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    Environmental, Public Works, & Special Districts

    Environmental, Public Works, and Special Districts Committee

    The Environmental, Public Works and Special Districts Committee has a number of local and county government entities, as well as over 110 special districts, subject to review. Special districts vary in size from very small to large operations. These districts may be formed for fire protection, water, recreation and park, sanitation, food, cemetery, reclamation, mosquito abatement, sewer maintenance, utilities, levee maintenance, irrigation, community service, resource conservation, and county service districts. The Sacramento Municipal Utility District and the Port of Sacramento are two of the larger special districts.

    Several functions in Sacramento County government such as the Public Works Agency, Department of Airports, and Environmental Management Department address many environmental issues on behalf of the residents.

      · The Public Works Agency alone oversees programs involving over 100 different fees as revenue sources. These programs include: public infrastructure planning, real estate services for the County of Sacramento and others, management of water resources and water quality (water supply system and infrastructure, drainage system, etc.), waste management and recycling, transportation system maintenance and improvement, and building design and inspection.
      · The Department of Airports oversees not only the Sacramento International Airport but also Executive, Mather and Franklin Field airports, offering services for the residents and others.
      · The Environmental Management Department oversees hazardous materials incident prevention and response, regulation and enforcement, as well as toxic site mitigation. The Department also provides environmental health oversight to ensure consumer protection, solid waste management, and water protection.
      · The five cities within Sacramento County provide environmental services, which fall within the purview of this committee.

    With such a large oversight responsibility, this committee investigated complaints, looked at grand jury concerns and previous grand jury recommendations. In addition, some government operations were reviewed for a base of knowledge. The following summaries and reports provided insight into the operations and findings of these important entities.

    Department of Airports

    When visiting Sacramento International and Mather Airports, one can see evidence of the planned expansion at both sites. The Sacramento County Grand Jury deemed it worthwhile to visit both sites. On October 30, 1997, the Grand Jury visited Sacramento International Airport and on February 25, 1998, Mather Airport.

    In 1963, the Sacramento County Code created the Department of Airports, consisting of:

      · Executive (opened 1930)
      · Franklin Field (training field from World War II)
      · Mather (opened 1995)
      · Sacramento International (opened 1967)

    The County Board of Supervisors serves as the governing body overseeing airport operations. The Department is self-supporting since the revenue used to finance operations is from rents, concessions, charges for use of the airport facilities including landing fees, and interest income with no city, county or state tax funds. Airport operations provide an annual economic impact of over $1 billion for the County. The airports employ over 2,500 people and provide for over 7,500 local airport-related jobs.

    Sacramento International Airport

    Sacramento International is the principal air service center for Sacramento County and a wide region surrounding the County. Passenger traffic at the airport has increased by 92.5 percent since 1990. According to a study conducted by the United States Department of Transportation, this airport is ranked fourth in percentage growth between 1990 and 1995 among United States airports. As such, it is a major contributor to the County's economic development program.

    The services to more than seven million passengers yearly will be greatly improved with the opening of the new terminal. According to airport officials, there will be improved customer service with light and open public areas, and a variety of shops and restaurants. There will also be children's play areas and comfortable lounges. By the year 2000, a 5,000-car parking facility will be erected. These additions at the airport should be a source of pride for county residents.

    Sacramento International consolidated all rental car operations to a separate facility and streamlined the bus system to transport people to parking lots and rental terminals. According to airport personnel, this system saved over 1,250 daily bus trips and 1,600 driving miles. This, in turn, reduced bus emissions by 61 percent. The system is a model for other airports and assists in the traffic flow. There are no Sacramento Regional Transit services to the airport; however, Yolo County offers a $1.00 bus service from Davis and Downtown Sacramento to the airport. Super Shuttle is available as a 24-hour door-to-door service for Sacramento's metropolitan area residents.

    Mather Airport

    In May 1995, Mather was opened as an air cargo and general aviation facility. According to airport officials, Mather should become Northern California's premier air cargo center. The emphasis is on large air cargo transport rather than general aviation. Only a portion of the former Mather Air Force Base is now in operation as Mather Airport. There have been many projects to enhance this operation, including the completion of an operations building, dedicated in March 1998. Current air cargo tenants include: Airborne Express, Emery Worldwide, DHL, Burlington Air Express, United Parcel Service, as well as the California Department of Forestry, and the County's Sheriff and Sacramento City Police helicopter operations. The airport encompasses 2,875 acres containing two runways.

