short-sighted,” and “an imposition on the community with the potential for legal issues.” Commenting by email, canyon resident Gloria Sefton wrote: “This amendment is essentially an ‘agreement to agree,’ which makes its enforceability questionable…and could lead to significant litigation down the road if TCWD does not ultimately approve the as-yet unknown reservoir and its siting.”
Sefton’s comments, along with several others submitted prior to the board meeting, were shared privately with board members, but not read aloud for the public in attendance to hear, as Sefton had requested. When asked by board member Mark Anderson about Ms. Sefton’s email, the district’s legal counsel replied, “we don’t read out” the emailed comments. [Please see “Are Emailed Public Comments Really ‘Public’? Part 2,” below].
Are Emailed Public Comments Really “Public”? Part 2
Several Submitted at February and March Board Meetings—But What Did They Say?
In a previous Watchdog post, we wondered why the water district solicits “public comments” on every board agenda, but declines to read them aloud at the meeting or summarize them in the minutes, as it does for in-person comments. In what sense, then, we asked, are such comments actually “public?”
We were subsequently informed that printed copies of these emailed comments are made available at the meeting. Watchdog readers may from now on peruse them, leisurely and publicly, here (February 2025), here (March 2025, part 1) and here (March 2025, part 2).
New Board Member Shops Around, Saves Rate Payers $83,000 on Meeting Room Sound System
People complaining that they couldn’t hear what was being said in the water board meeting room at 32003 Dove Canyon Drive should welcome the installation of a new sound system, with wireless speakers and microphones for board members and the public. Newly-elected board member John Horst researched, located and set up the needed equipment with help from district assistant general manager Michael Perea. It was put into service at the March board meeting.
An earlier attempt to solve the decades-old meeting room problem was made at the February meeting, where a wired system was rented and tested. It did not perform well, nor did board members appreciate the $85,000 purchase price tag, which included charges for 1,600 feet of wire and cable.
Horst’s wireless system cost under $1,400 and its performance received a thumbs-up from the March audience. Horst explained that he visited Best Buy and Guitar Center to identify the necessary components, and then had the district order them from Amazon.
Horst, who campaigned on “thinking outside the box,” should be commended for getting the rate payers the best deal for their money, and for sending an important message that should be applied to all district expenditures: a little shopping around goes a long way.
Board De-Funds PR Consultant
For 60-day study period
On motion of director John Horst, the TCWD water board voted to cut off funding to PR consultant, RockSpark Communications for 60 days, during which a “Public Outreach Ad Hoc Committee” will be formed to “review the District’s needs and current communication strategy.” The March 19 vote followed a slide show presentation by the firm’s principal, Robin Rockey, highlighting her work, including “modernizing” the On Tap newsletter, and publishing “fact sheets” about the water rate increases.
Rockey was initially hired administratively by the district general manager in December of 2022 to sell us on the big June 2023 rate hikes, and the Watchdog has documented all district payments to her firm over the intervening two years. When asked by director Mark Anderson, general manager Fernando Paludi indicated that the district had paid the firm an average of $86,000 per year.
Our view: while water districts may have some legitimate public communications needs, much of what Rockspark has put out was cheerleading and propaganda aimed at the district’s own customers, to get them to accept the huge rate increases that have caused grief and hardship to many, and even forced some to sell their homes and move out of the district. That kind of public communications we can live without. In any case, given the district’s dire financial condition, where it is borrowing money and raising rates fast and furious, a PR consultant is a luxury we cannot afford.
Attend Wednesday’s water board meeting and weigh in on the above items or any other concerns. The agenda, meeting minutes and reference materials are posted 72 hours before each meeting at TCWD.ca.gov/transparency/public-meetings. Find out how your water bill dollars are being spent, and voice your opinion. You can attend the meeting and make a public comment, email comments to mperea@TCWD.ca.gov before 5:00 p.m. Wednesday, or participate by phone at 1 (669) 900-6833 (Toll Free) Access Code: 913-8681-1652. If you email comments, be sure to request that they be read aloud at the meeting and reported in the minutes.
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How can we, the homeowners, force a consolidation? They simply want to keep their insane salaries. Any decent CEO in the business world would certainly consolidate. Law suits? Any public entity that is not 100% transparent in all aspects of their behavior is suspect of our trust.