The city of St. Helena is responding to a scathing report from the Napa County Grand Jury by listing dozens of factual errors that undercut each of the Grand Jury’s criticisms.
Titled “St. Helena: A Small Town With Big City Problems,” the report released in June portrayed a city government that was failing to effectively manage a wide range of financial and infrastructure challenges.
The 32-page response, which the City Council will be asked to approve on Tuesday, Aug. 27, offers a virtual line-by-line rebuttal. It makes the case that the Grand Jury underestimated the city’s progress on various capital projects and based its criticisms on misunderstood financial terminology and incorrect or outdated facts.
“I appreciate the work of the Grand Jury in recognizing that there were a lot of legacy issues here,” said Mayor Geoff Ellsworth. “But I don’t know that they recognized that in the last two or three years with (City Manager) Mark Prestwich on board, we’re making significant strides on all of those issues.”
The phrase “contrary to the above referenced statement” appears 28 times in the city’s response, which was drafted by city staff. A single 12-word footnote from the Grand Jury report contains three errors, according to the city’s response.
One of the report’s central criticisms was that St. Helena’s financial forecasts are based on overly optimistic projections of revenue increasing by 15-20 percent a year. In fact, the city estimates revenue growth at 1-5 percent a year, which is consistent with recent history, the city’s response says.
The grand jury also claimed that the city’s revenue assumptions “specifically excluded” previous years where revenues declined. In fact, the city’s analysis goes all the way back to 1993 and includes recession years in 1995, 2003 and 2009, the city’s response says.
The grand jury stated that “no work has begun” at Bell Canyon Reservoir and referred to the Upper York Creek Dam project as “stalled.”
However, the city has actually completed three projects at Bell Canyon, is working on three more, and has secured funding and permits to remove (not reconstruct, as the Grand Jury put it) the Upper York Creek Dam. Phase I construction is scheduled for September-October.
The Grand Jury criticized St. Helena for failing – for “unknown” reasons – to pursue Measure A funds to pay for those projects. In fact, the city had spent its entire share of Measure A revenue on flood control.
The Grand Jury also urged the city to “follow and seriously consider” the findings of a Local Agency Formation Commission study, even though that study won’t be finished or released until 2020.
Other errors cited in the city’s response include the number of water customers outside the city limits (361, not “at least 30”), the appraised value of the City Hall property ($4.74 million, not $1 million), the cause of emergency repairs that have forced street closures (failing storm drains, not water mains), and the purpose of the Long-Range Financial Forecast (it’s a financial forecast, not a funding plan for city projects).
The water rates paid by outside customers on water contracts are not “unknown,” as the Grand Jury stated. As long as they stay within their water allocations, those customers pay the same posted rates as customers inside St. Helena, the city’s response says.
Contrary to the Grand Jury’s assertions, the bond covenants for the city’s water and wastewater bonds don’t require operations to be run on a “not-for-profit” basis and don’t prohibit the use of the General Fund for water and wastewater projects, the city’s response says.
The city disagreed or partially disagreed with all 10 of the Grand Jury’s findings and agreed with only one of the Grand Jury’s recommendations: To analyze the city’s legal services. The city already issued a Request For Proposals in June inviting legal firms to propose alternative service models, in hopes of reducing the city’s legal fees.
The report was issued by the 2018-2019 Napa County Grand Jury. A new panel took office in July.
August 20, 2019
Napa Valley Register, St. Helena Star
By Jesse Duarte
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