Long before there were water districts or a half dozen state agencies breathing down their necks, people in California banded together to create water supplies in a state that is mostly desert.

The tool they used to accomplish this was a process first used in England in the 1600s and perfected by Benjamin Franklin when he created the Philadelphia Contributionship, a mutual share company in 1752, to fund the city’s volunteer fire brigades. It is still in business today as the oldest successful insurance company in the U.S.

California’s first mutual water company formed in the early 1800s in Los Angeles. Today there are five hundred such nonprofit shareowner run Californian organizations, who serve 1.3 million people, 3.5 percent of the state’s population. As hamlets became towns and towns became cities, some mutual water companies gave way to city-owned water departments and investor-owned utilities.

Today, California’s mutual water companies provide water service in rural areas that have no alternative supplies, and in urban pockets where property owners continue to hold mutual water company shares and liability for the integrity of the water system. 

CalMutuals Offers ECA New Market Opportunities

There is an interesting group that represents 80 percent of the mutual water companies at the state and local level—the California Association of Mutual Water Companies (CalMutuals)—which the Engineering Contractors’ Association recently joined as an associate member to help promote their activities and bring a new class of customer to our members’ attention.

Since its creation in 2013, CalMutuals has grown from 14 founding Los Angeles County members to nearly 400 statewide with a special concentration from the Central Coast and Central Valley regions in addition to our SoCal region.

CalMutuals demonstrated its legislative prowess in 2015 by encouraging passage of Assembly Bill 656, which specifically authorizes a mutual water company to enter into a joint power’s agreement with a public agency to create the provision of insurance and risk-pooling, technical support, and other similar services for the purpose of reducing risk liability. That authorization led directly to the creation of the CalMutuals’ Joint Powers Risk and Insurance Management Authority (JPRIMA) which provides a level of protection for small mutual water companies that they were unable to affordably obtain before.

We hope to join with CalMutuals to engage legislators in understanding the role of mutual water companies and other water issues.

By Ray Baca, Executive Director Email: [email protected]