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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Napa County Grand Jury • 2003-2004 • Agency Response

Response to: Napa Sanitation District

The Grand Jury was impressed by the quality and dedication of NSD's employees and management team and believes that the*

Published: August 18, 2004 9 pages

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⚠️ 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 8 findings

F1 Page 3

NSD has not reached agreement with the Regional Water Quality Control Board to renew the District's wastewater permit." RESPONSE: On August 11, 2004, the San Francisco Water Quality Control Board, State Water Resources Control Board, the Napa Sanitation District, and the Bay Area Clean Water Agencies (BACWA) reached a settlement of all three pending administrative and judicial cases. "

F2 Page 3

NSD may be in violation of regulations that require that all ratepayers pay the same fee for equivalent service." RESPONSE: District is in conformance with service fees and understands that the issue of connection fees is controversial. "

F3 Page 4

It was inappropriate for a member of the Board of Directors to leak charges against an employee to local newspapers before an investigation determined the validity of those charges." RESPONSE: The Board of Directors and District Counsel are in agreement with the Grand Jury that it is inappropriate activity for a member of the Board of Directors to disclose charges against an employee to local newspapers prior to an investigation to determine the validity of those charges. While the Board of Directors can confirm that information was leaked, we cannot confirm the source or manner in which it was leaked. "

F4 Page 5

As a result of management and employee turnover, the District lacks in-depth finance and accounting expertise." RESPONSE: It is true that there has been turnover in the finance and accounting areas. Experience levels in all areas fluctuate from time to time for a number of reasons, including employee retirement. "

F5 Page 5

The Grand Jury observed the following shortcomings in NSD's accounting practices: The Board does not review and approve the General Manager's expense reports. NSD has not conducted a physical inventory of fixed assets in several years. NSD does not have a formal system to ensure that vendors properly credit ٠ the District for returned merchandise. District accounting personnel have had difficulty making appropriate year- end adjusting entries and following auditor recommended year-end closing procedures, which indicates a need for further training of accounting staff." RESPONSE: The Interim General Manager has included all General Manager expense reports on the Board's Agenda for review since January 2004. The Board Chairman has executed approval of the expense reports. Prior to January 2004, approval of General Manager's expense reports was sporadic. There is an adopted District Resolution requiring the General Manager's expense reports to be approved by the Chairman of the Board. The last physical inventory of fixed assets the District conducted was in October 2000. Although the District did not have a formal system to ensure that vendors properly credit the District for returned merchandise, the District did have an informal procedure that was effective. The year-end closing procedure was modified during the FY 2002-03 Audit from the method used in previous years. Previously, the District's Auditor assisted in preparing the closing entries. In the 2002-03 Audit, District staff was required to prepare the closing entries without assistance from the Auditor. This modification, coupled with a new employee performing the year-end closing, created difficulties which were addressed by District staff. "

F6 Page 6

The City and County of Napa do not have a recycling program to household grease and oil." RESPONSE: NSD was not requested to respond to

F7 Page 7

NSD doesn't distribute the "Pipeline" newsletter to all residents in its service area." RESPONSE: As noted in the NSD Pollution Prevention Activities section of the report, NSD publishes the "Pipeline", a newsletter encouraging pollution prevention and providing news of District activities. The District distributes this newsletter to 23,165 out of a potential of 32,000 customers, using the mailing list associated with collection of sewer service charges. The majority of residents not receiving the "Pipeline" are residents of multi-family housing where only one sewer bill is sent to the owner of the property. In addition to directly mailing the "Pipeline" to a majority of our customers, the "Pipeline" is also included on the District's website, www.napasanitationdistrict.com, under Publications. The "Pipeline" is also available at the District's Administrative Office at 935 Hartle Court in Napa. "

F8 Page 7

The pages in District policy manuals and handbooks are not marked with revision numbers and dates." RESPONSE: District staff has reviewed all policy manuals and handbooks and determined that some older documents had not been marked with revision numbers and dates. Documents revised after 1994 did include revision numbers and dates. "

