Two Water Districts Talking Consolidation

The Irvine Ranch Water District and Santa Ana Heights Water Co. are negotiating an agreement to consolidate the two agencies.

Arthur Cencel, president of the board of directors for Santa Ana Heights Water Co., said the private company’s customers would be better served by the larger public Irvine Ranch Water District because of increasing costs and regulatory fees. The private company serves about 3,000 customers in Newport Beach, Costa Mesa and unincorporated Santa Ana Heights.

“The board believes the acquisition will mean improved and less expensive services for our customers,” Cencel said.

If the consolidation happens, Santa Ana Heights Water Co. customers will receive a 10% reduction in water rates. Monthly service charges would not change.

Irvine Ranch Water District has a local ground water supply that will allow Santa Ana Heights Water Co. customers to become less dependent on water imported from the Colorado River and parts of Northern California, Cencel said. Local water is less expensive and more reliable, he said, because in the event of a natural disaster such as an earthquake, the transport of imported water could be disrupted.

Under the agreement, shareholders of Santa Ana Heights Water District will be offered $1,100 per share in a buyout. A total of 51% of the shareholders must relinquish their shares for Irvine Ranch Water District to become majority shareholder.

The consolidation also would require approval by the county’s Local Agency Formation Commission.