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Goleta Water District Wades Through Budget Details

A workshop is held ahead of Tuesday's board of directors meeting to consider whether to adopt the proposed budget

Within the esoteric world of municipal water districts, most people need a glossary to follow what’s going on. So, at its budget planning workshop last Thursday, the Goleta Water District passed out a glossary of the myriad acronyms used to describe the agencies and processes that make up its day-to-day work.

Roughly following the same format as a groundwater supply management workshop the district held last month, Thursday’s meeting gave district staff, board members and ratepayers an opportunity to make comments and ask questions regarding the budget prepared by district staff under General Manager John McInnes’ relatively new right-hand man, Assistant General Manager George Eowan.

Board President Bill Rosen suggested that the district’s budget process had evolved significantly during the past few years, having gone from relatively opaque to more transparent with insufficient documentation, and finally morphing into the current effort to create a comprehensive document within an open process.

As with public agencies all over the region, the district has found itself having to take a hard look at budget numbers. With a drop in revenues last year and continually increasing costs, the district staff took what McInnes called a “zero-based” approach, starting from scratch and placing into the budget only the items essential to the district’s mission. In past years, he said, budgets have been expressed in terms of percentages of increase or decrease based on previous budgets.

“This was a budget balanced without any rate increases; however, as the five-year funding plan shows, the district is severely undercapitalized. Rates will have to be raised in the future,” McInnes said.

The district faces a list of capital improvement projects, budgeted repairs and preventive maintenance. A six-month, $13 million contingency reserve is also budgeted, because unexpected costs — such as when ash and sediment from the 2007 Zaca Fire nearly doubled the district’s water treatment costs — can arise at any time.

The reason for impending rate increases stemmed from the proposed budget’s five-year funding plan. With nearly 6,000 valves in the water system, along with many other pieces of physical infrastructure needing repairs and maintenance, the five-year outlook for maintenance stands at nearly $60 million. Director Bert Bertrando noted that if the plan is approved, it has the potential to increase rates nearly 30 percent.

Although he estimated that the district will take in nearly $26 million in revenue during the next fiscal year, Eowan noted that the science of projecting future revenues is shaky at best. With the state’s economy in a shambles, many public commenters expressed concern that his revenue predictions wouldn’t hold up over the next few years.

Jack Ruskey, a retired litigator and regular attendee of the district’s board meetings, went so far as to call the projections “wildly optimistic,” a sentiment echoed by a cadre of his supporters also in attendance at the workshop.

District staff pledged to work hard to reduce expenditures, but in the next fiscal year alone, five major capital improvement projects totaling $500,000 are called for — most of which are necessitated by projects undertaken by other agencies interfering with water infrastructure — although at $4.2 million, personnel costs trump most others.

“People are our most important asset,” said Eowan, pointing out that while the district hasn’t cut any positions, neither has it added any new ones.

The controversy left in the wake of the departure of former chief financial officer Eric Ford remains a hot topic among many ratepayers. Gathering behind Ruskey’s rallying cry, several people demanded that the settlement made with Ford — when he resigned amid a barrage of accusations that he had lost significant amounts of district money through a series of shady and ill-defined financial transactions — be rescinded to save the district $100,000. The sum included holiday, vacation and sick time payouts, as well as a settlement apparently intended to prevent legal action from Ford for breach of contract.

“This is an outrage to the public, there’s no accountability and it’s a cover-up,” Ruskey shouted at the board, voicing objection to the details of Ford’s resignation being handled in closed meetings.

Ann Crosby urged more caution, asking that the board put off adopting a budget, and arguing that doing so at this week’s scheduled special meeting would not allow enough time for the board to better understand its details.

Although two agenda items related to State Water sales and the district’s consumer confidence report were continued until Friday, Director Bert Bertrando commended McInnes and his staff for their work in formulating the budget.

“This is the first time that I’ve been on the board that I understand what we’re doing,” he said.

A special meeting of the Goleta Water District’s board of directors, in which it is expected to decide whether to adopt the staff’s proposed budget, is scheduled for 5:30 p.m. Tuesday in the district’s board room. Board members vowed that in the meantime, they will make a comprehensive review of all public comments and board member questions.

Noozhawk staff writer Ben Preston can be reached at .(JavaScript must be enabled to view this email address).

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