A damning grand jury report released Wednesday says the Santa
Clara Valley Water District has ignored previous warnings about its
lack of accountability and has made no effort to become more
transparent or cost effective.
A damning grand jury report released Wednesday says the Santa Clara Valley Water District has ignored previous warnings about its lack of accountability and has made no effort to become more transparent or cost effective.
“In essence, they’re spending money that could be better used,” said Santa Clara County Civil Grand Jury Foreman Don Kawashima. “They have no oversight, and I don’t think they’ve been totally up front in the way they present their materials.”
The four-part report, entitled “Santa Clara Valley Water District Awash in Cash as County and Cities Drown in Red Ink,” recommended the agency establish an independent public review committee to provide oversight for the district’s board of directors. It also said the board – which ignored previous audits and investigations concluding it had no accountability – should develop a policy for how it spends property taxes, and should regularly monitor the district’s income and expenditures. The district provides drinking water and flood protection for about 1.8 million Santa Clara County residents. Its budget for fiscal year 2009-2010 is about $305 million.
“The public requires assurance that what the district spends, and subsequently collects from the public, is actually reasonable and necessary,” the report said.
District officials said they are still processing the grand jury’s findings and will respond next month. Board chairman Sig Sanchez said there are some “inequities” in the report, but would not discuss details.
“We’ll take a worthwhile examination and report back to the community,” Sanchez said. “Some areas we’re already doing the things they’re recommending, and that’s the importance of our having time to review and respond in detail.”
The grand jury found that the district led a misleading campaign to promote the district’s “Clean Safe Creeks” special property tax in 2000. The report noted that a committee led by district employees Rick Callender and Susan Pino to promote the tax failed to disclose $190,000 in campaign contributions and were punished with a $24,000 fine. Callender is still employed as the district’s government relations manager.
Furthermore, district salaries continually exceeded those of comparable agencies, the investigation noted. The agency currently employs about 750 full-time employees.
Directors of the district should be subject to term limits, the report suggested, noting that current directors have served an average of 15 years each. In March, the directors voted to put the question of term limits on the November 2010 general election ballot.
The district has been plagued by controversy in recent years and the grand jury report cited a list of previous reports that made similar conclusions. Those included two grand jury investigations in 1989 and 2006 and two critical financial audits. The district has not responded to the recommendations in those reports, though the most recent investigation noted that recent actions are “a step in the right direction.”
Specifically, the appointment of interim CEO Olga Martin Steele led to budget cuts of $11 million in 2008. Current CEO Beau Goldie and other district officials said they plan to be more fiscally prudent, pointing out that this year’s budget includes about $24 million in cuts and is more than $100 million lower than last year’s budget.
Officials pointed out that the directors chose not to raise groundwater charges this year for the first time in almost a decade, largely because of customers’ concerns about spending and the difficult economy.
To address the concerns of oversight and transparency, Goldie plans to involve the public more often in district decisions.
“The public needs to understand how their monies are being used and for what purposes and what benefit,” said Goldie, who started as CEO June 1.
The Llagas Creek Flood Protection Project in southern Santa Clara County is specifically mentioned in the grand jury report as an example of district inefficiency, as the project has been in the planning stages for more than 40 years but is not complete. Goldie noted a key factor delaying that project has been the lack of available federal funding, as the U.S. Army Corps of Engineers is the lead agency on the $80 million-plus project.
Wednesday’s grand jury report includes detailed criticism of three projects for which the district either spent more than was budgeted, or were unnecessary for the district’s stated objectives.
These projects were the $1.38 million Gold Street Education Center in Alviso, a new water quality laboratory in San Jose that was completed at about $13 million more than its original estimate, and the $22 million Alviso Slough Restoration Project, which cost more than available alternative proposals.
“Why are they spending a million dollars on (the Gold Street facility) in Alviso when Morgan Hill could use the money to fix the Llagas Creek flooding issues?” Kawashima said.
