Rio Linda Water Board is responsible for District Woes, Grand Jury Says

By Cathy Locke
clocke@sacbee.com
Published: Monday, May. 16, 2011 - 12:27 pm

If operation of the Rio Linda/Elverta Community Water District isn't substantially improved by Dec. 31, its board of directors should institute voluntary receivership proceedings, move to merge with a neighboring water district or allow the operation to be sold, according to a Sacramento County grand jury report.

The grand jury issued the 17-page report today outlining the district's "legacy of dysfunction".

A year after the 2009-10 grand jury issued a report that stated the district faces an "uncertain future," that future remains uncertain, according to the 2010-11 grand jury. Most of the recommendations in last year's report have not been implemented because the district's board of directors has not taken the required actions, the new report says.

"Ultimately, the direction and management of the district is the responsibility of the board of directors," the report states. "The grand jury found grave concerns about the performance of the board of directors (the Old Board) that held office until December 2010. Whether the board that took office in December (the New Board) will be able to overcome the legacy of dysfunction and improve the district is uncertain."

The 2010-11 grand jury found that oversight of the district's finances is so lax that "the door is open for fraud an abuse." Weaknesses cited in the report include poor financial records, lack of an audit since 2008-09, lack of accounting polices and procedures, weaknesses in budgeting and financial oversight, and high turnover in general managers.

The report says that the district has significantly reduced its cash and has not issued comprehensive financial reports since the 2007-08 fiscal year. The district depleted both its restricted and unrestricted cash from approximately $2.5 million in 2004-05 to $377,000 in 2008-09, the report says, adding that cash balances for 2009-10 had yet to be published.

The grand jury found that the board of directors has repeatedly failed to hire and retain a qualified general manager.

"Several general managers interviewed by the grand jury did not appear to have the training and skills necessary to perform the function of the chief financial officer," the report states.

The district last month hired Mary Henrici, former head of the East Quincy Services District in Plumas County. Henrici is the ninth manager to run the district in less than five years.

The district has been cited by the state for operating an unsafe water system, and has a moratorium on new construction because of inadequate water pressure. It has begun construction of new wells to improve the low pressure, which can lead to water poisoning and hamper fire fighting.

The grand jury report notes that the state Department of Public Health and the Sacramento Local Agency Formation Commission, which oversees government reorganizations, is trying to help the district solve its problem. The report states that LAFCO has strongly suggested that the district board consider entering voluntary receivership, or seek management and operational oversight from other water districts.

The district must submit a written response to the report's findings and recommendations by Aug. 14.

Read more: http://www.sacbee.com/2011/05/16/3630894/rio-linda-water-board-is-responsible.html#ixzz1MZnp2QTj