A Placer County Grand Jury released a report on “City of Lincoln Water Connection Fund” finding fees were improperly collected to the tune of $40+ million and funds were mismanaged.
Blog note: this grand jury report keeps getting attention.
LINCOLN, Calif — A Placer County Grand Jury issued a report Thursday, showing the city of Lincoln ignored rate setting regulations. As a result, the city accumulated a $41-million surplus in the Water Connection Fund (WCF) for the 2018-2019 fiscal year.
The Grand Jury recommends the City of Lincoln returns the fees. They also recommend the city council develop improved oversight of management within the city.
The report concludes "For the past 22 years there has been insufficient city council oversight of the conduct by unelected city officials. As a result, the citizens of Lincoln have been charged unjustified and excessive water connection fees. Such conduct cannot be minimized by the city's assertion of the statute of limitations."
The report largely mirrors a report issued by the California State Auditor in March. That report concluded, "that Lincoln's mismanagement of public funds, insufficient accountability, and inadequate oversight threatens its financial stability."
Jennifer Hanson is the new Lincoln City Manager. She explained the way things had previously worked.
"In the past, any fee that was established had to have a nexus study to establish what the charge of the fee is, and the cost of the fee, and why you're charging it, and who you're charging," explained Hanson. "And the city had historically not completed that study. Essentially, this is one of those long-term Lincoln issues that now needs to be cleaned up."
The nexus study is currently underway. It should be complete sometime in late June. Lincoln resident Chuck Schmidt first raised the issue of water fees.
"I began discussions with the city council members in the fall of 2013 regarding the tiered water rates and the fact that they were illegal," explained Schmidt. "They were against Proposition 218, which is part of our state constitution."
Schmidt said he had many conversations with the city council and the old city manager but he kept hitting a brick wall. He said he was made to believe he didn't know what he was talking about.
Two years ago, Schmidt, Tony Manning and other Lincoln residents founded a neighborhood watchdog group called "Lincolnites for Integrity and Fiscal Transparency" or LIFT. They said, after their issues were repeatedly raised and not addressed, they decided to file a lawsuit. That suit was settled in arbitration and the city was ordered to pay $1.7 million.
Yet Schmidt said the group continued to find more discrepancies as it continued to look into city funds. In 2018, LIFT was able to get then-state Sen. Ted Gaines to call for an audit by the state. The joint legislative audit committee voted unanimously to have the state auditor review the City of Lincoln.
Schmidt said LIFT didn't ask for the review by the Placer County Grand Jury, but he's happy with the results.
"I'm just delighted that it's coming to the attention of our citizens," exclaimed Schmidt.
Tony Manning also responded to the Grand Jury report.
"It's what we've been saying all along," said Manning. "One of the biggest things I've learned from this entire situation is I've learned the civic lesson of what organizations are out there to help people, that are kind of left with nowhere to go when their city leadership is letting them down... Everything we've been saying, the Grand Jury basically came back and vindicated what we knew all along. That the city had been overcharging its residents to the tune of millions of dollars."
Now, Manning says refunds are necessary.
"Residents have to get a refund," explained Manning. "There's no other option. Number one, there's no trust in our city right now when you look at our elected officials, right, our incumbent elected officials. The residents don't trust them. The first thing they have to do is restore the trust. The only way they can restore the trust is by giving a refund."
Newly elected councilmember Holly Andreatta said she's working to restore faith.
"My objective, first, is to restore the trust of the people of Lincoln in their elected officials," said Andreatta. "To know that we are being transparent, that we are creating a stable city hall with good financial structure and making good decisions for the betterment of the town."
When asked if it would take a total change of the city council Andreatta responded, saying, "The people need to make their voice heard. So the term for the rest of them [is] coming up in 2020. "Whether they run again, I'm not really sure. It's for the people to say."
May 9, 2019
ABC10.com KXTV
By Mike Duffy
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