It’s Not About Water Rights.

Recent OCR articles by both Chris Haire and Terri Daxon have addressed Brea’s recent acquisition of Cal Domestic water rights. The question regarding who has the authority to spend Brea’s money and what the real issue is in acquiring water rights seems to have gotten overlooked in the swarm of facts and figures.

The acquisition of water rights and preferred stock, from Cal Domestic and the Metropolitan Water District, has long appeared to be complicated, if for no other reason than to dissuade the public from taking a closer look at the process. While both writers got the essentials correct, here’s an executive summary.

Water rights – distilled.

December 2011 – Council approves an $8.1 million purchase of rights for 665 acre feet of water. Pay once, get the water every year in perpetuity. Cost for water is locked in, cost to deliver can and does rise annually.

This purchase is made by transferring $5.6 million from Brea’s General and Risk Management Funds to the Water Fund. This is called a “loan” – at an interest rate of 2.17% for seven years. So far we’ve paid back about $1 million. I don’t know why it’s called a loan. The balance, $2.5 million, was already available in the Water Fund.

bill_gallardoJune 2013 – Jim Byerumm, Cal Domestic’s General Manager alerts Charlie View and Bill Gallardo of the availability of rights for an additional 225 acre feet.

Internal discussions ensue, excluding Council. Brea’s bid of $3.4 million, made without Council authorization, by Charlie View and Bill Gallardo is accepted by Cal Domestic.

Believing that there were still Water Funds available from the original transfer (loan) and approval given in 2011, View and Gallardo completed the transaction without giving Council so much as a courtesy heads-up.

After their oversight was discovered, the Cal Domestic invoice was ultimately paid using a $1.2 million credit from Cal Domestic’s terminated Capital Improvement Fund (accrued because we’d overpaid for almost 18 months) and $2.2 million from the Water Fund.

The error on the parts of View and Gallardo, in memory and judgement, involves $3.4 million, not $2.2 million as reported. Also, the fact that we paid Cal Domestic’s Capital Improvement Fund $70 thousand a month for a year and a half after they terminated the fund deserves some discussion, too. How many errors like this are going on? Why aren’t audits catching this sort of blunder?

The whole affair was discovered by Council member Simonoff, who set in motion the process that brought the matter into Council study session. Apparently Garcia and Murdock believe that being in the room is sufficient to allow them partial credit.

I disagree, but that’s another blog.

Now having retroactively covered their assets and having called in independent auditors to review both purchases to ensure there are no further problems, plus doubling the staff required to closely oversee transactions of this sort in the future, Gallardo suggests that Brea is pretty much out of the woods.

I wouldn’t be too sure about that.

No data trail, the real problem.

According to Bill Gallardo, none of this process is documented in any fashion prior to Cal Domestic submitting their invoice!

Not the notification of availability. Not the confirmation of interest. Not the details of negotiation, i.e. bids, counter bids, stipulations and contracts. Nothing. Not who was involved. Not how business was transacted. Nothing.

No other purchase or financial commitment made by the city, to the best of my knowledge, is conducted in such an unacceptable, loosey goosey manner. You know why? Because we’re in charge! We make the rules.

CA_SealWhen it comes to water rights apparently there are no rules. We can’t even demand a paper trail from Cal Domestic because we have no authority over them. Only the State of California does.

Instead of sending a representative to Washington to wade in on immigration issues, instead of sending an entourage half way around the world to watch a folkloric event and do a lot of sightseeing, maybe we should send someone to Sacramento to rattle Governor Brown’s cage on this.

falls_640tim_2aIf Brea is really a corporation, how about asking our “CEO” to start acting like he’s running a corporation.

After all, every glitch in this whole water rights matter circles right back to his office.

Where was he in this process? On vacation… again?

 

Put The Cookies Back!

Local media fans the flames.

Thursday’s Star Progress had an article by OCR writer Doug Morino with the headline, “Last year’s city trip to Asia still a hot topic.” — yeah, and it’s about to get even hotter.

The article begins, “Brea leaders are once again catching fire for their traveling ways.  First, the heat came from a few residents (cough, cough…).  Now, it’s coming from one of their own.  Councilman Marty Simonoff said he wants to take a deeper look at how the city’s travel budget is allocated and how public funds were spent during a trip last year by city officials to Korea and Japan.”

Better late than never.

cookie-jarBless you Marty for finally jumping in, but I’m afraid I have to take a different view of this…  it’s not time to focus on the minutia.  Getting mired down in the trivialities of the trip will not address the real issue.

The bottom line is that Schweitzer, Murdock and O’Donnell appear to have gotten caught with their hands in the cookie jar.

It’s time to stop all of the muddling around spreading half truths, in an attempt to cloud the real issue, too much time has been wasted already trying to make this junket appear to be something it wasn’t… official anything.

cookie-2It doesn’t matter if the cookies were chocolate chip, oatmeal or peanut butter.  They weren’t for the taking.  It’s time to man up.

You can’t just help yourself to what isn’t yours without expecting to pay the consequences when you’re caught.  Extremely poor choices were made, they come with a price.

In this case there may very well be a law against stupid.

 Is travel the issue?

cookie-3

Not completely, no.  There are historically legitimate reasons that require Council and staff to travel.  At least that’s what we’re being told.  A discussion about which organizations make sense for Brea to join and which don’t should also go on the agenda.  Could be some real savings lurking here.

I’m talking about National League of Cities, League of California Cities, the Energy Coalition and the like.  I’m still trying to figure out how Breans have directly benefitted from the city’s involvement in these and other dubious organizations, but that’s not the issue at the moment.

Who’s business was it… really?

cookie-1This whole debacle began when the Mayor inappropriately intruded into the business of a private organization over which the city has never had any authority beyond a minor ceremonial role.  How the BSCA and BKSCA choose to settle their differences is their business.

When Mr. Park, Anseong Mayor Hwang’s emissary, came calling, Don Schweitzer should have politely directed him to share his concerns with these organizations.  Instead Schweitzer butted in like we were on the brink of some international crisis.

The pool boy wades in.

liar-liarIt’s even more ludicrous that, according to the article, “Murdock fired back at Simonoff, calling his inquiry into the Asia trip a type of politically-motivated vendetta aimed at shifting attention from other civic issues.”

Hogwash.

I don’t believe that any more than I believe Brett Murdock is, as he has so loudly suggested, the leading knight on a white horse trying to solve Brea’s unfunded pension liability.  What a ridiculous claim to make.

It’s on the agenda now.

I’m glad to see that the Mayor reversed his denial and is now allowing the discussion to occur.  Sadly, it’s slated for the study session on June 4th which means it’s at a time and place where the public isn’t likely to be free to attend and unfortunately will not get to hear a full report on the conversation.

Have the courage to take it downstairs!

With the whole matter blowing up as it has in the media weeks in advance, and with the unsubstantiated personal attacks being leveled to further keep the truth from seeing the full light of day, I’m curious to see what sort of preemptive strikes might be made when Council meets next week (05/21).

This would almost be funny if it wasn’t so sad and embarrassing.