Several residents urged the City Commission to wait and study the issue more before raising rates in order to start a $9.4-million water-system upgrade, noting disparities in numbers used in the water-rate study, the engineering study by Wilson & Company and City staff numbers.
The City Commission ignored and did not address the information-disparity issues raised.
Water customers will pay a $15.50 base rate versus the current $8.15, starting April 1, whether it is warranted or not.
Water-per-1,000-gallons increased as well. Sewer rates, based on gallon usage, will soar accordingly.
Karl Pennock of Rural Community Assistance Corporation did the water rate study. He gave his report no less than six times and was challenged several times by the Sierra County Sun for using numbers not based on audited numbers.
At the last two presentations, Pennock said the numbers were based on the city’s audit, even adding that the 2018-2019 numbers were pending with the State Auditor’s Office.
In a prior article, “Problems with information used to rationalize water-rate increase,” the Sun reported Pennock’s numbers didn’t match the audit and has confirmed it again.
Asked to give the source of his numbers, Pennock insisted the Sun had to do a public records request through the City to get them.
The recently fulfilled request reveals Pennock’s numbers come from City Manager Morris Madrid’s 2019-2020 budget document, not year-end audits.
The City’s fiscal year runs from July 1 to June 30 and therefore straddles two years.
Although Pennock went back to 2013-2014 and forward to 2018-2019, the Sun could only compare Pennock’s 2016-2017 and 2017-2018 numbers to audits on the State Auditor’s website for those same years.
Prior to 2016-2017, the City lumped the water, electric and wastewater departments into one fund called the Joint Utility Fund. The audits therefore do not break out water-department numbers.
The Sun is waiting for the State Auditor’s Office to release the 2018-2019 audit, but the City turned it in late and it is still not available.
The audited numbers show the water department was much richer than Pennock’s study describes.
In 2016-2017, Pennock said the water department made $160,014, but the audit shows it made $454,157.
In 2017-2018, Pennock said the water department was in the hole $256,361, but the audit shows it had $1,527,228 revenue over expenses.
Pennock’s water-rate study said no money was transferred into the water department in 2016-2017, when the audit states $11,790,507 was transferred in. For the next fiscal year Pennock again shows no transfers in, but the audit shows $1,956,345 was transferred into the water department.
Pennock said $308,777 was transferred out of the water department in 2016-2017, the audit showing $10,217,873 was transferred out. For the next fiscal year Pennock states $510,573 was transferred out, but the audit shows $2,718,799 was transferred out of the water department.
The City Commission did not question Pennock’s numbers.
The Public Utility Advisory Board did, Member Ron Pacourek going so far as to verify with Water and Wastewater Department Director Jesse Cole that the department was never in deficit. Pacourek told Pennock what Cole had said, but he made no response.
It appears the water customers are paying a much higher rate increase than is warranted.
Pennock did not return a request for comment by press time.