Oceano facing insolvency

April 19, 2011

By KAREN VELIE

Oceano district leaders are grappling with possible solutions to ward off the looming threat of insolvency.

Oceano Community Services District (OCSD) general manager, Raffaele Montemurro, says the solution to the district’s financial problems is a combination of selling water rights, procuring loans and grants, and raising water rates.

The district, responsible for serving about 7,600 residents and business owners in Oceano and Halcyon with fire protection, street lighting, and sewer and water services, has been running about $25,000 in the red for more than a year depleting its reserve account down to a precariously low $1.5 million.

In a February 2011 report dubbed “Financial Challenges,” Montemurro contends the district has about four years before insolvency under the current budget, which only allows for $20,000 in capital improvement expenditures for the 2011/2012 fiscal year.

If spending exceeds the budget before a solution to the community’s financial crisis is found, the district could face insolvency even sooner than Montemurro’s four year projection.

Unexpected and needed repairs could put the OCSD further in the red. For example, at an April 13 meeting the board discussed putting a new roof on the district offices building. In addition, the OCSD needs about $1.2 million to provide necessary repairs to five water mains, according to district reports.

In his report, Montemurro suggests that another water rate increase could help ward off insolvency. This is in addition to a board decision earlier this year that hikes customer’s water bills 25 percent over the next five years.

Montemurro also said the district needs to apply for loans and grants. However, refuting his own suggestion, Montemurro’s report also notes that during this “time of challenging federal and state budget issues these programs are highly competitive and decreasing in availability.”

Regardless of competition, the OCSD may find itself disqualified by the fact that most loans and grants require that communities have audits and accounting records available, and the district has yet to complete its 2008/2009 audit.

Last month, former directors Jim Hill and Carole Henson tendered their resignations, citing disagreements with Montemurro over his accounting practices and failure to follow the board’s direction that asked him to complete the past few years of audits.

For months Montemurro has attempted to get the board to approve the sale of a portion of the district’s water rights noting that the water pipes are in dire need of repair. After his first proposal to sell water to Pismo Beach was denied, Montemurro turned his sights on selling water to Arroyo Grande.

Some Oceano residents are pressuring the board to consider other possible remedies to resolve the district’s financial woes such as spending reductions or a merger with either Grover Beach or Arroyo Grande.

Former director Hill contends there should be a public discussion on the idea of joining a neighboring city. The marriage would lower administration costs while bringing either Arroyo Grande or Grover Beach additional water rights.

“If the district was properly managed with audits done on time,” insolvency would not be an issue, Hill added.


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WiseGuy

Karen, please interview Barbara Mann and Mitch Cooney regarding “campaign contributions.” Then ask David and Lori Angello what happened over the years. And keep going from there. And THE DAVIS’s. They know things, very troubling things. And don’t let Hill fool you.


Oceano has long been suffering from a bad infection at the OCSD. It’s time to lance it and watch the pus ooze forth on the way to recovery.


MzWhatever

I’m sure everybody that has served or worked for OCSD knows things! But what makes you think after all this time they are willing to open the closet and let out all the bones? It seems to me that everyone of the board member that currently serve or have just resently left only has one thing in mind. What is going to benefit them! They aren’t on the board because they care about the community. They are on the board because they have their own agenda! TO SEE WHAT THEY CAN GET OUT OF THE CANDY DISH!!!!! That is the problem with OCSD you have members on the board that really do care about the community and everyone is against them and wants them gone! The only infection you have is the two board members that think Mr. Montemurro is doing a good job! They need to take off their blind folds and see what’s really going on.. In the end HE (Montemurro) is going to make them look like BIG FOOLS!


MaryMalone

The two “long-term employees” who were fired by Montemurro might be ready to talk.


WiseGuy

It still doesn’t make sense as to why Hill resigned. Something doesn’t smell right. Hill was in the thick of it for years, aiding and abetting the OCSD disfunction at every turn, and now he resigns and suggests Oceano’s assets be turned over to other interests.


The people of all of San Luis Obispo County should not stand for this mess to remain unaccounted for, and the crooks to remain at large.


