Carmichael Water District

Complaints were received from citizens alleging that the Carmichael Water District:

1. Was not billing all parcels for water used;

2. Paid the health benefits for the Board of Directors;

3. Violated the Brown Act;

4. Directors were not paying the correct water rates;

5. Violated the Public Records Act; and

6. Employed incompetent management staff.

The complaints further alleged conflict of interest by a Board member and that financial items were not being fully analyzed before Board approval.

The Carmichael Water District was formed in February, 1916, as the Carmichael Irrigation District in accordance with Section 13 of the Irrigation Act. At that time, the District was made up of farm land consisting mainly of 10-acre parcels. As the land was developed homes were built and connected to the existing pipes to meet water needs.

Currently the District has a water collector system on the south side of the American River. After the water is filtered it is piped under the river to parcels within the District. The collector system received heavy damage in the January, 1997 flood and the water quality has been severely affected. The three- foot pipe that carries the water under the American River was under 4 feet of gravel before the January flood, but it is now exposed and the river bottom is under the pipe instead of over the pipe. Many of the feeder pipes which connect a home or business to the main water lines, are being replaced with copper since they were made of transite and are failing at a high rate.

The District has a Board of Directors consisting of five members, just increased from three, elected by districts. The District is managed by a General Manager and a staff of 21. The current General Manager has held this position for 2 1/2 years and has been with the District for 11 years.

The Grand Jury reviewed previous Grand Jury Final Reports and responses from the District. Numerous written reports and correspondence, spanning more than three years, were also reviewed. A complainant was interviewed by members of the Grand Jury. The Grand Jury visited the Carmichael Water District and met with staff, a Board member and the District’s legal counsel.

1. The Carmichael Water District has made a concerted effort to insure that all parcels are receiving water service are billed at their proper rate. At the present time there are 242 parcels that are not being billed. These consist of drainage canals, roads, right-of-ways, and vacant land with no structures or irrigation. There are also multiple parcels which contain only a single large complex and only the main parcel is billed. The Grand Jury obtained a list of these unbilled parcels and their locations and spot-checked them to verify the information. The District has updated its computer system and is now matching its parcels with the County Assessor’s rolls.

2. The District has hired an outside consultant to study the current water rate schedule and make recommendations for a more equitable rate schedule. At the present time a 1000 square-foot house on a 5000 square-foot lot and a 10,000 square-foot house on a 10-acre parcel could be paying the same rate. Furthermore, there are 37 residential accounts

(which are included in the 10,792 parcels being billed) with either 1-1/2 inch or 2-inch taps being billed at the 1-inch rate. A motion to increase these rates was put on hold by the Board on September 3, 1996, because the rate schedule had already been approved for the current year. In addition, on May 19, 1997, the Board approved the formation of a Citizen Advisory Committee, consisting of one single family customer from each district, one multi-family customer, one commercial customer, one park district representative, and one school district representative to further study the rate schedule issue.

3. The medical benefits for all Board members, which are allowed by statute, will be phased out by July 1, 1997.

4. One Board member is currently covered by life insurance which will not be renewed upon expiration of the contract.

5. Alleged violations of law were investigated by different agencies, including the District Attorney. The allegations were not substantiated.

6. The current collector system must be replaced with a filtration plant in order to meet the current state and federal laws. This proposed plant is now under Board and public review.

7. Board Minutes reflected that all Board members are currently billed at the proper rate.

The allegations were investigated and were unsubstantiated, or have been corrected or are in the process of being corrected. The current staff is working with the Board and the citizens in order to rebuild an antiquated water system.

The Grand Jury recommends that:

1. A more equitable rate schedule be adopted by the District prior to July 1, 1998.

2. The District continue to monitor the parcels to ensure inclusion in the system for proper billing.

3. The District maintain an open door policy with its citizens in releasing information in accordance with the law.

The Penal Code requires responses to the recommendations contained in its report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1997, from:

Carmichael Water District Board of Directors.