Failing the Public Taxpayer
Ventura Regional Sanitation District (District) is a public agency that provides solid waste, water, and wastewater services within Ventura County. The District is governed by a Board of Directors that include city council members from Camarillo, Fillmore, Ojai, Oxnard, Port Hueneme, Santa Paula, Thousand Oaks, and Ventura.
The District has been operating at a loss for years. While operating at a loss, Directors have been reluctant to increase rates or reduce costs and have instead been covering losses by dipping into dwindling cash reserves.
The District is failing because the Board has demonstrated it is not competent in its financial oversight responsibilities. It is time for a completely refreshed Board
Earlier this year the City of Oxnard terminated its solid waste agreement with the District, resulting in a loss of $3.6 million in revenues. Oxnard cited uncompetitive rates at VRSD and awarded the contract to Waste Management of California.
The Board was told with the loss of Oxnard as a customer, the District could “no longer keep reserves that we have” and it may need to delay pension payments. The Directors agreed to the suggested changes.
At the February meeting the Board discussed its practice of moving costs from the water and wastewater business, making it appear profitable, while dumping additional costs into the solid waste landfill business, making it appear to lose even more money than it does.
The District Manager told the Board that if cost allocations were corrected where water and wastewater were no longer being subsidized by solid waste then “we could lose our customers and would become unsustainable”
Months later the Board was notified by the County of Ventura and TWSD, who account for 63 percent of water and wastewater revenue, that they too were terminating their agreements.
The County of Ventura said it was terminating its agreement because of “escalating costs, poor workmanship, and neglect by Ventura Regional Sanitation District who often errs on the side of making band-aid repairs”.
Failing to demand what should be done to correct the poor workmanship, Director Kildee complained; “It’s not fair. We need to send a letter back explaining our side of this issue to the Board of Supervisors.”
Failing to ask what should be done to correct escalating costs that made the district uncompetitive, Director Hernandez demanded; “We need a public relations strategy to respond to hits from outside.”
Failed oversight has been a hallmark of the District Board. While Directors have acknowledged financial problems at public meetings, they have been unable or unwilling to correct the present destructive course.
Commensurate with the Board’s role in financial oversight and fiduciary responsibilities, it has failed to ensure adequate funding to provide quality services to its community by imposing sufficient rates and fees to cover costs.
During budget meetings, Directors failed to ask for any plan to address cost inefficiencies, poor workmanship, the potential loss of more customers, and importantly, dwindling cash reserves.
Directors failed to ask questions when told an additional $9.0 million of “net available” cash reserves would be needed during the next three years to cover cost inefficiencies, at which point the District could be insolvent.
Instead, Directors focused their attention on the $4,000 reduction in fees they receive for attending committee meetings. District customers can take comfort that at the insistence of Directors the fees were restored through cost savings from reduced employee training
The District’s real problem is that it is going broke!
When finally asked, staff told VRSD Directors the District is uncompetitive in part, due to employees receiving two pensions (one from Ventura County and another from the State) combined with a wage structure that is higher than the private sector.
Unwilling or unable to correct the present destructive courses that made the district no longer competitive, Chairperson Friedman closed the budget discussion saying; “The writing is on the wall that we are too expensive to provide the services for the community.”
Rather than acknowledge the District is going broke, the Board of Directors instead opted to kick the can down the road and approved a budget that included delayed pension payments, draining of remaining cash reserves, and hoping against hope that more customers don’t leave.
The FY2021-22 budget was approved with one dissenting vote. A budget that included another ($5.5) million in losses, followed by millions of additional losses every year until the District finally runs out of cash, possibly as soon as 2024
New leadership is needed.
The process of returning VRSD to financial stability and regaining the public’s trust demands a refreshed board of directors including new appointments with expanded business experience.
The District is failing because the Board has demonstrated it is not competent in its financial oversight responsibilities. It is time for a completely refreshed Board.
Because of these failures, the Ventura County Taxpayers Association calls for the immediate resignation of Chairperson Friedman, Vice-Chairperson Hernandez, Directors Kildee, Jones, and Austin from the VRSD Board of Directors.
Authored By, Ventura County Taxpayers Association