    The Grand Jury was made aware of some major issues at Mather Airport by airport management. Among these are:

      · Despite the fact that there is no federal or state requirement, airport staff need to establish a staffed, on-site emergency and fire response facility to provide services for base property and tenants. Airport management is working with the County's fire protection services to secure emergency and fire services; or, provide for storage of emergency response vehicles at the airport.
      · The Federal Aviation Administration (FAA) should staff and operate a control tower. FAA does not consider new tower operations at airports with less than 200,000 annual take-offs and landings. Mather currently has 25,000.
      · To date, FAA has declined to provide a navigational and weather reporting system. Since the systems are critical to air cargo carriers, the expense has been assumed by the Department of Airports even though fuel taxes are collected and transmitted to FAA.

    The Grand Jury supports the County's efforts to continue to encourage Congress to have FAA assume its duties at Mather Field. The current pursuit of a duty-free zone appears consistent with Mather's mission.

    Executive Airport

    Sacramento's Executive Airport encompasses 522 acres. Over 300 people are employed at this airport and the economic impact on the area is over $50 million annually. This airport provides general aviation services including fueling, aircraft parking, aircraft and avionics overhaul and repair, aerial photography, aerial medical airlift, air cargo, aircraft charter, insurance, maintenance training, management, sales, aircraft washing, flight instruction, pilot supplies, and FAA written exam testing.

    Airport officials stated that this airport is not generating enough revenue and is subsidized by other Department of Airport operations. This past year Executive was subsidized by approximately $80,000. However, long-term projects are in progress to enhance Executive's viability. Runway and taxiway rehabilitation, aircraft washing facility and security fencing improvements, along with completed construction of 20 additional shade hangars for small aircraft, will enhance the airport. Marketing efforts have included an annual fair and advertising in west coast general aviation publications. In July 1997, a new restaurant was opened.

    Franklin Field

    Franklin Field is located in the southern part of Sacramento County. This general aviation reliever airstrip is used primarily for training.

    Electricity Restructuring

      Sacramento Municipal Utility District

    Electricity is a $23 billion industry in California, which has some of the highest rates in the nation. This impacts the residential customer, but more profoundly, industry advocates argue that the high cost of energy has a negative effect on business in California. The Sacramento County Grand Jury wanted to learn more about electricity restructuring, in that it affects the residents of Sacramento County.

    In 1992, Congress began discussing deregulation, and California's Public Utilities Commission ordered deregulation in 1995. At that time, a coalition proposed modifications and the Federal Energy Regulatory Commission accelerated the process. The California State Legislature implemented legislation in 1996 and became the first state to allow consumer choice. The law provided specific guidelines for restructuring the electric services industry in California by 2001. The intent of the law is to:

      · Lower the cost of electricity through competition and allow consumers to shop for the most competitive supply of energy.
      · Retain and attract jobs (legislation provided for retraining, retirement, and other benefits for displaced workers).
      · Avoid power outages through the establishment of an independent system operator (ISO) who schedules electricity transmission over a statewide grid. The ISO must adhere to specific reliability standards. In addition, competitive generators work though a power exchange.

    The restructuring directly affects investor-owned utilities such as Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric, which delivers 70 percent of the power in California. This will affect over 32 public-owned utilities, which are governed by locally elected councils and boards such as the Sacramento Municipal Utility District (SMUD).

    In 1994, California's investor-owned utilities averaged 50 percent higher system rates than the national average. Under the new law, investor-owned utilities should have already provided a ten percent reduction in electricity costs to residential and small commercial rate payers with an additional ten percent by 2002. As a public-owned utility, SMUD has not had to provide such a reduction. According to SMUD officials, their rate is already 20 percent below the national average and 21 percent lower than California investor-owned utilities, as is traditionally the case with public utilities.

