Kern County Water Agency is broke? Sort of ...
| Tuesday, Dec 13 2011 09:28 PM
Last Updated Tuesday, Dec 13 2011 09:31 PM
Listen to KERN 1180 AM from 9 to 10 a.m. Monday through Friday when Californian staffers discuss this issue and others. You can get your two cents in by calling 842-KERN. Lois Henry hosts every Wednesday. To listen to archived shows, visit www.bakersfield.com/CalifornianRadio.
The Kern County Water Agency is broke.
It's an interesting kind of "broke," however.
One that doesn't look like it will come with the attendant layoffs and reduced services that we've seen from other, truly broke, public agencies.
The agency can certainly pay its bills, General Manager Jim Beck told me. But it is facing a $1.5 million shortfall this year. Oh, yeah, and this isn't its first deficit-spending year, either.
It is, however, the first year the agency has passed the hat among the agricultural water districts that make up its member units.
That came as somewhat of a shock to the member units when this first came up a few months ago. No one had a clue.
And while all the member units I spoke with think the agency has been caught between a rock (unable to substantially increase revenues) and a hard place (forced to spend more to defend Kern's interests in the fight for water from the Sacramento-San Joaquin Delta), they also scratch their heads at some of the agency's spending choices.
It's almost as if the agency really just doesn't know how to be thrifty because it never had to be.
Indeed, Beck told me this is the first time in the agency's 50-year history that money has been an issue.
Let me pause here a moment.
While I'm fascinated by water agencies, their money and their endlessly creative deals to move water around the state, I know most of you aren't.
Hence, I shall explain why you need to care.
A: The agency does get a small portion of property taxes from all Kern County residents as well as an extra ad valorem tax from a subset of those property owners. So, at least some of the agency's funding is our money.
B: The agency's fight for delta water isn't abstract from you and me and our daily lives. Beck is not exaggerating when he warns that if the agency isn't successful in protecting Kern's delta water supplies it will change the face of Kern County -- and not in a good way.
Our economy depends on the State Water Project. Without it, we cannot sustain our current level of agriculture, not to mention drinking supplies for a large portion of northwest Bakersfield.
If you've never heard of the agency, don't fret. It's not exactly on your doorstep like the county Board of Supervisors.
The agency is unique in that it was created specifically to represent the numerous water districts here in Kern County and collect money from them to pay for their State Water Project contracts.
It started out basically as a pass-through agency.
The agency doesn't charge assessments or surcharges to its member units. Aside from the taxes it receives, its other significant revenue stream comes from skimming the interest off member unit payments to the state.
Over the years, the agency became much more than a simple bookkeeping operation.
Besides its numerous local projets (Central Valley Canal, several flood control operations, water banking, groundwater monitoring, providing drinking water to the northwest, etc.), it has become the tip of the spear in legal, political and public advocacy efforts to make sure Kern farmers get the water they're entitled to.
That's expensive. The taxes and interest earned on that pass-through money couldn't keep up, so the agency was using its reserves.
It realized last year that wouldn't last and fessed up to member units that it needed help. Core functions were safe, but the extras -- particularly litigation and keeping a hand in the delta -- were an unsustainable drain.
The districts were taken aback -- and not just by the financial picture.
Some believed the agency's request for the districts to pony up extra if they wanted some programs to continue wasn't exactly belt tightening.
"If we had a significant overrun like this, I'd be asking what projects don't get built, what employees would we have to lay off and we'd be cutting back on expenses," said Kern Delta Water District General Manager Mark Mulkay. "Instead, they're asking us to fund certain extracurricular things, which doesn't change the overall budget.
"It's not cutting back."
And even when the agency has cut programs, including an energy consultant and special audit of Department of Water Resources bills, it turned around and spent at least some of that savings on a Sacramento-based PR firm.
That contract has been terminated, Beck quickly told me. But not before the agency paid out nearly $80,000. (See what I mean about being a bit spendy?)
While that episode didn't sit right with some member units, most commended the agency for being transparent and inviting them into the process by forming a committee to go over agency programs and funding.
Still, they want an end date.
"We're willing to step in and bridge a gap, but what's the plan for you to resolve this and get back on a good footing financially?" asked Eric Averett, general manager of the Rosedale-Rio Bravo Water Storage District. "We're waiting for a long-term plan from the agency."
Beck said the agency is busy retooling, reducing or combining departments and looking at all their operations.
"We're not out of sync with our member units," he said. In fact, he's been impressed with how aligned their goals are.
Now, it's just a matter of paying for them.
Opinions expressed in this column are those of Lois Henry, not The Bakersfield Californian. Her column appears Wednesdays and Sundays. Comment at http://www.bakersfield.com, call her at 395-7373 or e-mail lhenry@bakersfield.com.
