A Case of Mistaken Identity? Grand Jury slams practices, governance at Elk Grove Water-Florin Resources District

UPDATED 8 a.m.

In their annual 2018-2019 report which was released last week, the Sacramento County Grand Jury made numerous recommendations to the Elk Grove Water District-Florin Resources Conservation District (FRCD) including one that urges the district to have all elected board members reside in the district they are representing.  

The report on the water district is titled A Case of Mistaken Identity? 

The Florin Resources Conservation District - which exists in name only - owns the Elk Grove Water District following the purchase of the previously privately held utility in 1999. The FRCD was formed by a popular vote in 1953 and backed by local farmers and is one of 98 conservation districts in California and the only one that owns a water company. 

As the area governed by the FRCD in south Sacramento County and Elk Grove developed and had less agriculture, the district's role diminished. Following the 1999 purchase of the water company, the district has morphed into the water purveyor for about half of Elk Grove residents west of Highway 99, and the conservation mission has disappeared.

In their introduction, the Grand Jury said they received numerous complaints alleging "issues with a recent water rate increase (improper and misleading notices, procedural errors), problems with the composition of the Board of Directors, and a general lack of oversight by the Board of Directors. Given the serious nature of the complaints, the Sacramento County Grand Jury undertook a thorough and comprehensive investigation of the FRCD, covering many aspects of its operations."

Because the FRCD's district boundaries are larger than the service area of the water district (see map above), the five board directors are not required to be in-district-ratepayers, rather only within FRCDs area. The report notes that "Over the last 18 months, the FRCD approved a major shift in mission and operations, foregoing its resource conservation duties and focusing only on 'all future activities, performed by the Florin Resource Conservation District be limited to water-related activities that provide a benefit to Elk Grove Water District ratepayers, effective July 1, 2018.'"

When the district approved a rate hike one year ago, the Grand Jury found only two of the five board members lived within the ratepayer area. It was noted if the board of directors allows this practice to continue, water rates could be determined by a majority of representatives not living in the water district service area.    

As a recommendation, it said "FRCD should consider, by June 30, 2020, a plan to ensure that only those people living within the EGWD boundary are eligible to become Board members. Board members should be elected from within EGWD boundaries to ensure equitable representation of the population served."
EGWD Chair Tom Nelson. 

In all the Grand Jury had 13 findings of deficiencies and made 11 specific recommendations. By law, the chair of the water district board, Tom Nelson, must respond in hard copy by mail or hand delivery by September 30, 2019, to David De Alba, Presiding Judge Sacramento County Superior Court.

The FRCD's newest director Elliot Mulberg said he disagreed with the Grand Jury's findings. Mulberg, who was appointed to the board by the Sacramento County Board of Supervisors when there were no candidates who filed to run for a board vacancy in 2018 and does not live in the confines of the Elk Grove Water District, said the district is in compliance with state law.

"The Elk Grove Water District really isn't a district, its a figment of our imagination, we had to call it something so we had to call it that," Mulberg said. "It's really part of the Florin Resources Conservation District."

Mulberg also disagreed with the Grand Jury's assessment that the FRCD's only function is service to Elk Grove Water District ratepayers. He noted the district is studying the possibility of starting a groundwater wastewater recharge program to replenish area aquifers.    

Other notable deficiencies the Grand Jury found following interviews with the board members was what could be characterized as the lack of intellectual engagement by the five directors. Although no elected official is required to have any expertise to any representative body to be eligible to serve, the report nonetheless noted the deference the directors give to Elk Grove Water District's general manager Mark Madison.

The report criticized the five directors for "relinquishing a board member position on the Sacramento Central Groundwater Authority (SCGA), a Joint Powers Authority started to manage groundwater usage, and appointing the General Manager as FRCD’s representative." Additionally, the Grand Jury stated some members "displayed little, if any, operational knowledge, deferring to the General Manager. These responses suggested a certain amount of deference was afforded to the General Manager in the area of operational activities."

Furthermore, following the interviews of the board members, the report said, "It is the practice of the FRCD to issue an 'FRCD Board Members Guide Book' to each new member of the Board. The Guide is thorough and extensive, but it was apparent that several Board members did not review or use it."

It concluded its assessment of the directors' lack of engagement by saying "It is the Grand Jury’s belief that members of the Board of Directors must have a basic operational knowledge of their District in order to make reasoned, sensible, and informed operational, administrative, and planning decisions."

Other areas where the district was criticized was in the flawed approval process of a health care plan for board members that was seemingly for the benefit of one of the directors. Although the directors approved the benefit, it was not implemented, but it can be done so in the future without any further public discussion. 

The report noted that when the district fired its previous outside counsel, it hired a new attorney without generating requests for proposals. That new outside counsel, Richard "Ren" Nosky has a troubled employment history and was associated with Madison while he was the City of Stockton's water and sewage manager who headed a failed attempt to privatize those services. 

Along with Mulberg and Nelson, the other three board members are Sophia Scherman, Bob Gray, and Lisa Medina.  

The 13 deficiencies and 11 recommendations can be viewed here. The entire report on the district is available here.

The next meeting of the Elk Grove Water District is at 6 p.m. on Wednesday, July 17 at their office at 9257 Elk Grove Boulevard.

Updated at 8 a.m. with comments from Director Mulberg. 

Copyright by Elk Grove News © 2019. All right reserved.

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Eye on Elk Grove said...

Former city of Elk Grove Planning Commissioner Paul Lindsay is a member of the Sacramento County Grand Jury. Anyone who has ever had any interaction with Lindsay knows how respected he is.

So I really doubt there is no merit to the grand jury findings. The FRCD very part-time board voting themselves medical benefits is just one of the counts and the grand jury recommends oversight. You think!

People have often said that we need "another Paul Lindsay" on the Elk Grove City Council. When they served together on the planning commission, it was Lindsay who kept Pat Hume at the top of his game. No lazy thinking, or not being fully prepared, on Lindsay's watch and Hume knew it all too well.

D.J. Blutarsky said...

A Mulberg here, a Scherman there, one by one they are getting their people in place!

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