LAFCO REPORT SUPPORTS COLLABORATION -- NOT CONSOLIDATION

City's search for water savings by taking over Water District evaporates

The City's hoped-for cost savings didn't pan out in the LAFCO service review.

Back in September 2021, when Twentynine Palms requested that LAFCO review the City itself, TPWD (Twentynine Palms Water District) and Twentynine Palms Public Cemetery District, the City wrote LAFCO that the reason was to “identify potential savings of community resources with the elimination of redundant tasks and services within the Twentynine Palms Community."

But the nickel summary of what LAFCO came back with is, "Gain efficiencies - fair." On LAFCO's scale of strong-solid-fair-weak, "fair" is weak tea indeed. LAFCO says the potential costs savings from consolidating TPWD and the Cemetery into the City would be trivial. The city said it was looking for cost savings -- and LAFCO politely but firmly shot them down.

The Consolidation Gambit

The only way consolidation could yield significant cost savings was if layoffs were done. And at least some City Council members have already gone on record saying layoffs were off the table. Last month Council Member Steven Bilderain stated, ”If the Water District were to become part of the City, all Water District jobs would be retained.”

LAFCO acknowledges up front what everyone knows, that the City doesn't have staff who know how to provide water service. So the existing TPWD staff with technical know-how would have to be retained in any case: "Since the City does not provide water or cemetery services, there would not be significant efficiencies in water or cemetery operations. Rather, such efficiencies could be in purchasing, management, finance, technology, infrastructure, and others." [p19]. Thus there'd be little or no savings: "[If] the public employees who previously provided the service are moved to new roles within the local government, rather than terminated, then the consolidation would probably not make financial sense." [p23]

Now from LAFCO's perspective, does lack of cost savings mean the City was completely barking up the wrong tree in pursuing consolidation? Yes and no. By five other measures, LAFCO rates consolidation as potentially a net positive. These criteria are 1) increasing the number of candidates for open seats, 2) increasing voter turnout, 3) providing a single forum to address all community service issues, 4) providing a single forum to address a potential sewer system, and finally, 5) achieving local and regional goals.

The ideal LAFCO presents here is effectively the one-stop-shop and the-buck-stops-here theory of ideal governance. Under normal circumstances it's easy to see why this would appeal. But what about the not-so-simple reality of our actual governance in and around Twentynine Palms? LAFCO ignores the alternative view -- that it's often for good reason that we have a government of checks and balances.

Let's have a look at these non-monetary reasons.

It turns out that the first and second, increasing the number of candidates for open seats and increasing voter turnout, have likely already been addressed. As LAFCO states in their report, "competition has been a challenge for Water District elections. As for voter turnout, turnout has been strong for City elections and weak for Water District elections. With a move to Statewide General Elections for the Water District, the hope is for increased turnout." And even action toward improvement hadn't already happened, compared to cost savings, these concerns wouldn't justify consolidation: "Number of candidates and voter participation are solely not reasons for consolation." In so many words, a burger without a patty.

The third, fourth and fifth are providing a single forum to address service issues -- including sewer -- to achieve community goals. As LAFCO puts it, "As currently organized, community members must participate in two government forums [City and TPWD] to obtain a complete picture of water and wastewater matters. This may lend to inefficiency in messaging and planning. For example, the public may be better able to voice concerns and receive more attention from one lead elected official (mayor) and one lead administrator (city manager)." And "Should [a sewer system] become an explicit goal of the community, then the city absorbing the Water District and making into a city department could provide a single voice for all water and wastewater matters."

The ideal LAFCO presents here is effectively the one-stop-shop and the-buck-stops-here theory of ideal governance. Under normal circumstances it's easy to see why this would appeal. But what about the not-so-simple reality of our actual governance in and around Twentynine Palms? LAFCO ignores the alternative view -- that it's often for good reason that we have a government of checks and balances. Today we have City and Water District each with significantly different views and visions of what a local sewer system should look like. Given the City's track record, would putting TPWD under City control actually be what's best for the community? What LAFCO paints as an advantage of consolidation may upon closer scrutiny be a disadvantage.

