When the CSD was formed in 1998, it was charged with overseeing the town’s sewer and water services, and later added landscaping and recreation services to its primary functions. Funds to cover those activities come from fees collected from property owners benefiting from those services. Proposition 218, which was passed in 1996, requires that those fees be used only for the functions for which they are collected and for the administrative expenses required for the district to exist.
At the time it was formed, the former Discovery Bay Municipal Advisory Council was dissolved, and the duty of advising the county Board of Supervisors on community issues not related to those primary functions were added to the CSD’s responsibilities.
No funding for those activities was provided or identified. The CSD has thus far paid for most of its advisory council (AC) functions from its general fund, which comes primarily from the aforementioned fees. The CSD has historically also financed some AC functions with money from the Keller Canyon Mitigation Fund overseen by District V Supervisor Federal Glover. Last year the Keller Canyon Fund provided $3,000 in unrestricted money, but future Keller Canyon funding is not guaranteed..
Discovery Bay Town Attorney John Stovall addressed those issues in an 11-page document presented at the CSD meeting on April 1. In his report, Stovall said that some of its non-sewer, water, landscape and recreation duties could be funded by those fees. Expenses related to attending meetings about police and fire services, for example, are eligible for funding with current revenues, he said, because the CSD could choose to apply for those powers simply by virtue of its existence.
But actually providing those services, should they be assumed, would require separate funding, according to Stovall’s report. Similarly, because it has already assumed the AC responsibilities, “The source of funding (for AC duties) remains an issue,” wrote Stovall.
Director David Piepho, however, does not believe separate funding is needed. “I disagree with our attorney’s opinion that they (AC funding) can be pulled out,” said Piepho. “I don’t believe it can or needs to be done … There is a lot of bad information out there.”
Director Mark Simon suggested that the CSD put a stop to all AC duties until the situation is resolved. “There is such a stink about what we are doing (with the AC duties) that I think we should do nothing but CSD business until this issue is settled,” he said. “Until we know, I believe we should do nothing.”
Tetreault disagreed with the idea of forgoing AC business, but agreed that more data is needed. “I want some more information about this issue,” he said. “And I want to go before the county supervisors and see if there is a commitment for a source of revenue, and also have our attorney come up with an idea of how to fund our requirements for these additional duties.”
Just how much money is involved in performing AC duties is unclear. Stovall’s report says “the duties that need to be funded … only include the actual carrying out of the (AC) power, which appears to be primarily the cost of employees or contractors who are paid by the hour” including legal counsel. He adds that he performs very little work carrying out AC duties “except for sitting at the meetings.” A recent sampling of CSD meetings showed that about half of the time – between 1½ and two hours per meeting – was dedicated to AC business. Stovall’s firm bills the CSD at a rate of $215 per hour.
Stovall’s report recommends that the board “direct staff to prepare the necessary procedures and documents to carry out the imposition of a fee” to cover AC activities.
To pay for the AC functions in the meantime, Stovall’s report said, it would be “perfectly proper to loan money from the water and/or sewer fund” to perform the AC duties.” The loan would need to include “a plan to pay it back; an interest rate; and appropriate accounting procedures.”
The CSD voted 3-0 to establish a subcommittee of Tetreault and Piepho tasked with finding out whether county funding is available to pay for the performance of AC duties. Directors Shannon Murphy-Texeira and Dave Dove were absent.
Resident Walter MacVittie cautioned the board to remain vigilant in its investigation. “I have to say that you (CSD) are on thin ice, and if someone were to take (this issue) to court, I think you would lose,” he said. “You really need to address how you are funding this (AC duties).”
Tetreault agreed: “Our goal is to stay within the proper procedure of the law and follow the rules. What happened in the past I cannot change. We can only go forward.”