Officials with two water districts have engaged business groups in the Santa Clarita Valley to gain support for a proposal to consolidate the districts into a single water agency. Under the proposal, Castaic Lake Water Agency and Newhall County Water District would combine to provide water and water management planning for much of the city of Santa Clarita and some outlying county areas. The last hurdle the two water utilities need to get over is legislation at the capitol in Sacramento that will allow the consolidation. “If we get the legislation passed, the next challenge is building an efficient and well run Valley-wide water utility out of the pieces,” said Matt Stone, general manager at Castaic Lake Water Agency. Castaic Lake and Newhall County are public utilities and governed by boards elected by voters within their respective boundaries. The boards of both districts voted in December to move forward with creating a new district. Business groups, including the Santa Clarita Valley Chamber of Commerce, the Valley Industry Association, or VIA, and the Santa Clarita Valley Economic Development Corp. have received presentations on the proposal. The chamber and VIA have come out in favor of the consolidation idea, Stone said. Lois Bauccio, chief executive of the chamber, said the chamber sent a letter of support early in the process because combining two districts is a better use of resources. “Right now everything is done double and that doesn’t make sense to us,” Bauccio said. “We think economically it is a good way forward.” Holly Schroeder, chief executive of the economic development corporation, said the group is waiting for the legislation to become more defined before the group takes a public position. Operational efficiencies that translate into stabilization of rates and fees to keep them from going up and be beneficial to all businesses and ratepayers, and increased transparency, are of interest to the group, Schroeder said. “Those will be some of the focus areas as we will be looking at as we evaluate the proposal and the legislation,” she added. Attempts to reach a representative of VIA were not successful. As of early February, the legislation language had been written and submitted to the legislative counsel but no area lawmaker had emerged as a chief sponsor, Stone said. He added that the water district has contacted the assembly members and state senators to discuss who would be the logical person to carry the bill. “That should be a development in the next couple of weeks,” Stone said. Probolsky Research, in Newport Beach, conducted a survey of 300 customers of the water retail agencies and found 49 percent of respondents supported the idea of consolidation without any background information. When presented with the challenges and opportunities of consolidating, that number increased to 62 percent. Seventy-eight percent of the respondents said they preferred if the new agency reflected the best attributes of the existing water districts. Santa Clarita receives it water from three sources – aquifers, imported water through the state from the north, and through recycling. Castaic Lake was formed in the early 1960s as the agency contracting with the state to import and distribute water to the retailers who provide water to residents and businesses. The proposed single agency would handle both wholesale water acquisition and retail sales to customers. The retailers serving the valley are Newhall County with 9,750 service connections; the Santa Clarita Water Division, owned by Castaic Lake and operating 30,700 service connections; Valencia Water Co., whose stock has been owned by Castaic Lake since 2012 but operated by a separate board overseeing 31,350 connections; and Los Angeles County Waterworks District No. 36, the smallest of the retailers and not part of the consolidation plan. The primary benefits from consolidating the two districts are achieving economies of scale in water distribution that will result in savings. A study done by National Demographics Corp., in Glendale, and MF Whipple & Associates, in Laguna Hills, concluded that the new single agency would save $2.8 million over a three-year period and an ongoing savings up to $1.6 million a year after that through job consolidation and reduction of outside service contracts. Having a single agency makes technical sense because the valley’s groundwater basin, from which water is drawn, cuts across the boundaries of all the water agencies, Stone said. An expanded recycled water program would involve all the retailers, and the state’s integrated watershed planning rules require that the agencies all cooperate. “The thought was we should just create an institution that matches the scale of how we are trying to manage water,” Stone added. “On the water operation side, we can benefit in efficiencies doing it that way.” The proposed legislation has been written to give Castaic Lake the legal authority to operate Valencia Water Co. as part of its operations, Stone said. As for the county waterworks district, Castaic Lake will keep the door open to have it join the new agency and in the meantime keep supplying it with water imported under the state contract. It serves about 1,338 connections. “That can be a future discussion at some point if both sides wish it to be,” Stone said.