News Archive

4/26/12 & 4/30/2012 AWA Board Meeting Minutes

  • AWA Annual Audit Still not in Agreement with 66013 Fund Report (Again)

    After the public presented over $600,000 in discrepancies between the annual audit and other AWA financial reports on March 22, 2012, AWA did not explain the differences or bring the audit for approval to the April 12th meeting. Again, on the April 26th meeting there was no explanation of why the audit was not up for discussion.

    Before the meeting, RPA members asked AWA for additional accounting information and AWA was unable to produce either the balances or the account numbers of the restricted funds that did not reconcile in the audit. Without account numbers there is no easy way for AWA to track the amount of funds received or how much of the funds were used for their specific purpose.

    There are some new account numbers that have appeared on the latest AWA chart of accounts. Those new accounts will have to be filled from other accounts where restricted funds have been intermingled with unrestricted funds. Because the restricted funds have been collected over decades, remedying the problems will require extensive examination.

  • GSL Update Full of Inaccuracies, Excuses, Insults and Accusations

    The board discussed an update on the status of the GSL project and General Manager Gene Mancebo asked for an additional $50,000 and 224 hours of staff time to continue preparations and studies for the GSL. After being asked to provide the information at the 4/12/2012 meeting, Mancebo still was not prepared to give the amount spent to date for the GSL project. The report had inaccurate information and used excuses, insults and accusations to take the blame for poor planning off of AWA.

    The report was written by AWA employee Eric Christeson and blamed delays and cost overruns on land owners that are refusing easements for the GSL. In the report, Christeson stated that one land owner “parroted” another land owner’s views. The report also accused “outside parties” of contacting landowners to foil easement negotiations.

    50% of the cost overruns were blamed on work that had gone “stale” due to the ratepayer’s successful June 2010 rate protest. RPA member Ken Berry spoke to the Board saying “This excuse is fabricated. In December 2010, AWA staff told their board that the GSL would be ready to bid for an additional $70,000. You are making an excuse that doesn’t hold water. The question is: Why did you put the project on hold in 2011 after spending the $70,000 to have it ready to bid?”

    Subsequent research showed that as of March 10, 2011, the GSL project was on schedule to be put out for bid after expending the $70,000 authorized. On April 28, 2011, then President Don Cooper announced that work had been suspended pending consolidation of all the water systems. That decision was made without the participation of the Board, and no Board members expressed any concern about the delay.

    Newly appointed director Rich Farrington (appointed to fill the seat vacated by Don Cooper) stated that the needed 224 hours of staff time were not really a cash outlay. RPA member Bill Condrashoff explained to director Farrington that time spent on the GSL would take time from staff to do other duties or require the hiring of additional staff and that costs money. Mancebo told the board that the 224 hours of staff time would cost about $100,000. Later, director Toy corrected Mancebo. The public agreed with Toy's $10,000 calculation.

    Condrashoff pointed out that AWA is not meeting their existing loan agreements with USDA. AWA is far short of meeting the debt service reserve requirements that are clearly spelled out in the Buckhorn Water treatment Plant and the Plymouth Pipeline loan agreements. He also pointed out that AWA has been funneling ratepayer funds into a GSL debt reserve account, without AWA board approval, for a loan that has not even been approved by USDA.

  • AWA Community Facilities Districts Put Ratepayers At Risk

    The AWA board discussed a complicated new program that will place ratepayers at risk for millions of dollars. Two "Community Facilities Districts" (CFDs) are planned. As so often is the case with big government programs, the names are misleading.

    One CFD is to fund the Gravity Supply Line (GSL) with property taxes. In 2010, Central Amador Water Project (CAWP) system ratepayers overwhelmingly rejected the GSL project (of those who stated an opinion, 98% opposed the 23% rate increase required for the GSL). Gravity is better than pumping, but the GSL does not replace any pump, and the debt service is greater than the pumping cost. The GSL CFD does not benefit the existing community of residences, but rather the community of developers that would increase the population upcountry by a factor of 3.

    The other CFD is entirely different and complicated -- as befits a big government program. First, only special interests will be allowed to vote on forming the CFD. Only property owners with land that they want to develop in the Amador Water System (AWS) can participate. (AWS includes all of the incorporated Cities in Amador County.) If a property owner joins the CFD, they will have to pay a special tax to help pay off the Amador Transmission Pipeline (ATP) from Lake Tabeau to the Tanner Treatment Plant. That project was supposed to be paid for by new development, but caused a huge rate increase for existing ratepayers instead.

    Why would a land owner voluntarily pay a special tax for something they were not using? They would not- no rational business owner pays for services and materials that they do not receive, unless there is some indirect benefit. In the case of the AWS CFD, there is another special tax involved. The second tax is for "Phase I" of a regional water treatment plant. You see, the AWS pipeline supplies enough raw water to triple the population in the service area, but the amount of treatment is severely limited.

    If a property owner opts to pay both special taxes, he or she will be guaranteed that they will be supplied water regardless of whether AWA has the capacity to do so. You might think the AWA Directors are doing something like repealing the law of gravity if they are promising to deliver what they do not have. But looking closer it is worse.

    First of all, the property owners in the CFD will not pay for any regional treatment plant. They will only pay for "Phase I", which is a temporary solution using a used treatment plant that Livermore charged $25,000 for. AWA considers it to be worth $1 million.

    There is excess capacity in the Ione and Tanner treatment plants in the sense that more water could be treated than is currently being consumed. But that excess capacity has been promised to projects that have been approved. AWA ratepayers have an enforceable legal obligation to provide that capacity to the people it is promised to. Those promises are not intentions, but legal documents on which the owners of the projects can get loans and make other contracts for the development of their projects.

    So what will happen if the temporary used treatment plant turns out to be worth what Livermore wanted for it, and not the great deal AWA staff bragged about? Well, then the people in the CFD will get their water from the existing treatment plants. And when the other developers already promised water come to get theirs, a new plant will have to be built by the ratepayers to honor the commitments that exist now.

    Both CFDs are give-aways of ratepayer money to developers who refuse to pay their own way. The CAWP CFD is just another ratepayer-financed boondoggle like the pipeline that is the subject of the AWS CFD. The AWS CFD purports to address the mistakes of prior Boards of Directors by giving away even more to special interests.