The Collaboration Alternative

The City asked LAFCO to evaluate the benefits of consolidation, not collaboration, so it's no surprise that the bulk of LAFCO's review is devoted to the former. But LAFCO included a short but pointed section on collaboration. LAFCO's key comment:

"In Twentynine Palms, the possible desire to develop a municipal sewer system could benefit from Water District and City collaboration. First, both agencies have financial limits as to what they can do themselves. Second, due to the obvious lack of experience in developing a sewer system by both agencies, their respective strengths and experience would benefit the community. Lastly, the project and the community would be better off if the two parties were invested in this endeavor."

In Twentynine Palms, the possible desire to develop a municipal sewer system could benefit from Water District and City collaboration. - LAFCO Report

Placed in the report right after LAFCO's lukewarm support for the City's consolidation idea, it's not too much of a stretch to read between the lines here: LAFCO can't come right out and shout that they recommend collaboration, but LAFCO likely would prefer to see the City and TPWD work hand-in-hand on a future sewer system.

The Pesky Matter of Desert Heights Annexation

What about the potential annexation of Desert Heights in all of this?

When it comes to Desert Heights annexation things quickly get complicated. It turns out that consolidation comes in two flavors, either A) dissolving TPWD so the City takes over all its functions, or B) making TPWD a subsidiary district of the City. Each has worrisome implications for Desert Heights.

When it comes to Desert Heights annexation things quickly get complicated. It turns out that consolidation comes in two flavors, either A) dissolving TPWD so the City takes over all its functions, or B) making TPWD a subsidiary district of the City. Each has worrisome implications for Desert Heights.

If consolidation by dissolving TPWD (option A) became a reality, it would mean Desert Heights would no longer have a vote or a voice in provision of its water service. Per LAFCO, "[One] downside to dissolving the District and making its function a City Department, is that the District’s territory is larger than the City’s. In this case, the City would be obligated to continue service beyond its boundary - throughout the District’s territory. The consequence of this option is that those voters and rate payers residing outside the City would lack a vote in electing the governing body of the water department (the City Council). In the unincorporated portion of the Water District, the Water District identifies 1,477 connections as of May 13, 2022 and the Registrar of Voters identifies XXXXX registered voters as of May XX, 2022. Further, it would prohibit those registered voters from running for the governing body of their water service provider."

Whereas if consolidation with TPWD a subsidiary district of the City (option B) came to pass, the City would first need to annex most or all of Desert Heights. Per the LAFCO report: "A similar option would be to retain the Water District but make it a subsidiary district of the City. This means that the district transitions from an independent district to a dependent district governed by the City Council. In fact, a subsidiary district can be larger than a city. State law allows for subsidiary district status if at least 70% of the district territory and 70% of the district’s registered voters are within the city limits... At this time, the Water District is not eligible for subsidiary district status. It only meets the voter requirement, but does not meet the territory requirement because 62% of the district’s territory is within the city limits. In order to be eligible, the City would first have to annex an additional eight percent [of TWPD territory] to reach the 70% minimum. The most likely area for annexation would be Desert Heights."

There’s also the issue of DUCs, or Disadvantaged Unincorporated Communities. Per the LAFCO report, “Particular to annexations, the state mandate is to identify the location and characteristics of disadvantaged unincorporated communities (or “DUCs”). Gov. Code §56375 specifically prohibits an annexation to a city of any territory greater than 10 acres where there exists a disadvantaged unincorporated community that is contiguous to the area of proposed annexation unless an application to annex the entire disadvantaged unincorporated community has also been filed.” Because most of Desert Heights is a DUC, this would seem to imply that if any annexation occurred, the entirety of Desert Heights would need to be annexed, not just some small slice of it.

LAFCO Dings City for Transparency

Finally it’s worth noting that although LAFCO gives kudos to Twentynine Palms for good fiscal management, the LAFCO report dings the City for lack of governmental transparency.

Key transparency items LAFCO reports were missing from the City website when LAFCO checked 6/9/21 include compensation of elected officials, recent financial audits, list of elected officials and their terms of office, and recent meeting agendas and minutes:

As of this writing, 5/20/22, the city site now features some of these items, including a list of elected officials, all recent meeting agendas, and links to video of each meeting in lieu of written minutes. That said, other key transparency information — including elected officials’ terms of office and compensation, as well as audits from recent years — remains absent.

The Takeaway

LAFCO just dumped a bucket of icy water on the City’s fever dream of taking control of feisty TPWD. But this struggle may not be over. Even in the face of what appear to be mounting obstacles, the City could still petition LAFCO for takeover. Will the City be chastened, throw in the towel and agree to live and let live with the Water District? Watch this space.