    Public-owned utilities such as SMUD will need to assess the impact of restructuring their operations for long-term investments. Items to be considered include: protection of the environment, continued research and development, adequate power sources, fair pricing, and protection for the lower-usage consumer.

    Congress is conducting hearings to consider changes in the industry that may preempt individual state initiatives. Meanwhile, California's consumers ponder their choice of doing nothing or changing their electricity provider.

    Port of Sacramento

    Background & Observations

    On November 14, 1997, the Sacramento County Grand Jury toured the Port of Sacramento. This visit was particularly unique in that it was a joint tour with members of the Yolo County Grand Jury. This allowed both grand juries to appreciate the regional aspects of the Port facility as well as providing an opportunity for the two bodies to inspect the Port's activities.

    In operation since 1963, the Port is located in West Sacramento at the end of a 47-mile, deep-water channel, which parallels the Sacramento River. The Port's facilities are located on approximately 150 acres of land. It is situated 79 nautical miles from San Francisco.

    Upon receiving its first ocean-going vessel, Taipei Victory, on June 29, 1963, the Port became a host for international trade. This Nationalist Chinese ship was destined for Okinawa with 5,000 tons of bagged rice. Additionally, 1,000 tons of logs were loaded atop her decks for shipment to Japan.

    Today, the Port is shipping a wide variety of both loose and bagged commodities to distributors in the Far East, Near East, and Europe. Commonly exported products include: rice, wheat, safflower, wood chips, logs and clay, as well as other products in lesser volume. The modernization of rice loading techniques has reduced from weeks to days the time needed to move cargo from the adjacent warehouses to the ships.

    The Port is able to receive whole logs and ship them intact or process them on site into wood chips. They are well monitored to reduce the threat of combustion. The piles of wood chips are easily seen by motorists traveling on the nearby freeways.

    Opened within the past year, the Palamidessi Bridge provides improved vehicle access to 280 acres of Port-owned property. Located directly across the water from the Port, this land is intended for industrial development. The North and South Port Property areas provide a variety of parcel sizes, waterfront and rail access, and business uses that should benefit its development potential.

    Not only is the port-owned harbor property being put to commercial use, there is additional contiguous property for expansion. The City of West Sacramento has recently rezoned the area south of the harbor for development. This undeveloped land provides one of the Port's best opportunities for expanding its revenue base. Adjacent to the Port is a designated Foreign Trade Zone, which offers importers various financial incentives. Custom duties may be deferred by either storing commodities in warehouse space or reduced by remanufacturing the goods on site into products with different levies. The acreage along the length of the channel is being developed for wildlife relocation as an environmental mitigation measure.

    With increased capacity for bulk storage and cargo loading, the Port is well positioned to address the shipping needs of anticipated growth in rice exports to Asian markets. Rice industry analysts project a doubling of such exports during the next five years. However, the 32-foot depth of the deep-water channel limits access to the Port. This restriction prevents deeper draft vessels, such as container ships, from entering - thus limiting the potential for some additional business opportunities.

    Sacramento Area Flood Control Agency

    In the past twelve years, the Sacramento region has experienced serious flooding, especially in 1986, 1995, and 1997. Concerned with the projected weather forecasts associated with El Niño, the Sacramento County Grand Jury met with the Sacramento Area Flood Control Agency (SAFCA) on October 14, 1997, to discuss flood protection.


    After the floods of 1986, it became apparent there were major issues in the Sacramento Region involving flood protection. In 1991, a Joint Powers Authority was formed to deal with flood prevention management issues along the levees of the American River and portions of the Sacramento River. This agency, SAFCA, serves as a local policy body for providing a high level of flood protection in the Sacramento region.

    An executive director administers SAFCA's day-to-day operations. SAFCA's jurisdiction covers portions of Sacramento and Sutter counties and its 13 member board is selected as follows:


      No. of representatives

      American River Flood Control District


      City of Sacramento


      Reclamation District #1000


      Sacramento County


      Sutter County


    SAFCA plans, finances and oversees flood control projects within its jurisdiction. For capital improvement projects, the federal government provides 65 percent of the funds, while 35 percent is derived from state and local funding sources. Property owners' assessments pay for SAFCA's operation and maintenance costs. In addition, SAFCA monitors the area's telemetry centers' pump stations, which divert storm water into the Sacramento and American Rivers.

