Cambria CSD running out of cash
August 20, 2015
The Cambria Community Services District could run out of operating cash in about three months, District General Manager Jerry Gruber said. [Tribune]
The district’s financial troubles center around its emergency water supply project, which costs approximately $13 million, including state grant funds. But, the grant funds are in limbo, and the district is battling a costly lawsuit over the project.
On behalf of the CSD, San Luis Obispo County applied for a $4.3 million grant to offset expenses for building and testing Cambria’s new water treatment plant. The plant was constructed and test-operated for three months earlier this year.
The grant is available to the county and subsequently the CSD through Proposition 84 funds for drought-related projects. But, for the state to release the funds, the Department of Water Resources (DWR) must approve the project.
Over the past few weeks, the DWR has raised several concerns about the project. Concerns include the CSD’s water management plan, or lack thereof, and the lawsuit the project has prompted.
Last year, environmental group LandWatch of San Luis Obispo County sued the CSD, alleging it breached state law by rushing through the project. LandWatch argued the district violated the California Environmental Quality Act by skipping regulatory steps required to gain approval of the project.
If the lawsuit is successful, the district would have to repay the $4.3 million grant to the state.
Still, Gruber says the state is willing to release the funds. Gruber said, though, he believes county counsel has recommended the board of supervisors not pass on the funds to the CSD.
County Administrator Dan Buckshi said he questions how the district would manage to repay the funds, if it lost the lawsuit.
Gruber is requesting that the board of supervisors take the risk and deliver the grant money to the district. The general manager projects the district will have slightly more than $1 million in cash by the end of August and will run out of cash in about three months, if the grant funds are withheld.
Additionally, the district will spend nearly $250,000 battling the lawsuit, Gruber said. The district has already spent $160,000 on its legal defense.
Even if the plaintiffs prevail in the lawsuit, the Cambria CSD will not have to abandon its emergency water supply project, district spokesman Tom Gray said. In the worst case scenario, the district would have to wait until it receives a regular permit to operate the project, Gray said.
The project was approved under an emergency permit.