Wednesday, June 15, 2016
[Shasta County] Grand jury finds problems with county water agency
The Shasta County grand jury found numerous problems with the Shasta County Water Agency that led to unsafe water, losses to taxpayers totalling $31,654 and one county service area brought to the brink of insolvency due to the county overcharging it for water.
The 2016 grand jury report placed some of the blame for the problems on a lack of checks and balances brought on by the same employees overseeing and approving their own work. That comes about because the county Public Works Department long ago folded in the Shasta Water County Agency, and public works employees take on dual roles of working on behalf of both the county and the water agency.
The grand jury recommends the Shasta County Board of Supervisors look into forming a new agency to oversee the management of county service areas and, among other recommendations, audit all financial records related to billing.
Titled "Water Matters" the grand jury report reviewed the county's management of municipal services for Castella, Jones Valley, Crag View and Keswick and how customers are billed by the Shasta County Water Agency.
What the report found was that in the last two summers, the county bought more water than was needed or used from the McConnell Foundation. In one case, it purchased more water from the McConnell Foundation to carry one service area for two months that exceeded what the CSA uses in an entire year. And because the contracts required the service areas to "use it or lose it," many acre-feet of water were bought but never used nor saved for future use.
Altogether, the over-purchasing of McConnell Foundation water and billing discrepancies — the county undercharged one service area for the water — the county lost about $31,645. That amount includes refunds the grand jury says it owes to two service areas.
Crag View is due a refund of $1,450 for overcharging in 2014 and $7,142 for 2015, according to the grand jury findings. Keswick is due a refund of $16,872 for 2014.
Those overcharges nearly drove Crag View CSA into insolvency, the grand jury found.
Bob Wheeler, Crag View resident, said he hopes the county can refund the approximately 70 customers in his neighborhood for all the overcharges and mishandlings.
"There are a whole lot of issues that have to be identified. They haven't been treating it right," said Wheeler.
Wheeler's neighbor, Colleen Batman, said Crag View residents contested a rate change last year and paid for that with severe water restrictions over the summer.
"We caught on to that and we were punished. Most of the personal gardens were destroyed. At this point those intimidation tactics are not going to work on us. We're going to fight as long as they're breaking the law," said Batman.
Half of the CSAs reviewed had overcharges, billing errors, over-purchases of water and lack of segregation of duties by Public Works, the report found.
The grand jury also found that Crag View water exceeded safe levels of two disinfectants added by the Public Works Department in 2014. Promises to reduce the chemicals in the water were not made, instead levels increased, according to the grand jury report.
The grand jury also questions whether an automatic rate increase is legal if water is being purchased from the McConnell Foundation, a private entity. Current law allows automatic rate increases when water is purchased from another public agency, but is silent on rules regarding purchases from private suppliers. The grand jury tried to run this by the Shasta County District Attorney and the county counsel, but were unable to determine any type of conclusion.
The grand jury called on the county to make the Water Agency independent from Public Works.
In 2013 residents of Jones Valley requested county supervisors look into separating the Water Agency from Public Works, but were denied. Instead County Executive Officer Larry Lees was directed by the board to work with the Jones Valley residents.
That follow-up never happened, said the grand jury report, but cash balances of the Water Agency could cover the cost for employees and expenses for an independent agency.
The county Board of Supervisors is expected to take up the grand jury report at a future meeting.
June 13, 2016
Redding Record Searchlight
By Nathan Solis