    Current Major Projects

      · $60 million Natomas levee strengthening project.
      · $9 million bank protection on the lower American River.
      · $50 million Morrison Creek drainage improvement project.
      · $60 million American River levee strengthening is slated to begin in the spring of 1998, with expected completion in two years.

    The plan for the American River levee project is to place 18 inch thick impermeable barriers, known as slurry walls, from the top of the levee 30 to 60 feet down into the ground. Beginning at the confluence of the Sacramento and American Rivers, the project continues upstream 13 miles on the American River to the end of the levee near Goethe Park.

    While not responsible for private levees, SAFCA monitors them to assure there is minimal impact to the public levees under SAFCA's jurisdiction.


    According to SAFCA, a major challenge is to manage the American River watershed area. This 2,200 square mile area covers the mountains and foothills of the Sierra Nevada, from which runoff drains into the American River. Runoff starts from an elevation of over 10,000 feet and drops to below sea level in less than 100 miles. Unlike the Mississippi River, where the effects of runoff from the watersheds are felt downstream in about three weeks, runoff from the Sierra Nevada reaches Folsom Dam within 24 to 36 hours.

    Much work is still needed in order to achieve optimum flood protection. Lack of funding and other complexities affect SAFCA's ability to provide a complete flood control program. SAFCA's staff is knowledgeable and well-informed about flood issues, and attempts to solve problems with available resources. The Grand Jury was impressed with the Agency's Executive Director's knowledge of the subject matter.

    Sacramento County Public Works Agency


    On October 16, 1997, the 1997/98 Sacramento County Grand Jury met with senior management of the Public Works Agency. This Agency is responsible for oversight over a wide-range of unique divisions, including: monitoring water supply, transportation, solid waste management, flood control and storm water, construction, real estate, code compliance, and many other entities. The Public Works Agency is one of the largest agencies in Sacramento County, with three sub-departments and a combined staff of 1,929 full-time permanent employees.

    The Agency has streamlined its services and operates mostly on fees charged. No new positions were requested from the County, and the Agency has managed a no-growth policy with an annual savings of four percent. According to the Public Works Agency, its mission is to provide the general public, the business community, and governmental entities with effective, innovative and exemplary services.


    According to management, the incorporation of Citrus Heights was an eye-opener to the Public Works Agency. The Agency realized it needed to do business differently - to determine if services were cost effective and how services were delivered. The Agency's senior management team stated it is committed to change and proud of its improvements through process improvements and management restructuring. The Administration's platform is to improve operations, restructure the organization, serve customers better, and keep costs down in order to be competitive.

    SMUD's Rancho Seco Nuclear Power Plant

    On December 5, 1997, the Sacramento County Grand Jury toured the Rancho Seco Nuclear Power Plant. The purpose of the tour was to looked into the decommissioning efforts underway at the Rancho Seco Nuclear Power Plant. Decommissioning is the removal of residual radioactivity left over from operating the plant; hence, removing radioactivity down to a pre-determined low level.


    Rancho Seco was built to provide power to the customer owners of the Sacramento Municipal Utility District (SMUD). With construction costs of approximately $350 million, Rancho Seco went into operation in 1974. In 1989, Sacramento County voters recommended the SMUD Board of Directors close Rancho Seco. Decommissioning started in 1990.

    Decommissioning is a lengthy process, dependent on various agencies' policies, regulations, and guidelines. When SMUD informed the Nuclear Regulatory Commission (NRC) of its plans to decommission Rancho Seco, NRC did not have certain regulations / guidelines in place to cover a power plant of Rancho Seco's design. As a 915 megawatts pressured water reactor nuclear power plant, Rancho Seco was a large commercial plant that had been in operation over a long period of time. NRC had not dealt with such a decommissioning effort. As such, Rancho Seco set the precedent for the rest of the industry.


    To decommission Rancho Seco, the total estimated cost is $452 million in 1997 dollars. This cost does not include any take down costs. Take down costs are the costs to remove non-radioactive buildings such as the cooling towers, administration and shop buildings - which may or may not be removed. To encumber revenue to pay for the decommission effort, SMUD established an ongoing decommissioning trust fund. In 1997, $16.5 million went into the fund; in 1998, an estimated $17.5 million will go into this fund. SMUD customers pay for this effort as part of their rate.