Recommendations 8

R1
Page 3

NSD should place the highest priority on reaching a settlement with the Regional Water Quality Control Board." RESPONSE: The Napa Sanitation District Board of Directors did place the highest priority on reaching an appropriate settlement consistent with the best interests of the District, its ratepayers and water quality, with both the Regional Water Quality Control Board and the State Water Resources Control Board. At its meeting on January 21, 2004, the District Board directed staff to renew settlement discussions with the Water Boards, and provided guidelines to settlement. District staff approached the Regional Board Executive Officer on January 23<sup>rd</sup> to propose settlement discussions. The first renewed settlement discussion was held February 10th, and continued regularly until settlement was reached. RESPONSE TO
R2
Page 3

Management and the Board of Directors should determine the extent to which NSD violates regulations and then take appropriate actions." RESPONSE: The Board and General Manager understand the issue raised by the Grand Jury. We recognize that this is a complex issue. The Board will direct that a legal and fiscal analysis of this issue be conducted. After receipt of this information, the Board will take appropriate action. <b>RESPONSE TO
R3
Page 4

District Counsel should brief the Board of Directors regarding their responsibilities to keep personnel matters confidential. Violations of this policy should result in censure and/or dismissal." Response: District Counsel has in the past and will continue to advise the Board of Directors of the confidential status of personnel matters and of their fiduciary responsibility to maintain that confidentiality. If the confidential personnel information was acquired by being present in a closed session authorized by the Ralph M. Brown Act and then disclosed to a person not entitled to receive it, without authorization from the Board of Directors to disclose the confidential information, that constitutes a violation of Section 54963 of the Brown Act. Violation of Section 54963 can result in penalties as described in that section. These penalties do not include censure or dismissal. Unauthorized disclosure by a Board member of confidential personnel information that was acquired outside of a closed session does not constitute a violation of the Brown Act. However it does constitute a violation of the Board member's fiduciary responsibility. If necessary, the District may petition a court of law for an injunction, enjoining the Board member from such disclosures in the future. While the Board likely has the authority to censure one of its member directors, dismissal would be the responsibility of the appointing body, either the Napa City Council or the Napa County Board of Supervisors. - RESPONSE TO
R4
Page 5

NSD can remedy this problem in a variety of ways, including providing additional training for existing staff, hiring outside consultants, or hiring more experienced staff." RESPONSE: The District continually provides training for all its employees, including staff performing the finance and accounting functions. The District has contracted with the County of Napa to provide accounting, auditing and/or consulting services, in order to provide financial transactions, and to provide additional accounting, auditing and/or consulting services as requested. District and County staff are currently discussing areas in which the County can provide assistance to the District. Additionally, the District has hired a Financial Consultant to prepare a Financial Master Plan and Revenue Program. RESPONSE TO
R5
Page 6

NSD should take the appropriate steps to address these issues." RESPONSE: As noted above, the General Manager has and will continue to include expense reports on the Board's Agenda for review. District accounting staff has been directed to ensure proper execution of expense reports. District staff has met with the County Auditor to discuss improvements in the method the District uses to perform a physical inventory of fixed assets. The District will prepare a Physical Fixed Asset Inventory Procedure, that will include addressing the frequency of performing asset inventory, and perform the physical inventory in accordance with the approved procedure by April, 2005 and annually thereafter. On August 4, 2004, the Board approved a formal Merchandise Return Policy. It will be added to the District's Accounting and Purchasing Procedures Manual. District staff has gained additional experience and training since the previous year-end closing. Additionally, the County of Napa will provide assistance with year-end closing in accordance with our accounting, auditing and/or consulting service agreement with the County. RESPONSE TO
R6
Page 6

The City and County of Napa should expand their recycling programs to include household grease and oil." RESPONSE: NSD was not requested to respond to
R7
Page 7

NSD should distribute the "Pipeline" to all residents in its service area." RESPONSE: The District has researched a number of options and determined that it could increase distribution by using a combination of different mailing lists. By using a combination of lists, distribution should include virtually all District customers. The District will revise its mailing list to include these additional residents. RESPONSE TO
R8
Page 7

NSD should mark manuals and handbook pages with revision numbers and dates." RESPONSE: District staff has reviewed all policy manuals and handbooks and added revision numbers and dates where that information could be determined. District practice since 1994 has been to include the revision dates. The District will continue with this practice for all future revisions. -2004 WATER REPORT RESPONSE TO

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.