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How California Drought Impacts State’s Coin Laundry Industry (Part 1)

CHICAGO — Utilities—chiefly expenses related to water and sewer rates—remain the highest expenditure for many coin laundry operators.

“The water and sewer costs for the average coin laundry is somewhere between 10-15% of their gross income on a monthly basis,” says Brian Brunckhorst, owner of Advantage Laundry, Hayward, Calif., and president of the Golden State Coin Laundry Association (GSCLA).

This reality has become even more apparent for coin laundry operators in California, as the state’s drought conditions have worsened in recent times, prompting Gov. Edmund G. “Jerry” Brown Jr. to officially declare a drought state of emergency in January 2014.

As conditions worsened, Gov. Brown issued a series of executive orders necessary to address California’s severe drought conditions, ultimately leading to his most recent order of a statewide 25% reduction in water usage—the first ever in the state’s history.

As residents and water municipalities in California implement strategies to better conserve water in light of this mandate, professionals in the state’s coin laundry industry have begun to not only explore ways they can cope, but also what this 25% reduction in consumption means for their coin laundry business.


Gov. Brown’s executive order of a statewide 25% reduction in water consumption stems from the California Department of Water Resources’ survey of the Sierra Nevada snowpack on April 1, finding that the statewide snowpack held only 1.4 inches of water content—just 5% of the historical average of 28.3 inches.

The state is now in its fourth year of extreme drought conditions, with the 2014 water year considered as the third driest in the state’s 119 years of records, according to the U.S. Geological Survey.

The 25% reduction in consumption amounts to saving approximately 1.5 million acre-feet of water over the next nine months, according to the governor’s office.

Currently, location agencies can fine those that waste water up to $500 per day, according to the California State Water Resources Control Board.

“The State Water Board can issue cease and desist orders against water agencies that don’t impose mandatory conservation measures upon their retail customers,” according to a document issued by the State Water Board. “Water agencies that violate cease and desist orders are subject to civil liability of up to $10,000 a day.”


How does this 25% reduction translate to the local coin laundry industry?

“Certainly, [operators’] water bills are going to be substantially higher,” says Beverly Blank, president of the Southern California (SoCal) Coin Laundry Association.

Blank explains that not many operators in the local coin laundry industry are as aware as they should be regarding the issue.

“People will be quite shocked when they see the increase in their water bills, and maybe then they will take the necessary actions,” she says.

Brunckhorst explains that water municipalities have fixed operational expenses.

“Their operational expenses aren’t going to decrease if [water] consumption decreases,” he says.

Therefore, if water consumption decreases in accordance with the 25% mandate, “and their revenue is based on consumption, then the amount that they charge for the water needs to increase,” according to Brunckhorst.

“As coin laundry operators, utilities are one of our largest expenditures,” he says. “If their utility prices are going to go up … any fiscally responsible business is going to have to pass that increase in expenses on to the customers.”

GSCLA members have already begun to raise washer prices in light of the current hike in utilities, he adds.


As drought conditions persist, the California State Water Resources Control Board issued another order in early June related to the insufficient water available for senior water right holders, with a priority date of 1903 or later, in the San Joaquin and Sacramento watersheds and the Delta.

This order ultimately forces these water right holders—like farmers in the area—to reduce their water usage, with violators facing fines upwards of $1,000 per day and $2,500 per acre-foot of water unlawfully diverted, among other possible fines.

Can operators expect local agencies to impose such regulations on the local coin laundry industry?

“I can’t imagine that would happen,” says Brunckhorst. “The reason is because coin laundries fulfill a basic necessity on having clean clothes. It’s a public service that we’re providing.”

Kurt Archer, salesman at California-based distributor Western State Design, agrees.

“We provide a service to those who don’t necessarily have it. And, so, it’s going to be difficult from a health standpoint for [regulators] to do a whole lot of regulation against the coin laundry industry because, really, the only option we have to survive is to raise prices, which, in turn, affects people that can’t afford to have those prices raised on them,” he says.

“Our whole business is water,” adds Blank. “And if we don’t have ample water, we are out of business … We are providing a health service for the public, because if they can’t do their laundry at home, because it’s expensive, we certainly have the equipment to take care of it at a much more practical rate than what they have at home.”


In defense against heavier restrictions, Brunckhorst stresses Blank’s point that commercial washers in many vended laundries are much more water-efficient than in-home washers.

He cites an American Water Works Association Research Foundation study that found that 21.97% of the average indoor water usage in homes is from clothes washers.

“Most of the washing machines that are at home today are the old, top-load-type washers [that] typically will use anywhere from 34 to 40 gallons of water per cycle,” says Brunckhorst.

“The newest, front-loading commercial laundry equipment … those will often use anywhere from 11 to 12 gallons [of water].”

“When you look at the large-capacity washers, the gallons per pound that we use to process linen is considerably less than if they were to go to Mom’s house or go to the apartment laundries,” says Archer.

“So if [customers] were to leave us, what would happen is the water usage would go up by 25%, rather than down to 25% that California is looking for.”

Check back Wednesday for the conclusion!

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(Photo: ©iStockphoto/Ximagniation)

Have a question or comment? E-mail our editor Bruce Beggs at [email protected].