Santa Barbara County 1998-99 Grand Jury Report
Goleta Water District
Released June 3, 1999
The Grand Jury investigation into the Goleta Water District resulted from customer complaints concerning district operations, public access to committee meetings and possible violations of the Ralph M. Brown Act (Government Code Section 54950).
To inquire into the process used by the Goleta Water Board, to determine if the standards of the districtís mission statement are being met, whether board members comply with the intent of the Brown Act and whether board members exhibit an understanding of district finances.
Interviews were conducted with complainants, members of the Goleta Water District Board of Directors, the General Manager and previous members of the board of directors. Additional interviews were conducted with staff of the Santa Barbara County Planning and Development Department, previous district employees and other water and sewer special district staff in Santa Barbara County.
Numerous documents from other districts (i.e., agendas, minutes, rate and fee studies, annual financial audits and financial records) were reviewed. Included in the investigation were tours of the district facilities and of the reclamation facilities of the Goleta Sanitary District. Grand Jury members also attended district board meetings and consulted with the District Attorneyís office as well as the Superior Court legal counsel.
Background and Mission
The Goleta Water Districtís mission statement is as follows:
"To provide an adequate supply of quality water at the most reasonable cost to the present and future customers within the Goleta Water District."
The Goleta Water District was established as a special district in November 1944. The district encompasses 32,000 acres extending along the south coast of Santa Barbara County west from Santa Barbara cCity limits to El Capitan State Beach. The district maintains approximately 250 miles of pipe serving an estimated 75,000 people. The Goleta Water District maintains 24 ground-water wells throughout the district and owns treatment plants, pumping stations and other facilities. The district, in cooperation with the Goleta Sanitary District, also provides reclaimed water.
The special district was formed to establish a legal entity that could enter into contracts with the Santa Barbara County Water Agency (SBCWA) to provide a water supply for the community. Since July 1997, the Goleta Water District and its neighboring communities have been connected to the State Water Project by a 144-mile pipeline.
A board of directors governs the Goleta Water District. There are five elected directors serving staggered four-year terms. Positions on the board, such as President, Vice President and various committee appointments, change each year in December. The district employs a general manager/chief engineer and forty employees. Operations include water treatment, meter maintenance and repair, water-quality testing, infrastructure development and maintenance and customer support services.
The Brown Act was enacted so that public agencies would be required to transact business in an open forum. The Goleta Water District board of directors is an elected body whose meetings must comply with the Brown Act. During interviews complainants alleged that the board had not complied with those requirements.
Under limited circumstances, the Brown Act allows for the Board of Directors to meet privately and discuss matters in order to carry out their responsibilities in the best interest of the public. These exceptions are limited to three areas: the discussion of personnel matters, pending litigation, and real estate negotiations.
Under the Brown Act, all meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend and speak at any meeting. The legislation also requires 72-hour advance notification to the public of a meetingís location and time as well as all items to be considered at the meeting.
The Brown Act recognizes that most legislative bodies conduct much of their business based upon recommendations made by committees composed of less than a quorum of the group. The act imposes differing requirements on committees based on their purposes and intent. Specifically the act divides committees into two groups and defines conditions and requirements for each:
The complainants alleged inconsistencies regarding public access to district information. Incidents were cited of committees being changed from standing committees to ad hoc committees, improper public notice of district meetings, last-minute agenda changes and the inappropriate use of closed sessions, all of which preclude public input. In the opinion of the Grand Jury, this could be viewed as an evasion of the requirements of the Brown Act by the Goleta Water District's board of directors.
During the Grand Juryís investigation, some of the allegations noted here were brought to the attention of the District Attorneyís office, which is charged with enforcement of the Brown Act within Santa Barbara County. The District Attorney's review and this report offer the Goleta Water Board the opportunity to review its policies on public access and repair its public reputation.
Minutes and Agendas
The minutes of the Goleta Water District board meetings do not provide a clear public record of the districtís activities. The Grand Jury found them difficult to decipher. Minutes are restricted to motions and dispositions, with no frame of reference for the actions or synopsis of discussions upon which the actions were based. This approach to the public record of meetings is contrary to actions taken by most legislative entities and does not reflect the actual proceedings. Incomplete recordkeeping fails to provide backup for district decisions when clarification of actions is required.
The referral of tasks to ad hoc or standing committees could not be determined by reading meeting minutes and agendas. Portions of the board minutes dealing with committee reports provided no detailed information regarding the content of those committee reports. The Goleta Water District also does not maintain minutes of its committee meetings which would inform the public of its proceedings.
The Grand Jury, during interviews with board members, became concerned about the member's lack of understanding of the districtís financial status. A review of board minutes indicated that there is no regular review of financial activities or budget status. For example, the board does not routinely review or approve payment activity by staff. There are no reports regarding the status of payables and receivables or on budget performance or the status of capital accounts. Neither the finance committee nor staff members provide board members with a thorough understanding of the districtís financial condition.
Minutes from other districts reviewed for comparison purposes were found to adequately disclose their financial status to their public and boards.
