Stanislaus County Grand Jury
• 2001-2002
Reason for Investigation The Civil Grand Jury received a complaint from a resident of the town of Empire. The
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 14 findings
F1
In May 1969, the City of Modesto and the ESD entered into an agreement for the treatment of sewage from the ESD. This agreement had an expiration period of thirty (30) years, expiring in May 1999. In that agreement, the City of Modesto agreed to accept sewage from the ESD.
No recommendations for this finding
F2
In February 1999, the City of Modesto prepared an amendment to the agreement. This amendment stated the City of Modesto would agree to accept sewage from the ESD for another thirty (30) years. The agreement set the sewer charges in accordance with Modesto City Council Resolution #97-94.
No recommendations for this finding
F3
In August 2001, the City of Modesto and the ESD renegotiated the agreement and entered into a new agreement. The new agreement terminated the original contract dated 1969 and also terminated all subsequent amendments to the original contract.
No recommendations for this finding
F4
In the new agreement, the ESD agreed to pay rates corresponding to the amounts listed in Modesto City Council Resolution # 2000-581. Those amounts may be increased or decreased by the City of Modesto in accordance with future revisions made by Council resolution. The rate would be reduced by $0.92 per unit due to the fact that the ESD maintains its own system, and the City of Modesto does not perform maintenance on the system. In addition, the City of Modesto agreed to reduce the rate charged to ESD by $2.50 per unit for a period of twenty-four (24) months. The City of Modesto currently charges a billing fee of $0.30 per unit.
No recommendations for this finding
F5
Prior to 1999, the City of Modesto charged the ESD $6.99 plus an additional billing fee of $0.39 for a single family residence. In February 1999, the amount was raised to $11.29. Commencing with the new agreement, in August 2001, the City of Modesto charged the ESD $12.19 per single family dwelling (minus $0.92 per dwelling).
No recommendations for this finding
F6
On February 11, 1999, the ESDBOD increased the sewer rate for a single family dwelling from $6.67 per month to $11.29 per month.
No recommendations for this finding
F7
On June 1, 1999, the ESDBOD increased the sewer rate for a single family dwelling from $11.29 per month to $17.16 per month. 4
No recommendations for this finding
F8
On May 9, 2001, there was a proposal by the ESDBOD to increase the sewer rate for a single family dwelling from $17.16 per month to $23.17 per month.
Related Recommendations (1)
R6
The ESDBOD should engage in a public awareness program to educate the residents of Empire of anticipated sewer rate increases and the reasons why such increases are necessary. COMPLAINT #2: 6 The ESDBOD raised the rates for sewer service and did not notify residents of the proposed increase.
F9
A review of the budget and prior year=s actual income/expense statements indicated that the ESD budget shortfalls consisted of $11,224 in 1998, $9,317 in 1999, and $38,395 in 2000. Due to the $2.50 per unit refund from the City of Modesto, the budget does not expect shortfalls in the year 2001 and 2002.
Related Recommendations (1)
R5
The ESDBOD should employ a CPA or accounting firm that will inform the ESDBOD of budget restrictions, implications, and long-term impact of any proposed actions.
F10
The budget indicated the ESD had increased maintenance fees in 1999.
No recommendations for this finding
F11
Prior to 1999, the ESD had approximately $22,000-$25,000 in 90-day delinquent accounts that had not been collected. Due to collection efforts by the office manager, that figure was reduced to approximately $13,000-$14,000. These figures were reported in a letter from the City of Modesto to the office manager.
No recommendations for this finding
F12
Testimony received indicated that, prior to 1999, delinquent accounts were not being tracked or collected.
Related Recommendations (1)
R4
A procedure for collecting delinquent accounts should be formulated, adopted, and implemented as soon as possible. All customers should receive a written copy of this policy.
F13
Board meeting minutes, dated July 11, 2001, indicate the ESDBOD unanimously approved the contract with the City of Modesto dated August 2001. Because of this contract, and the $5,000 anticipated monthly refund from the City of Modesto, the ESDBOD decided unanimously to cancel its proposed sewer rate increase of May 2001.