This is a travesty.


MaryMalone

Perhaps Mr. Hill realizes that he is already exposed to enough liability being part of the SSLOCSD oversight board, and doesn’t want to add the OCSD liability to his “portfolio” of things that keep him awake at night?


Seriously, it is only a matter of time before either of these issues pops, and when one does, I would think the other one would, too. What the heck, they’ll have the FBI here in town, anyway, might as well investigate them both at the same time.


The LATimes today published an article stating that the State Controller is now investigating the City of Montebello for, among other things, YEARS of not filing correct financial information with the state, or filing it late. There are $millions estimated as “missing.”


Now, if you were already on the SSLOCSD oversight board, would YOU want to stay on the OCSD board, too?


Heck, with any luck (for him) he will be off the SSLOCSD board, as well, once the OCSD gets its new council members cherry-picked from their pals.


Disgusted

Mary,

Won’t Jim automatically be off of the San District since he’s no longer an elected official? Also, do you know, and can you share, the names of potential OCSD applicants? With any luck, there’s actually a chance for a responsible majority.


Kevin Rice

Of course Jim is off the San District. Mary is slightly underinformed. You can’t be the OCSD rep on the San District if you’re no longer with OCSD. Also, OCSD has “directors” not “council members”.


Disgusted, there are three actual applicants that I know of, and a couple more possible.


Disgusted

Glad to hear that, Rider. Quite an undertaking, and shows that some aren’t deterred by the difficulties facing the district and truly want a better Oceano. may the best applicants be chosen, and serve respectfully.


MaryMalone

I’m aware a member of each governing group for OCSD, AG and GB make up the SSLOCSD board, but I’m not aware how quickly OCSD appoints its new members, and how the transition happens between both boards.


MaryMalone

I dunno. Doesn’t seem like “luck” has been on Oceano’s side for a long time.


Booty JuJu

Yet they won’t default will they? No, why should they? Just because they’ve run out of other people’s money is no reason to stop the gravy train from rolling full tilt much less institute “austerity measures”, i.e., admit we’re skint and attempt to spend less then we confiscate from the private sector slave population.


Why should they when they can…simply… take…your…money and keep on rockin the casbah into early retirement and leave the wreckage for your children to clean up for the rest of their lives? Taxes will be raised and services will be cut in order to fund the gold plated promises made to our “civil servants” by those who rely on them to remain in elected positions that are far above anything achievable to them in the private sector.


Rest assured they will make damn sure their slice of the pie they have greedily gorged on for over 30 years remains intact. The fat, talentless, grey zombies are not interested in anything but their own vested financial interests. Solidarity bruvvers? Well, only for the likes of you and me to pay their wages and mortgages and retirements whilst they dictate how we must live from their public sector empires .


The Gimlet Eye

Bullseye, again. You are batting 1000. Keep ’em coming.


WiseGuy

There is a concerted effort to take Oceano’s water and give it to business interests outside of Oceano. The people of Oceano are being scammed and ripped off. There is a reason why people want the chaos in Oceano to continue.


RealOkie

Ah yes, and it begins. The first bankruptcy of many to hit SLO county is coming. And it is about time.


WiseGuy

This isn’t a bankruptcy to blame on the recession. OCEANO WAS FRICKIN’ ROBBED! And all the agencies involved with law enforcement aren’t lifting a finger, as the vulchers circle to eat up the assets of Oceano for their own personal profit. They lust for water, as others have lusted for gold, and they don’t mind harming communities to quench their diabolical thirst and greed.


MaryMalone

Montemuro seems very intent on selling Oceano water rights. Which other options have been thoroughly investigated?


Grants and loans are great, but to get State or Federal funding now, a water purveyor has to show they have a solid water conservation program in place and operational. In the future, the water purveyor will have to show a certain percentage of water conservation. This is secondary to ex-governor Schwarzenegger’s “20 x 2020 Program,” which mandates California water purveyors have to show 20% water conservation by the year 2020, with incremental percent goals along the way.


If the water purveyor doesn’t, they won’t get State funding and, in some cases, Federal funding, as well.