It was also observed that members of the Goleta Water Board do not attend the presentation of the annual independent auditorís report. The auditor made several recommendations in the most recent financial audit, which the board has taken limited action to implement. One recommendation addressed the fact that the district does not bother to reconcile its bank statements. The Grand Jury believes the inattention to financial matters demonstrates a lack of fiscal responsibility on the part of the board of directors.
Reclamation Plant Finances
The investigation brought out concerns about expansion of the reclaimed water project. The reclamation plant was constructed during a time of extreme drought and a moratorium on water hookups. The project was designed to free up potable water for the benefit of the entire community. The principle revenue to support the project comes from potable water users who enjoy the benefits of the freed-up water. The Grand Jury applauds the effort of the district to maintain an environmentally friendly means of providing reclaimed water for such uses as golf course and parkway irrigation.
The Grand Jury interviews showed the Goleta Water Board lacks a working knowledge of the financial and physical relationships among reclaimed, agricultural and potable water. Water policy rates and service hook-up fees for reclaimed water are not standardized. Data provided to the Grand Jury indicated that rate-making proceedings have not been published or arrived at in public view. Significant Goleta Water District funds have been spent over the years on water rate studies, yet board members have consistently ignored the expertsí opinions on the subject. New water-service rates were apparently based on subjective social concerns rather than the capital and operating costs associated with the reclamation plant. While the Grand Jury recognizes that government agencies can and often should factor social considerations into their decision-making, it believes that these factors should be disclosed to its customers. The Goleta Water District did not make a full disclosure of the basis of its rate setting.
Conflict of Purpose
During this investigation, there were questions raised about the use of the districtís name and funds for membership in special-interest organizations. The districtís legal counsel in the past has warned board members of potential conflicts. Membership in such special-interest organizations implies district support of such groupsí purposes. This draws the Goleta Water District board of directors into land-use and governance issues that are not central to the district's mission statement or necessarily supported by its constituents. Since water is no longer an impediment to development, the Goleta Water District's involvement in growth management is inappropriate.
A further example of the districtís digression into land-use and governance issues is evidenced through its responses to requests for water service for new development. According to staff of the Santa Barbara County Planning and Development Department, Goleta Water District responses to such requests are arbitrary, inconsistent and dependent upon the districtís view of potential projects.
During the course of this investigation, the Goleta Water District board of directors decided to convert a majority of its standing committees to ad hoc committees. Use of ad hoc committees to conduct routine business is not in the best interest of the public, nor does the Brown Act allow it. This allows the board of directors to continue to make decisions through a less-than-public process. The board of directors is required by law to conduct business in an open and public forum.
The Grand Jury found meeting agendas and minutes to be lacking in substance.
The board of directors has not demonstrated an understanding of district finances. Monthly revenues and expenses are not critically assessed in board meetings. The lack of fiduciary discipline gives rise to the opportunity for misuse of district resources and inappropriate rate setting.
The mission statement for the Goleta Water District focuses on the delivery of water. The board of directors has drifted from this specific direction to encompass community development and Goleta governance issues.
The Goleta Water District is less than diligent in executing "open meeting compliance" in accordance with the Brown Act. District meetings are improperly noticed to the public.
The Goleta Water Board should: (a) Post agendas for all meetings, at least 72 hours in advance, in designated locations such as the Goleta Library, community news publications and the district web site. (b) Hold closed sessions only for special agendized items permitted by the Brown Act. (c) Tape all sessions of the board and retain the tapes for a period of one year. Tape recordings should be clearly audible.
The minutes of the Goleta Water District meetings do not provide a comprehensive public record of the districtís activities.
The Goleta Water Board should prepare and retain minutes reflective of board and committee meetings.
The Goleta Water Board redefined most of its standing committees as ad hoc committees, which appears to be an evasion of the Brown Act.
The Goleta Water Board should review the provisions of the Brown Act with an eye to definitions of committee status in order to avoid having its actions perceived as deliberate avoidance of Brown Act requirements.
The Goleta Water Board minutes do not incorporate information from advisory committees in sufficient detail for the public to understand the recommendations and the subsequent decisions made by the board.
The Goleta Water Board agendas and minutes should faithfully record the recommendations of advisory committees. Minutes should include enough information to assure the correct and complete understanding of the issues covered during committee meetings.
Goleta Water Board members are not fully informed about the status of the districtís finances.
The Goleta Water Board should ensure that comprehensive financial status reports are provided and reviewed on a monthly basis.
The Goleta Water Board rate-policy proceedings are inconsistent and potentially inequitable to customers. Public disclosure for participation in rate-policy proceedings is not adequate.
The Goleta Water Board should depend on staff specialists and consultants to prepare standard rate policy based on factual and financial information and provide full disclosure to district customers.
Required County Planning and Development Department requests for services are delayed or rejected for reasons beyond the purview of the board.
The Goleta Water Board should ensure that action is taken on all requests for "can and will serve" commitments within ten working days of receipt.
The Goleta Water Board does not limit its activities to those established in the mission statement for the district. Activism beyond the requirement of the mission statement dilutes the time and money resources of the district. Issues of community governance and land-use appear on the board agendas.
The Goleta Water Board should limit its focus and activities to providing highest quality water at the most reasonable cost.
Goleta Water District Board of Directors