Residents could vote on whether to merge Long Beach’s water, sewer and gas utilities during the November elections if the City decides to move forward with a potential charter amendment.
The city charter—the highest law of the land for Long Beach—currently separates the operation, management and oversight of the gas utilities from that of water and sewer utilities.
Leaders of the city’s utilities have contemplated a merger “for over 75 years,” according to Christopher Garner, general manager of the Long Beach Water Department.
Last week, the Board of Water Commissioners unanimously requested the council to seek voter approval to consolidate the utilities. The item will now go to the Charter Amendment Committee for consideration.
Other cities like Los Angeles, San Francisco, San Diego, Pasadena, Burbank, Anaheim, Riverside and Palo Alto have consolidated water and gas utilities.
Garner said that those cities can “take full advantage of economies of scale and flexibility of resource sharing” due to the consolidation of resources.
Garner pointed to the duplication of certain jobs within each department, such as human resources, accounting, payroll and engineering, though he emphasized that employees would not be fired. Rather, the consolidated departments would scale back their employees through natural attrition.
An independent study conducted in April 2020 by consulting firm BB&E estimated a savings of approximately $2.5 million in the first year of utility consolidation and $6.5 million by year five.
These estimates are based on:
- Expected attrition of employees
- Consolidating contracts and outside services, such as those for construction, drilling and printing—which the study notes are dependent on “how much, if any, of these water costs are duplicative with gas.”
- Operations and maintenance
- Savings in capital improvement—which the study notes: “is not to suggest that these expenditures are duplicative or the need for or prioritization of capital expenditures would change under Consolidation.”
“As we do see savings, it’s important to understand how you plan to reinvest those savings,” Vice Mayor Rex Richardson said. “Are we going to put more money into ensuring that our infrastructure is strong in the utilities? Are we going to put money back into the pockets of ratepayers? Are we going to invest in community benefits?”
Those decisions have not yet been ironed out, according to Lauren Gold, a spokesperson for the Water Department, who said the proposal still has “public meetings and considerations to go through before it even gets to the voters.”
Councilmember Suzie Price asked if there was any correlation between the attempted consolidation of utilities and the City’s recent Measure M lawsuit—where a judge deemed that the City’s use of excess revenue from water and sewer fees to pay for other city services was unconstitutional.
The City must pay back $30.8 million to the Water Department, $9 million of which has already been paid and used for refunds to ratepayers. The City will return an additional $21.8 million to the Water Department from the General Fund in the coming months, which the department will also return to ratepayers.
Garner assured that the timing has “absolutely nothing to do with the Measure M lawsuit.”
“We’ve looked at this and talked about it for at least four years seriously. It was looked at probably about 10 years ago, I know it was looked at 20 years ago, and it’s been talked about for 75 years,” Garner said. “This is something we’ve wanted to do for many many years.”