    An incremental decommissioning effort, scheduled to last three years, is underway to remove contaminated materials from the power plant's active power-generating facility. This program is evaluated annually to determine the cost savings. During the first year, $1 million was saved in decommissioning costs as SMUD did not discover as much contamination as expected. Therefore, SMUD is able to decontaminate materials on site instead of having to pay for off-site disposal. For example, they can remove the small amount of radioactivity from the pipes, take the pipes apart, and sell the metal as scrap instead of paying to have the material transported to an off-site location and stored.

    SMUD is working to get the radioactive fuel into dry storage as soon as possible. Based on the current schedule, SMUD plans on having all the fuel into dry storage by 2001 in specially designed canisters on Rancho Seco's property. Once in dry storage, SMUD can operate Rancho Seco with a greatly reduced crew and save on decommissioning costs. According to SMUD, the lack of specific NRC regulations and the Department of Energy's (DOE) delays in securing a repository for this fuel forces SMUD to maintain the storage until an estimated date of 2014 or later. SMUD attributes the driving part of the decommissioning costs to these delays. If DOE is ready earlier, SMUD believes customers would realize a cost savings.

    SMUD plans to decommission the plant in a safe, cost effective manner. The staff at Rancho Seco is highly knowledgeable and has a long history of working at the plant, which the Grand Jury believes is important to this decommissioning effort. Control agencies need to work together to develop a timely, cost effective, safe schedule to get the fuel to its final destination.

    The land at Rancho Seco is not sitting idle; some of Rancho Seco's 2,100 acres are being utilized for other activities. SMUD's Rancho Seco Recreational Area offers camping, boating, picnicking, swimming, fishing, and more. There is a planned golf course and the Performing Animals Welfare Society (PAWS) is building a visitors' center for its hoofed wild animal park.

    EPWSD Complaint Log

    The following is a list of complaints received and investigated by the Environmental, Public Works, and Special Districts Committee.

Complaint No.

Brief Description of Complaint


97-51 (a)

Allegation regarding water district funds used for land-use planning document.

In Final Report

97-51 (b)

Allegation regarding water district funds used for development of a community service district.

In Final Report


Allegation regarding landfill operation.

Investigated, closed


Allegation regarding misappropriation of water district funds and excessive compensations.

Investigated, closed


Complaint against destruction of Folsom wetlands.

Investigated, closed


Complaint regarding notification of special district director's move outside ward.

Investigated, closed


Allegation regarding special district's water allotments on Folsom/South canal.

Investigated, closed


Complaint regarding cemetery district business.

In Final Report


Allegation regarding water district's ability to pay certificate of participation.

In Final Report


Allegation regarding serious improprieties at landfill.


    Complaint #97-51 (a)

      Rio Linda / Elverta Community Water District


    The Sacramento County Grand Jury received a complaint involving the Rio Linda / Elverta Community Water District (RLWD). The complainants alleged inappropriate use of RLWD funds and staff time to address land-use community planning.

    RLWD is governed by the provisions of Section 30000 of the California Water Code. A five-member Board of Directors is elected by RLWD's residents. The Board hires a general manager to oversee the daily operations of the District. This District has approximately 4,200 water customers. Rio Linda is located in the northern section of Sacramento County.

    The Rio Linda and Elverta Community Plan is intended to provide direction for the future of the community. The Plan identifies the appropriate land use and community growth. The Rio Linda and Elverta Community Plan update was initiated by the County Board of Supervisors in December 1993. In September 1994, the Supervisors held a workshop on the Community Plan. As a result of this workshop, the Supervisors forwarded three alternative land-use plans for consideration in the environmental review process. These three alternative plans, with the addition of a fourth alternative, were discussed at a series of public hearings beginning in February 1997.

    At the RLWD's Board of Directors' meeting held on March 19, 1997, the District's general manager presented another alternative - Alternative A+, which was approved by the Water Board. This plan was presented to the Sacramento County Policy Planning Committee the next day.