The fact that Montemurro has been unable to complete his audits in a timely fashion has dropped this bombshell on OCSD in a most unfortunate way. How much further has the road towards insolvency been traveled in the time Montemurro was not completing the audits? Would it have been easier for OCSD and its board to deal with the problems earlier, had they known?


And, again, the appearance that Montemurro is focused on selling water rights–sorry, but that is very suspicious, IMO.


Maybe it is time for the OCSD board to get an outside analyst, familiar with water issues in California and CSDs, to analyze where OCSD is and what are all of its options.


Just my opinion, here, but, based on Montemurro’s background and performance at OCSD, and his fixation on selling OCSD’s water rights, his work and recommendations should be evaluated by an independent, non-conflict-of-interest-laden outside analyst.


Typoqueen

AG would be the solution. AG needs their water and AG seems to be run better than GB. With Monte at the helm there’s no way Oceano will get any better, that guy is as shady as shady gets. Not saying that Monte has his hand in the till but if not then he’s just the bumbling fool that he appears to be.


Poor ole Oceano, they just can’t seem to get any good leaders.


Disgusted

It wouldn’t be prudent to ask either GB or AG to take on Oceano’s problems. And Oceano has it own persona as well. It’s best left in County hands, maintaining its water surplus for value.


Typoqueen

I’ve been told,,which of course doesn’t mean it’s true but it does seem apparent that the county is as sick of Oceano as the are Los Osos. I’ve heard that they just wish that Oceano would go away that’s why they do nothing to help them out. I think the county would love to see Oceano merge with another incorp. city so they can get them out of their hair.


I feel bad for the residents of Oceano. It could be a nice little community but it doesn’t seem like that will ever happen.


Side_Show_Bob

Let Grover have that cesspool. Arroyo does NOT need that mess leaching off our Public Safety system or any other tax payer funded services.


Perhaps they can go to their Sister City of Tijuana and recruit the monetary help they will need.


MaryMalone

AG’s mayor, Tony Ferrara, has been very helpful in covering up John Wallace’s mismanagement of the SSLOCSD, including the 3-million-gallon dumping of sewage into the streets and homes of Oceano, and into the ocean. In fact, Ferrara went so far as to not inform the rest of the AG council members about the ongoing problems at the SSLOCSD, as is his responsibility as AG’s representative on the SSLOCSD’s oversight board.


So I don’t think AG owns the right to lord it over any other town, and I wouldn’t wish AG’s management on Oceano, either.


Can you imagine if Ferrara had access to shuttle Oceano services and projects to John Wallace?


unoudo

Oceano residents deserve more, foolish statement. So not AG (NIMBY Bob?), but GB? And Tijuana as Oceano’s sister city; how ridiculous and sad. Good grief.


joeschacherer

So Montemurro thinks grants and loans might be available. How could this come about when he can’t write a memo or letter without leaving spelling and grammar mistakes throughout?


RU4Real

I’ve said it before & I’ll continue to say it: The small un-incorporated communities can NO LONGER afford these ill conceived Community Service Districts…The infrastructure is NOT IN PLACE to support a CSD. The un-incorporated areas were more efficiently run when the County was handling them. The County already has the PAID employees to handle the work in these areas, why are we so stupid to think that it’s WISE to duplicate efforts. We’re already paying for County workers, no reason to pay again for “employees'” for all the various CSD’s. Let’s find a way to DISSOLVE the CSD’s once & for all.


MaryMalone

The CSD infrastructure is supposed to support the community.


I don’t think it is logical to throw out the entire system of CSDs because OCSD and LOCSD have had problems. Like city governments, CSDs are only as good as the elected officials and staff that run them.


I see Los Osos and Oceano as being two ends of a problematic spectrum involving community involvement.


Oceano: there’s a community?


Los Osos: community involvement to the point of lunacy.


Activists who make enough demands for cost-intensive actions (like endless “studies” on whatever) will probably get a board, sooner or later, who will cave in to them, whether the demanded actions pass the cost-benefit analysis or not.


Then we hear the activists pitch a fit when the rates have to go up to pay for operating expenses.