12/13/2012 AWA Board Meeting Minutes

  • Amador Water Agency Hires Help for Accounting Problems

    After 9 months of trying to sort out the accounting problems at AWA, General Manager Gene Mancebo told his board that he needed outside help. Mancebo told the Board that he would be spending another $5,000 on an unidentified consultant to help him with the problems. At previous meetings, Mancebo’s attempts to explain huge accounting discrepancies uncovered by the public have all led to the public uncovering even more problems with the accounting.

    Over the last nine months, AWA has used over $250,000 of ratepayer money on financial consultants, from which ratepayers have received no benefit:

    • AWA paid Robert Reed $135,000 for a consolidated rate study that still has not been finalized due to a last minute change of plans on the Mello Roos tax assessment to pay for the Gravity Supply Line (GSL).
    • AWA agreed to pay SCI, the consultant that set up the tax assessment district, $140,000. After that work was complete and a hearing for the tax was scheduled, the AWA Board changed its mind and now AWA is looking for an alternative plan to pay for the GSL.
    • AWA paid a consultant $30,000 for an agency audit. In March, AWA failed that audit due to accounting issues that are still unresolved 9 months later. Since then, the auditing firm has been paid $5,000 more to work with AWA staff on a plan the AWA Board will not disclose.
  • AWA Agrees to Take Ownership of PG&E Water System

    The AWA Board agreed to a contract with PG&E that transferred ownership and all responsibilities for the PG&E-owned Tiger Creek Water Facility to AWA. AWA will be responsible for servicing and maintaining the system, which is located deep within the Mokelumne Canyon.

    PG&E required AWA to take over responsibility for the aging system in exchange for the work that PG&E would be doing related to the GSL. PG&E will be allowing AWA to use PG&E land, allowing connection to PG&E facilities, and working on acquiring an amendment to the PG&E FERC license agreement.

    AWA has no intention of treating the Tiger Creek water system like all other water systems within AWA. Although the Tiger Creek system will no longer be an outside system, it will be treated as one and many of the common costs with other AWA systems will be paid by those other systems. Because the Tiger Creek system is needed to go forward with the GSL, it shows how the GSL costs will be subsidized by all water customers even if they do not benefit from the GSL.

  • PG&E Contract Forces AWA to Maintain Upcountry Pump System

    The AWA Board voted to sign a contract with PG&E that will leave AWA no choice but to continue to rely on the current Upcountry pumping system, whether or not the Gravity Supply Line (GSL) is constructed. AWA claims that the pump system and its pipes are failing, and uses those claims to justify the GSL as a lower cost option than replacing the existing pump system. With the signing of the new contract, it is apparent that if the pump system is in need of replacement, it will have to be replaced with or without the GSL.

    None of the AWA cost comparisons to determine the feasibility of the GSL have considered that the pump system will be needed if there is an outage from the flume that would supply water to the GSL. AWA has claimed that building the GSL would be less expensive than replacing the existing pump system. With this new contract in place, if the GSL goes forward, ratepayers will pay for both the GSL and the pump system upgrades. With the additional cost of replacing the pump system added to the cost of the GSL, going forward with the GSLwill cost much more than the cost of replacing the pump system even with the federal grant and loan. The GSL will clearly not be a cost-effective project.

    The contract states that AWA will not be allowed to use the Tiger Creek Regulator reservoir for water storage. AWA staff and Board members have told the public that AWA will be able to use the water in the reservoir in the event that the flume is shut down for maintenance or if the flume fails. Using the false information, AWA justified not using the cost to replace the pump system in the GSL cost estimates. If the GSL goes forward, ratepayers will eventually be surprised by rate increases greater than 60% to pay for both projects.

    There is yet another reason that the existing system will need to be maintained or replaced. AWA intends to gain rights for a maximum water flow of 10 CFS; the contract will only allow AWA to divert 5 CFS into the GSL. When more than 5 CFS is needed, water will need to be delivered using the existing method of pumping from the Tiger Creek Afterbay. Without pumping the water as it is done now, AWA will have no way to divert more than 5 CFS.