No recommendations for this finding
F14
The City of Modesto indicated the ESD=s system was substandard based upon Modesto=s benchmarks. CONCLUSIONS The Civil Grand Jury concluded that:
Related Recommendations (3)
R1
The ESDBOD should have the City of Modesto perform a thorough examination of the sewer lines. This examination would determine what upgrades would be necessary to bring the system in compliance with the City of Modesto standards for comparable lines.
R2
The ESDBOD should consult with an expert regarding the possibility of obtaining a grant for funds to upgrade the infrastructure as indicated by the City of Modesto report. The City of Modesto has indicated a willingness to assist in this endeavor.
R3
If a grant is obtained, and the lines are upgraded, the ESD should consider contracting with the City of Modesto to take over all operations. This should result in a decrease of sewer rates to the residents of Empire.
Conclusions 20
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CL1 Page 14The ESDBOD conducted at least one special board meeting in violation of certain provisions of section 54956 of the Government Code.
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CL2 Page 5For many years the sewer rates for the ESD were kept to a bare minimum, which did not allow for long-term maintenance.
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CL3 Page 5The City of Modesto has charged the ESD for maintenance costs, while the maintenance function and responsibility rested with the ESD. This situation was rectified with the signing of a new contract dated August 2001.
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CL4 Page 5The ESD=s system is in poor condition. As the pipelines continue to age: a. There will be increased expenses to maintain them. b. The maintenance problems will be more frequent and more serious in 5 nature. c. An increasingly large amount of revenue will be needed for maintaining and upgrading the sewer lines.
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CL5 Page 6The rate increases in February 1999 and June 1999 were necessary because reserves were depleted and expenses exceeded income. There were insufficient funds to cover the operating costs of the district.
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CL6 Page 6Budget shortfalls are expected in 2003 when the ESD is no longer able to receive the $2.50 per unit rate reduction.
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CL7 Page 7The ESDBOD did not notify property owners of the intent to increase sewer rates prior to increasing rates on February 11, 1999 and June 1, 1999.
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CL8 Page 7The ESDBOD failed to comply with certain requirements of Proposition 218, Article 4.3, Section 6 (Property Related Fees and Charges), Government Code Section 53739 (Local Levies), or Government Code Section 54954.6.
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CL9 Page 9The ESD desired to recognize its employees for dedicated service.
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CL10 Page 9The gift certificates should have been made a part of employee compensation.
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CL11 Page 10Due to conflicting testimony and lack of corroborating evidence, this allegation could not be substantiated.
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CL12 Page 10The system for storing files is poor and creates difficulty in locating information from previous years.
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CL13 Page 14Part of this allegation is subjective, depending on one=s definition of Aunresponsive.@
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CL14 Page 14The ESD is composed of a dedicated volunteer board of directors and three (3) paid employees.
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CL15 Page 14The ESDBOD= lack of training in parliamentary procedure and meeting structure contributed to an unprofessional atmosphere at some public meetings.
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CL16 Page 14The hiring and routine consultation of legal counsel has had a positive impact on the processes used by the ESDBOD.
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CL17 Page 14The ESDBOD did not comply with certain provisions of Government Code Section 54953.3 related to sign-in sheets.
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CL18 Page 7The ESDBOD failed to comply with certain requirements of Government Code Section 54954.6 related to notification of residents.
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CL19 Page 14The ESDBOD has been posting meeting agendas since September 2000. Prior to this date, it is unclear if the agendas were posted. The ESDBOD was easily able to provide agenda copies from January 1999, but it is unknown whether these were posted.
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CL20 Page 11The Civil Grand Jury concluded that: The ESD and ESDBOD did not tell residents, or state in writing, that sewer rates would never increase if they paid their bills annually.
No Responses Found 2
Government entities assigned to respond to this report. No response documents have been linked in our database.
Salida Sanitary District (Stanislaus)
Special District
Stanislaus County Board of Supervisors
Elected County Office