The AWA Board reviewed their draft response to the scathing Amador County Grand Jury report on AWA operations. Board members asked for changes that would better justify their support of the $14 million GSL project. The public pointed out misstatements in the AWA response, and asked that it be rewritten transparently and accurately, not as a PR piece.

The board rescheduled the topic for a special meeting on August 30 so that they could review any changes to the AWA response before submitting it to the Grand Jury. At the August 30 meeting, the Directors authorized staff to make additional changes without review by the Board.

RPA will report on AWA’s final response in a later issue of The Watchdog.

The AWA Board added some unbudgeted “fill-in” projects to keep AWA employees busy, despite General Manager Gene Mancebo requesting additional employees just weeks earlier because his staff is overloaded. RPA member Bill Condrashoff asked, “Do you see a contradiction here?” Board member Bob Manassero quickly replied “No.”

The agenda item came to the board because Bill Condrashoff pointed out that the supposedly “overloaded” AWA staff reported working on unbudgeted projects to “fill-in” employee time. The “fill-in” work occurred just weeks after the Board passed the 2012-2013 budget, which is supposed to establish how AWA will expend public funds.

All five Board members approved adding the “fill-in” projects to the 2012-2013 workload. None of the Directors was concerned that expending resources on non-budgeted projects means that budgeted projects will not have sufficient resources. RPA is concerned that even larger rate increases will soon be necessary. The Directors obviously did not include all of the projects that they intend to pursue in the budget, but that budget is the basis of the rate increases approved last July.

RPA is also concerned about the choice of “fill-in” projects. Those who regularly attend Board meetings will recall many pictures of deteriorating equipment in the upcountry CAWP system, such as pictures of leaky tanks with dowels stuck in the holes and water pipes rusting because because they have not been painted. Yet the “fill-in” projects do nothing to address deferred maintenance. The rate structure approved by the Directors on July 26 defers 75% of the maintenance needed in the water systems.

AWA says that staff absences make it impossible to work on budgeted projects, so the remaining crew works on “fill-in” projects. It seems like painting pipes would be one example of a good alternative project, if there were nothing else in the budget to work on.

Upcountry AWA Director Rich Farrington told local resident Bill Condrashoff that it would be “unduly burdensome” to listen to recorded comments that Condrashoff made at a meeting just five days earlier. Farrington was present at the meeting but did not take notes when Condrashoff spoke to the Board. The director remained silent when he could have asked Condrashoff to clarify his remarks. Farrington said nothing when Board President Gary Thomas hurried Condrashoff through his comments to meet a 5 minute time limit.

Since Thomas has been President, the Directors have strictly enforced a 5 minute time limit, no matter how complex the issue. Farrington recently advocated reducing the public comment time to 3 minutes. The Directors rarely have any questions, and treat listening to their constituents as an inconvenience.

AWA’s attorney, Steve Kronick, made a presentation concerning a public request for communications between AWA and their auditor. Kronick told the board that they could refuse to provide the communications because it would have a “chilling effect” on future staff deliberations.

Why would disclosing facts about public financing have a “chilling effect”? In this case, the reason is clear -- staff has mismanaged public funds and apparently cannot straighten out the books. Ratepayers have been overcharged as a result. This story came to light when RPA’s Bill Condrashoff found discrepancies in monthly financial reports that had been produced for years. AWA stopped producing those reports when the discrepancies were pointed out, so Condrashoff asked the Director who represents him, Paul Molinelli, to obtain the reports. Instead of helping his constituent, Molinelli took the matter to the full Board, and the Directors agreed they did not want to hear about discrepancies and denied Condrashoff’s request (20120905_Feb9_Minutes.pdf).

The information in question is supposed to agree with “66013” reports, which are named after the Government Code statute that requires them annually. AWA only produced the 66013 reports after Condrashoff repeatedly asked and then threatened legal action if AWA did not supply them. The 66013 reports that AWA produced are not consistent with each other or with other AWA financial documents.

Two ratepayers then filed suit in Amador Superior Court to simply require AWA to produce accurate reports. AWA General Manager Gene Mancebo told a reporter that the ratepayers should just have asked him for accurate reports, but 6 months later, AWA has still not produced consistent reports. Mancebo did not explain to the reporter, or the public, why inconsistent and inaccurate reports were published in the first place.

Also 6 months ago, AWA’s auditor presented the draft audit for the 2010-11 fiscal year to the Directors in a public meeting. When questioned about the discrepancy with the 66013 reports, the auditor had no explanation. After a lunch break, the auditor presented new figures prepared by staff during the break and said he believed the discrepancy was resolved. He promised to be back soon, after he had checked the new figures.

After several weeks went by with no news, RPA’s Ken Berry (who is also one of the ratepayers who filed the 66013 lawsuit) made a public records request for the communications exchanged with the auditor. AWA’s Attorney sent Berry a letter saying that disclosing most of the communications would interfere with AWA “deliberations” on how to correct the inaccurate reports.

AWA has not exchanged any financial information with the auditor months after supposedly fixing the problem. That is clear because strictly factual information, such as contracts and facts about financial transactions, are not “deliberations” on how to deal with the apparently uncomfortable facts.

Berry told the Watchdog that “If AWA is communicating with their auditor and none of the communications include financial data, they must be figuring how to cover up AWA’s financial state.” He went on to say “The communications should simply include the corrected numbers from AWA and then the auditor can do his job. If they are not giving the auditor accurate information, what is the auditor working on?”

In June, AWA paid their auditor (Leaf and Cole) $5,000 beyond the original contract agreement for the audit. General Manager Gene Mancebo said there would be additional payments to the auditor. He did not give an amount, nor did he explain what had gone wrong with the lunch break correction.

It is important to understand that the Directors are covering up more than emails that presumably would embarrass (and therefore “chill”) AWA staff. AWA is continuing to fight a lawsuit whose only objective is to have legally required reports be accurate. AWA can make that suit moot by simply producing an accurate accounting of certain public funds. Producing accurate 66013 reports would also allow the auditor to complete his audit. It is not clear how the auditor can correct the draft audit without accurate information, but AWA staff is still deliberating about that.

AWA staff admits that they improperly mixed up funds. If that is the reason accurate reports cannot be produced, why doesn’t AWA simply explain that to the Court and ask for time to sort the records out? Neither the Court nor the ratepayers could object because there is no alternative, if the public is to ever know what happened to their money.

The Directors could and should have ordered their staff to correct the reports 6 months ago. Now they agree with their Attorney that letting the public know what happened to their money will have a “chilling effect”, even if the Directors are also in the dark. If AWA staff were to report to the Directors, that report would be public. The Directors apparently feel their role does not include active oversight of public finances, if that oversight will discomfort their staff.