    Findings & Recommendations

    Finding: The Grand Jury met with RLWD's general manager and reviewed the Board of Director's minutes and video tape of the March 19, 1997, board meeting. Discussion involving Alternative A+ was not listed as an agenda item for that meeting. During the meeting, board members discussed what they would like included in the land-use plan. The Board discussed possible backlash from the community, hence it passed the proposal by consensus instead of formal vote. Board minutes did not reflect discussion of Alternative A+ or approval to fund the preparation of this document and its submittal to the County Policy Planning Committee.

    Without disclosure of Alternative A+ on the agenda, residents were not prepared to speak before the Water Board. As a result, Alternative A+ went forward as the "voice" of Rio Linda with minimal knowledge or input from residents. The Grand Jury determined Alternative A+ was not appropriately approved by the Board in accordance with the Brown Act. Pursuant to Sections 30523, 30525, and 30526 of the Water Code, "the board shall act only by ordinance, resolution, or motion. No ordinance, resolution, or motion shall be passed or become effective without the affirmative votes of at least a majority of the members of the board ... the passage of all ordinances, resolutions, or motions are entered upon the minutes of the board."

    Recommendation: The RLWD's Board of Directors should comply with the provisions of Government Code section 54954.2(a) relative to placing agenda items on meeting announcements (Brown Act). The RLWD's Board of Directors should be in compliance with Sections 30523, 30525, and 30526 of the Water Code.

    Finding: Based on information received by the Grand Jury, even if Alternative A+ was properly agendized and noticed, and formally approved, the expenditure of such funds would be inappropriate.

    Recommendation: The RLWD Board of Directors should expend funds only for services within the purview of the Water District's jurisdiction.

    Response Required
    The Penal Code requires responses to the recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1998, from: Rio Linda / Elverta Community Water District's Board of Directors.

    Complaint #97-51 (b)

      Rio Linda / Elverta Community Water District &
      Rio Linda / Elverta Recreation and Park District


    There was concern expressed about the Rio Linda / Elverta Community Water District's involvement in the formation of a Community Service District (CSD). The Rio Linda / Elverta Recreation and Park District and the Water District discussed such a consolidation. The complainants alleged inappropriate use of funds and staff time to address CSD formation and land-use issues. The complainants felt some elected officials and district employees, as well as a special interest group, were making decisions based on personal or political gain and not in the best interest of the community.

    A CSD is the consolidation of several community services within an unincorporated area. The Local Agency Formation Commission reviews all CSD consolidation requests, studies the plan(s), and grants approval for the formation.

    Finding & Recommendation

    Finding: According to discussion with other community service districts, the Grand Jury found issues with forming a CSD. One benefit is a smaller, more localized governmental entity and is more cost effective by reducing overhead and duplication. As a public agency, it must comply with the provisions of the Brown Act and other governmental statutes. A CSD acts as a single point of contact for residents and control agencies.

    The formation of a CSD poses some logistical problems. There needs to be an agreement as to who will serve on the new CSD's Board of Directors since the current boards are combined and reduced in number. This is one of the largest obstacles, as some CSDs have failed because this issue could not be resolved. There is a reduction in staff when services are combined. Decisions have to be made on staffing, early retirement, and the liability for district debt. The Grand Jury believes the districts' employees and board members should be involved in the consolidation discussion and analysis. The use of staff time and district funds is appropriate if approved by the Board of Directors and open for community discussion.

    The Grand Jury found that meetings involving land-use issues and the formation of a CSD occurred concurrently. Therefore, discussion invariably overlapped and issues were commingled during these sessions. The situation was further complicated, as it appeared a board member and district staff were affiliated with a special interest group favoring rural development.

    Recommendation: Future discussions involving the formation of a CSD should include the community as well as the districts' board members and employees. The Grand Jury believes a CSD is not a "voice" for the community but a governmental service provider - the same as any water or park district. The discussions involving the formation of a CSD should be limited to the services merged, and not include the board members' or employees' political or personal agendas.

    Response Required
    The Penal Code requires responses to the recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1998, from: Rio Linda / Elverta Community Water District's Board of Directors and the Rio Linda / Elverta Recreation and Park District's Board of Directors.

