The Mendocino County Grand Jury issued a report last week that confirms what many observers already knew. The Ukiah Valley Sanitation District is being mismanaged, is about to stick it to their rate payers, violates the Brown Act and has acted irresponsibly over its lawsuit against the city.
After taking a look at the San District’s actions – without the assistance of the San District which refused to sign needed confidentiality agreements allowing the grand jury to proceed and denying Public Records Act requests from the grand jury – the investigators saw a district woefully in over its head financially.
Here are just some of the things the grand jury found:
– Due to limited staffing and high turnover, the District has not demonstrated the capability to responsibly manage its business and financial affairs. Failure to provide audited financial reports for five years (2014-2018) further demonstrates this lack of capability.
In the absence of staffing continuity with technical and financial expertise, the District has used expensive attorneys and consultants to conduct day-to-day business and negotiations with the City.
– The District claims the funds paid to them by the City are for damages. This is misleading. Of the $16,415,296 paid, $11,431,986 were from existing District reserves held by the City on the District’s behalf. To avoid further legal expense, the City agreed to pay the District $4,984,310 over five years. This amount is substantially less than the legal costs of the lawsuit to the District. The difference will be paid by the District’s ratepayers.
– The City no longer holds any of the District’s reserves.
– The District’s claim that it can save over $1.5 million per year by assuming responsibility for the billing, maintenance and sewage treatment for its ratepayers is not supported by any documentation.
– Future changes allowed in the settlement could trigger redundant expenses to be borne by all ratepayers. These include detachment of the overlap areas by the City and the District’s assumption of their billing, maintenance, and sewage treatment.
– The MOU/JPA proposed by the City is intended to provide a cost effective solution to the ongoing disputes between the City and the District by operating as a single system with the same rate structure applying to all customers.
– The District has violated the intent of the Brown Act which has reduced transparency for District ratepayers.
– The $23 million combined legal costs and lost opportunities to refinance the bond will be borne by the City and District ratepayers.
The grand jury made it clear that it is the San District’s fault that the sewer plant bonds were not refinanced as the city wanted to do, which is now costing the ratepayers. They also point out that it makes no sense for the San District to continue to try to duplicate services – like billing and expensive management – that the city already provides. And, they note that since the District has used up much of its reserves on legal fees, they stand a chance of not being able to pay their bills moving forward, which will also hike rates over and above whatever rate they may agree to with the city.
The San District’s path is clear: agree to the offer from the city to operate as a single system with uniform rates. The majority on San District board has done enough damage. It’s time for them to stop whining about the city and start thinking about the ratepayers.
June 30, 2019
Ukiah Daily Journal
By UDJ
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