An 18-page section in the final Sacramento County Grand Jury Report for 2018-19 cites complaints against the Florin Resource Conservation District (FRCD) and its subsidiary, the Elk Grove Water District (EGWD).

The FRCD is among the state’s 98 resource conservation districts, and one of three such districts in Sacramento County. But it is California’s only resource conservation district that directly provides municipal water service.

Included in the Grand Jury report are alleged issues with a recent water rate increase, problems with the composition of the Board of Directors, and a general lack of oversight by those directors.

The report notes that “given the serious nature of the complaints,” FRCD underwent a comprehensive investigation by the Grand Jury.

A summary of that investigation mentions that the Grand Jury found issues with “FRCD’s shift in operations, its representation of district rate payers, its professional services contracting practices, the manner in which it conducts board meetings, a lack of oversight by the Board of Directors, a lack of general engagement by the rate payers, and other policies and procedures.”

The report also indicates that the Grand Jury was impressed with how FRCD conducted its recent water rate study, and notes that the district’s operations “normally run well.”

FRCD General Manager Mark Madison briefly commented on the report.

“We received the report towards the latter end of last week,” he said. “Our district is in the process of reviewing that report now. We do plan on issuing a response to the Grand Jury. That response will likely not be issued until August or September.”

The report’s section on the FRCD notes that a hard copy response to the Grand Jury report must be mailed or hand delivered to the presiding Sacramento County Superior Court judge by Sept. 30.

Mission, operations of water district

Among the details of the report include the FRCD’s decision to alter its mission.

While facing budget challenges in the spring of 2018, the district was in jeopardy of having its budget reserve depleted by last January, unless they took dramatic action.

With an option to dissolve the FRCD and create a new water district, the district’s board members instead voted, 4-1, to dedicate their entire budget to their water service.

That action became effective on July 1, 2018, and activities not related to water service such as resource conservation and community outreach was cut from the budget.

The report mentions that FRCD relied on a staff report for guidance, and did not seek an outside or third party analysis or recommendations, and that an outside consultant did not review the district’s status.

It is noted in the report that “the decision to look at this only from the narrow perspective of the FRCD/EGWD staff concerns the Grand Jury” and “it would be prudent, given the magnitude of change being considered, to seek out the broadest possible perspectives to ensure that all options are considered.”

The report also states that because FRCD is basically operating as a water district, it “should be acting under the provisions of the California Water Code.”

In their recommendations for the district’s board, the Grand Jury stated that the board should review their decision to alter the district’s mission, by Dec. 31, and that this action should include educating the general public and board about the differences between a water district and a resource conservation district.

This review, the Grand Jury noted, “should include the use of outside consultants and expanded public participation and engagement.”

Rate increase

There have been three general rate increases since 1999, when the Florin Resource Conservation District acquired the Elk Grove Water District.

The most recent increase became effective last January through the board’s May 16, 2018 authorization of that increase.

In the report, the Grand Jury stated that the district “erred in setting the (written) protest deadline at July 6, 2018.”

This report notes that, by law, written protests can be accepted until the public rate hearing. The public hearing for the most recent rate increase was held on July 18, 2018.

The Grand Jury recommended that, by June 30, 2020, FRCD should review its actions pertaining to the district’s most recent water rate study and rate increase approval to “ensure that future rate studies and proposals for rate increases conform to the procedures outlined in Proposition 218.”

Board meetings

The Grand Jury expressed concern about the district’s practice of holding closed meeting sessions following the public open session, instead of holding closed meeting sessions prior to open sessions.

This concern is related to the Brown Act provision that the board return to an open session to present any reportable action.

Although the board would dismiss the public before heading into their closed sessions, the Grand Jury found that the board would allow the public – “if any stayed after an indeterminate wait” – back into their meeting space for an announcement of any reportable action.

Individual rate payer representation

The five-member FRCD board currently includes two directors who live outside the Elk Grove Water District’s boundaries.

However, the report mentions, in regard to the district’s decision to concern itself with water matters only, there is the possibility that a time may come when all five board members live outside of the Elk Grove Water District’s boundaries.

That portion of the report concludes: “This has the potential to deny equitable representation to the residents and rate payers within the boundaries of the EGWD.”

It was recommended by the Grand Jury that the district consider a plan, by June 30, 2020, that would ensure that only those living within the district’s boundaries be eligible to become members of the board.

Professional services contracting practices

The Grand Jury found that the Florin Resource Conservation District failed to abide by its own policy regarding extending the current legal counsel’s contract.

That action, notes the report, “led to the creation of an unfair hiring practice.”

Due to performance issues, the district’s former legal counsel was released in June 2018, and an interim legal counsel was hired without a request for proposal. That tenure was extended for one year last December.

It was recommended by the Grand Jury that the district, by Dec. 31, create new policies related to interim contracts for professional services for the board’s approval.

Also recommended were the minimization of interim contracts and an increase in standard contracts, “using a competitive process for professional services.”

Water main break

The report additionally addresses the district’s Dec. 25, 2018 water main break that led to the loss of millions of gallons of water.

Because no automatic notification process had been established for such line breaks, a response in repairing the line was delayed.

Although most of the lost water likely traveled back to the district’s water supply, it is necessary for it to be retreated.

It was recommended by the Grand Jury that the district acquire and maintain flow meters with telemetry to alert the district about leaks or pressure losses, and to install alarm systems to inform emergency standby workers about needed repairs.