Elk Grove Water District reviews Sacramento County Grand Jury critiques, pushes back on some recommendations

During deliberations, Elk Grove Water District board co-chairperson Bob Gray complained about the expenses of holding elections. |

At a special meeting held last night at the Cosumnes Community Services District's hearing room, the Elk Grove Water District discussed the findings of an investigation by the Sacramento County Grand Jury. The annual Grand Jury found several failures at the water district that serves many ratepayers located east of Highway 99 in the City of Elk Grove.

The investigation, which the grand jury conducted after receiving undisclosed complaints about the district's practices, was released in early July. Among the 13 findings in the investigation, 10 negatively reflect operations of the district.

Outlining the findings to the board members was the water agency's general manager Mark Madison. Going through the findings and 11 grand jury recommendations, Madison and legal counsel Richard "Ren" Nosky provided direction to the five board members on how they should respond.

In his comments, Madison said he found some of the findings such as the district is trying to reduce ratepayer debt pleasing, but he pushed back on several others. Among the more controversial findings were that all board members should live within the boundary of Elk Grove Water District and the board is not providing proper oversight of district operations and financing.

Addressing the most controversial finding, Finding 2 from the report, that ratepayers may not be properly represented because two board members live outside water district boundaries, Madison defended the practice. Madison came to the defense of two board members - Elliot Mulberg and co-chairperson Tom Gray who do not reside in the Elk Grove Water District nor are they ratepayers.

"My opinion is the FRCD board members have fiduciary legal duty to act responsibly on behalf of the Elk Grove Water District ratepayers, whether they reside in the smaller Elk Grove district or the larger area of the FRC," Madison said.

The FRCD - Florin Resources Conservation District - owns the water district and has much larger boundaries. The FRCD is a shell operation with no assets and no vital function other than it's ownership of the water district.

Board members and Madison have argued because the FRCD owns the district board members can live outside water district boundaries. Interestingly, throughout the evening's proceedings, Madison, Rensky and all five board members referenced the larger organization as the water district or water agency and not as a conservation district. 

During their discussion on this matter, the board members unanimously decided not to address the report's recommendation. That recommendation urged the district to have board members reside exclusively in the water district.

In a discussion on the finding that some board members have been appointed by the Sacramento County Board of Supervisors, one board member justified the practice and complained about the cost of elections.

"It costs us $150,000, that's what the county charges us," Gray said.

Although the final response will be approved at a future meeting, the directors followed Madison directives on their answers. Along with pushing back on a change to a ratepayer-based representation, the directors refused to comply with a recommendation they rescind health care package they awarded themselves and denied they provide poor oversight on district operations.

Additionally, they refused to accept the report's urging that they hold closed sessions at the beginning of meetings instead of at the end of public sessions as is the current practice. While they disagreed with another finding that tenets of Proposition 218 on time frames for protests of rate increases were violated, they agreed to extend them to the date of the public hearings in the future.

During public comment Sacramento County Grand Jury member Paul Lindsay instructed Madison and the board of their legal obligations to respond to all the findings and recommendations. Lindsay told them if they partially or wholly disagree with the findings it must be justified.

Two other ratepayers speaking public comment also addressed other findings. Chuck Dawson criticized the structure of the district while Lynn Wheat addressed representation.

"I truly believe that if people [board members] are going to be voting for rate increases, the ought to live within the district," Wheat said. "To be living out where it's not going to directly affect you, I don't know that is the best way for us to be represented. I am always concerned about appointments. It is going on with our Elk Grove City Council. Democracy is lost when suddenly, a few are deciding who is going to represent the most." 

Dawson argued that the conservation district exists in name only and the water district is the real business of FRCD. He noted the FRCD organization does not have any debt, the water district does, and subsequently, ratepayers are responsible for debt service.

"Every month, I have not gotten one bill since I've been here that says FRCD on it," Dawson said. "Every bill I ever paid has got Elk Grove Water District on it."

Further arguing his point that the FRCD is a figleaf for the water district, Dawson also claimed the FRCD could not hold elections "because they don't have any money." 

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

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


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