Santa Clara County Grand Jury • 2005-2006

2005-2006 Santa Clara County Civil Grand Jury Report the Santa Clara Valley Water District – What’s Beneath the Surface?

Published: June 19, 2006 36 pages
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Findings and Recommendations 9 findings

F1
The District generally does a commendable job of providing water, protecting watersheds, and implementing flood control in Santa Clara County.
No recommendations for this finding
F2
Voters fail to participate actively in SCVWD director elections. Many directors run unopposed and many directors serve for multiple consecutive terms. The elected directors may not represent a broad cross-section of the population.
Related Recommendations (1)
R2
Independent voter advocacy organizations, such as League of Women Voters, public forums such as the Commonwealth Club, chambers of commerce, and news media should encourage, educate, and energize the public about the importance of participating in the electoral process. This may also provide a forum for explaining and vetting SCVWD programs for a broader set of stakeholders. 23
F3
The current statutory basis of the SCVWD includes a provision for annual Board of Supervisors review of the SCVWD budget. There is an effort under way (AB 2435) to terminate this relationship between the SCVWD and the BOS.
Related Recommendations (1)
R3
The Grand Jury firmly believes that the current oversight arrangement should not be terminated. The effective management of a service as vital to the County as water cannot be improved by reducing oversight. The reality of limited voter involvement argues all the more for retaining the relationship between the SCVWD and BOS. The BOS currently plays an active role with representatives on the Board of the Valley Transportation Authority and the Grand Jury believes the SCVWD demands similar commitment. Furthermore, the Grand Jury believes this relationship should be a model for oversight of other independent special districts in the County.
F4
Currently two SCVWD directors are appointed by the BOS and yet participate in decisions about rate setting, eminent domain, taxation, and debt issuance, without direct mandate from County voters.
Related Recommendations (1)
R4
No District Board members should be appointed. The two Board positions that are currently appointed should be converted to be filled directly by County Supervisors, who are already elected by the people. Currently two BOS members serve on the Water Commission and two on the Valley Transportation Authority Board. Participation of BOS members would serve to strengthen the link between the SCVWD and the BOS to perform the budget oversight function as well.
F5
There are strongly held diverse opinions concerning the proper role of the SCVWD and its spending. Actions by the District Board have led to projects and expenditures that are not always supported by the public or by retail distributors. These have led to heated public debates about the scope and efficiency of SCVWD operations.
Related Recommendations (1)
R5
The District needs to better communicate and vet its activities with the various stakeholders and the public. Program goals should be selected through procedures that are more responsive to these views. The District has recently begun to take steps in this direction. 24
F6
Water rates have increased significantly over time. Part of this increase is caused by higher costs and part is due to Board policies regarding future projects and allocation of costs. There are rate differentials between North and South County which raise contentious issues that are not well understood.
Related Recommendations (1)
R6
The District should clarify the reasons for rate differentials and trends among users to ensure that stakeholders, including the public, have an understanding of and confidence in the equity of rate setting practices. The District should carefully prioritize its capital projects and other costs to ensure that rate increases are fully justified by needs vetted with the Water Commission and the public.
F7
Outside auditors question some financial practices of the District. Concerns include financing the unfunded balance of the District CalPERS benefits accounts, managing year-end cash balance, and controlling cash flow. Some of these issues could save the District between $800,000 and $1.6 million per year. Critics believe the District could safely increase its return on investments.
Related Recommendations (1)
R7
The District should consult outside financial advisors to be sure it is using best practice to prudently, but optimally, manage the large amount of resources it controls.
F8
There have been substantial criticisms that reserves are excessive and inadequately justified. During the last three years, reserves have dropped significantly from $580 to $320 million. The District is currently reviewing its reserve management policy.
Related Recommendations (1)
R8
The District should clearly document its reserve management policy and justify its reserve levels to stakeholders and the public. It should also reconsider and justify the balance between pay-as-you-go and debt funding of capital projects to reduce the requirements for large reserve holdings. 25
F9
The District is implementing a number of performance measurement and improvement programs that impose extra workload on the staff. The Office of Performance Excellence had a 2005 budget of over $1.2 million.
Related Recommendations (1)
R9
The District needs to refine and coordinate its various performance measurement efforts into a smaller number of focused, cost-effective programs that can offer the most useful and tangible results to influence District operational efficiency and to define objectives. PASSED and ADOPTED by the Santa Clara County Civil Grand Jury on this 26th day of May, 2006. ________________________________ Thomas C. Rindfleisch Foreperson 26

Conclusions 98

No Responses Found 2

Government entities assigned to respond to this report. No response documents have been linked in our database.

Santa Clara County Board of Supervisors Elected County Office
Santa Clara Valley Water District Special District