    Complaint #98-45

      Galt-Arno Cemetery District


    Members of the 1997/98 Grand Jury made a visit to the Galt-Arno Cemetery District office. The Cemetery District operates and maintains two cemeteries within its boundaries - the Galt and Hicksville cemeteries. The Cemetery District is governed by a five-member Board of Trustees. As an independent district, all financial activities are under the Board of Trustees' control. Control is determined on the basis of budget adoption and continuing oversight responsibilities. The Cemetery District was organized under Health and Safety Code Section 8890.

    Findings & Recommendations

    Finding: The previous Grand Jury recommended the Cemetery District engage the services of an independent certified public accountant (CPA). The Cemetery District hired a CPA who lives in Southern California without soliciting competitive bids. As a result, the Cemetery District must incur costs to communicate long distance with its CPA.

    Recommendation: The Cemetery District should solicit at least three bids for an independent CPA to conduct the Cemetery District's audits in the most cost effective manner.

    Finding: It was discovered that all the Cemetery District's electronic files were kept on the personal computer (PC) in the office. There were no procedures for off-site archival storage of critical data in the event the PC was stolen or the building destroyed.

    Recommendation: At least annually, the Cemetery District should store its electronic and hard-copy backup documentation at a secured off-site location. This documentation should include copies of the plot map database and operational / fiscal records.

    Finding: The current business procedure manual is not up-to-date. Although the Cemetery District's manager is very knowledgeable about the District's operations, when the manager is not available there are limited procedures for staff to follow.

    Recommendation: The Cemetery District's business and office procedures should be updated at least annually, and be clearly accessible to staff and board members.

    Finding: At the time of the Grand Jury's visit, the latest audit, dated September 4, 1997, was not on file in the business office. The Grand Jury requested, and received, the audit. The Grand Jury reviewed the CPA's recommendations and concurred with the findings. It is the responsibility of the Board of Trustees to bring the District into compliance with these recommendations.

    Recommendation: The Cemetery District should comply with the CPA's recommendations as stated in the September 4, 1997, audit report.

    Response Required
    The Penal Code requires responses to the recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1998, from: Galt-Arno Cemetery District's Board of Trustees.

    Complaint # 98-59

      Rio Linda / Elverta Community Water District


    The Sacramento County Grand Jury received a complaint about the Rio Linda / Elverta Community Water District's (RLWD) ability to meet contractual repayment on Certificates of Participation (COP). COPs are complicated financial arrangements between nonprofit corporations created for the purpose of financing improvements without issuing bonds or additional taxes. For the investors, these tax-exempt certificates offer tax-free interest income. This financial arrangement enables the borrowers to make initial lower payments with increased payments in subsequent years, anticipating increased revenue associated with growth.

    RLWD entered into an Installment Purchase Agreement on November 1, 1994. A nonprofit corporation issued a $4,990,000 COP to RLWD for investment in the San Juan / Northridge cooperative surface water transmission pipeline. The pipeline was designed to deliver drinking water from Folsom Reservoir to RLWD service area. The pipeline terminates at Walerga Road, several miles from RLWD's boundary. It is uncertain whether or not RLWD will ever receive water from this pipeline. The Grand Jury verified that RLWD had made the interest payments, as well as the first principal payment due on November 1, 1997.

    According to the general manager of the Northridge Water District, the construction costs of the pipeline increased; hence, RLWD's portion increased. RLWD does not agree with this position and the matter is now in litigation. Based on the outcome of the litigation, RLWD will look at ways to refinance its debt to spread payments over a longer period of time.

    Finding & Recommendation

    Finding: While RLWD is aware of its obligation to repay the debt, it has not taken the appropriate steps to officially notify its customers of the current situation. According to RLWD, a major rate increase is imminent to repay the COP.

    Recommendation: RLWD should notify its customers of the debt, the progress and outcome of the litigation, and any probable rate increases. Such notifications should be mailed to the customers and posted in a public place.

    Response Required
    The Penal Code requires responses to the recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1998, from: Rio Linda / Elverta Community Water District's Board of Directors.

1997/98 Sacramento County Grand Jury - Final Report (Internet Version) June 30, 1998

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