The Sanitation Districts have a dedicated Energy Recovery Section whose mission is the safe, clean, and cost-effective utilization of energy resources. After labor, energy costs typically represent the second highest cost for wastewater treatment plant operations. Staff keeps electricity costs down by being an active player in the electricity market to obtain the lowest purchase price possible and by reducing the amount of energy used. Examples of energy efficiency include:

1. Electricity Market:  Costs are kept low by purchasing electricity through an independent service provider under California's Direct Access Program. Purchasing electricity from the Districts' Puente Hills and Calabasas Landfill gas-to-energy facilities has also been a win-win for out wastewater and solid waste operations. Wastewater paid less than if it had to buy electricity from Edison, and Solid Waste sold its electricity at a rate higher than if it sold that electricity to the grid.
2. Energy Efficiency:  The Sanitation Districts have reduced energy consumption through our Energy Efficiency Management Program. With this program, savings are achieved by incorporating energy efficiency measures into capital improvement projects, optimization of operations, rate optimization, and identification of billing errors. The program has realized $60M in energy efficiency savings since its inception in 2006.

The Sanitation Districts Mission Statement includes the phrase, “Converting waste into resources.” We take unwanted materials and transform them into valuable commodities such as recycled water, energy, and recycled materials. We then monetize these commodities and offset the amount we charge our customers. Examples of this include:

1. Recycled Water:  Beginning in the early 1960's, the Sanitation Districts recognized treated wastewater could help solve some of Southern California’s water supply problems. We developed a plan to collect wastewater from residential and commercial sources, treat it through advanced water reclamation plants, and then recycle it. Under this plan, the Sanitation Districts currently produce 147 million gallons per day of recycled water, used at over 850 different sites throughout Los Angeles County. In addition to the indirect benefit to the local communities of reducing the amount of imported water that must be purchased, the Sanitation Districts generate over $10M in annual revenue through the sale of recycled water.
2. Energy Production:  The Sanitation Districts have been leaders in the production of green energy from biogas, a wastewater and solid waste treatment byproduct, and in converting refuse to energy. Our facilities generate about 60 MW of electricity annually. We use around 20 MW of that electricity on-site at our facilities, saving the Sanitation Districts roughly $21M in electricity purchases. The excess energy is sold back to the local power grid. In addition to generating electricity, some biogas is purified and sold at publicly accessible compressed natural gas fueling stations.
3. Recycled Materials:  The Sanitation Districts’ materials recovery facilities, which are partially leased to independent operators, recycle materials such as green waste, curbside recyclables, and food waste to generate additional revenue.

The Sanitation Districts have realized cost savings by reducing maintenance, minimizing service interruptions, and extending the life of assets. Examples of this include:

1. Predictive Maintenance:  Implementing a predictive maintenance program that uses data analytics and sensors to monitor the condition of assets, have helped the Sanitation Districts identify potential problems before they occur. This has prevented costly repairs and improved the efficiency of maintenance programs.
2. Robust Sewer Maintenance:  The Sanitation Districts have implemented an innovative crown spraying program to reduce the rate of corrosion and the need for replacing structurally deficient sewers. The Sanitation Districts also schedules routine sewer cleanings to clear tree roots; remove debris; and prevent the build-up of fats, oils, and grease. To ensure the optimal schedule to minimize the chance of spills and maximize the interval between cleanings, the Sanitation Districts undertook a study to determine the appropriate frequency of sewer cleaning in a wide variety of sewer sizes.
3. Asset Life Cycle Management:  Developing a comprehensive asset life cycle management program on our wastewater collection system that includes regular inspections; condition assessments; maintenance; evaluations of risks from asset failure; and replacement planning has helped to extend the life of assets and reduce replacement costs over time. This ensures that assets are replaced when they reach the end of their useful life, rather than during failure at higher costs.
4. Utilizing Technology:  Utilizing technology such as asset life cycle models, GIS mapping, and mobile devices such as drones and CCTV can improve the efficiency and accuracy of asset management. This results in better decision-making, reduced costs, and increased productivity for the Sanitation Districts.
5. Prioritizing Assets:  By identifying and prioritizing critical assets that require the most maintenance and repair, the Sanitation Districts can focus limited resources on the assets that have the greatest impact on service delivery. This helps prevent costly breakdowns and repairs, minimizes risks, and ensures that critical assets are kept in good working order.

The Sanitation Districts collectively realize cost savings through various purchasing policies, these include:

1. Economies of Scale:  By working cooperatively, the 24 Sanitation Districts can leverage economies of scale when procuring chemicals and supplies to obtain volume discounts.
2. Piggybacking:  The Sanitation Districts will take advantage of favorable pricing when procurement is available through an existing governmental purchasing cooperative or contract.
3. Standardizing:  By standardizing the products or supplies used, the Sanitation Districts can further control economies of scale and negotiating leverage.
4. Competitive Bidding:  When possible, the Sanitation Districts use competitive bidding processes to ensure the greatest procurement value.
5. Long-Term Contracts:  The Sanitation Districts consider entering into long-term contracts with suppliers who can offer lower prices for a guaranteed volume over a period of time.

Optimizing staffing is a critical aspect of cost-saving for the Sanitation Districts. Ways the Sanitation Districts optimize staffing to save money include:

1. Joint Administration: Each individual Sanitation District is a separate political and financial entity. However, the twenty-four special districts that make up the Los Angeles County Sanitation Districts have entered into a joint administration agreement to share administrative staff. By sharing administrative staff (e.g., Accounting, Purchasing, Human Resources, Technical Services, Engineering), each District doesn’t need to hire a full complement of staff on its own, and each District only pays a fraction of the cost it would otherwise pay for maintaining a dedicated staff on its own.
2. Staffing Analysis: The Sanitation Districts conduct staffing workload analysis that can help identify where greater workforce efficiencies can be implemented. This analysis can identify areas where the agency may be overstaffed or understaffed and help determine the appropriate staffing levels. As staff positions become vacant (e.g., through retirement), those positions are re-evaluated before being backfilled with replacement employees.
3. Contract Staff: The Sanitation Districts further optimize staffing by utilizing temporary or contract employees to address temporary spikes in workload or specialized skill needs.

Sanitation Districts' staff work with municipal advisors to develop the most advantageous and cost-effective finance strategies, including:

1. Staff monitors government backed incentive offerings such as grants, low interest loans, and disaster relief funds. Recent examples include:
• California voter approved grant programs
• Air Quality Management District Grants
• California Energy Commission Grants
• California’s Clean Water State Revolving Fund Program
• U.S. Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act
• Federal Emergency Management Agency Disaster Relief Assistance
2. Staff monitors the municipal bond market and interest rate trends to evaluate whether refunding of current bonds would be financially beneficial. Since 2021, the Sanitation Districts refinanced approximately $159M of existing debts through bond issuances, resulting in a collective net present value savings of approximately $5M.
3. In 2022, the Sanitation Districts were able to use funds from a solid waste landfill post-closure fund to pay the Sanitation Districts’ unfunded accrued liability obligation in return for contributions from the Sanitation Districts to pay for post-closure costs. Since the interest on the unfunded accrued liability obligation was higher than the return received on the post-closure fund, the agreement will increase the return on the post-closure fund while saving a cumulative $250M for all Sanitation Districts.
4. Staff continuously monitors the financial health of each Sanitation District to ensure the highest credit rating possible, resulting in the lowest borrowing costs. S&P Global Ratings assigned a rating of “AAA”, their highest rating possible, on the Sanitation Districts latest bond issuance for the Joint Outfall Districts.