Why is Oceano taking from rate payers to pay for fire services?

May 27, 2020

Julie Tacker


Oceano Community Services District, like most every little government entity, struggles financially as a matter of course. This month they look to adopt next fiscal year’s budget. The news is not good, the 2020/21 preliminary budget identifies significant issues that pre-date the current pandemic; as proposed, the sewer fund will be robbed to pay for fire department services and the water fund is in serious deficit. There is an immediate need to raise water and sewer rates.

The fire fund, which pays Oceano’s portion of the Five Cities Fire Authority through a Joint Powers Authority with the cities of Arroyo Grande and Grover Beach was revised and approved last June. The district agreed to pay more than it can afford and an attempted to pass a ballot measure to fund their contribution, for $180 annually per parcel, failed by a slim margin. Another attempt to pass such a measure is also likely to fail, certainly now as the Coronavirus has had worldwide financial implications.

Oceano is now in the fire authority “wind down period” which leaves them in the fire authority until June of 2021 – if they can pay the agreed upon amount $1,138,148.

The three agencies are considering holding the funding formula together an additional year, to give Oceano another crack at passing another tax measure. But, the only way Oceano can fully contribute financially this year is by deferring a payment of $90,865 from an interfund loan made to their sewer fund. The proposal before the board today is to only pay the interest of $23,075 (6%) towards the debt. This approach, and the idea that they may draw from this same source the following year, is fiscally irresponsible. The classic cliché of, “Robbing Peter to pay Paul” fits here.

The interfund loans were established in 2017 to finally pay back the sewer and water funds for 2003 construction of the sheriff substation. Due to over-paying general managers, mismanagement, incompetence and procrastination the district had failed to repay the accounts earlier. By deferring payments the term of the loan will have to be extended each year that the principal repayment is deferred, further depleting sewer reserves and continuing to delay important infrastructure improvements which could lead to larger problems later on.

The water fund deficit is a consequence of several factors; a shortfall in revenue over the last several years is the result of reduced water consumption by the community. By design, a change in how administrative charges are being allocated between the water and sewer funds and unfunded and unanticipated costs associated with some large repairs in the system have also resulted in the fund being nearly $500,000 in deficit.

The state of these two funds, water and sewer, will require the district to implement a Proposition 218 water rate increase in the very near term.

At tonight’s meeting, the board will also consider giving direction to its fire authority representative, Karen White, on how to vote for a pay increase for the union represented firefighters. Negotiations, prior to the coronavirus, culminated in a 2 percent increase and a $1,000 one-time retroactive payment to these firefighters. White will argue, because the funding formula was agreed upon, the action to raise pay is “already approved” and if the fire authority board doesn’t increase pay to the firefighters, Oceano will still have to pay its agreed upon share.

Oceano is not immune to the financial effects of the coronavirus. ‘All bets are off’ right now while all government and the private sector is slashing services, cutting salaries, laying off personnel, implementing hiring freezes and deferring or cancelling contracts. Oceano needs to take a step back, look at their entire financial picture and make the same hard choices other agencies have had to make, including the reduction of administrative costs.

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The majority on the Oceano CSD Board continues to operate as if there is no global pandemic impacting community health and the finances of residents, the District, local cities and the county.

At last night’s Oceano CSD meeting, the Board:

• Told staff to move forward with a proposed budget that takes money from other service areas, including wastewater, to pay the Five Cities Fire Authority at a level we can’t afford

• Green-lighted a raise and bonus for FCFA firefighters

• Approved four fireworks stands, despite failing to follow the process required by OCSD ordinances, a lack of enforcement of relevant laws by the Sheriff, and the risk to residents of increased coronavirus exposure from drawing out-of-area crowds to our town

I alone dissented from all of these decisions.

The OCSD will soon ask residents to pay more for water since that service is operating in the red, although many are hurting as the pandemic drives unemployment to new highs. Local governments are facing budget shortfalls as the lockdown drives revenues lower. This is the time to evaluate how the District can tighten its belt and live within its means. It’s not the time to pretend there’s no pandemic.

There will be a public hearing on the proposed budget on June 24th.

All non-advisory functions need to revert to the County. Just like the California Valley CSD, too small and too corrupt to function effectively. All the real workers should keep their jobs doing the same work and become County employees. The County absorbs management and HR functions for pennies on the dollar and bingo, money to pay firefighters and repair neglected utility infrastructure. Administrators, well they can apply for jobs as other agencies as they become available.

Someone needs to get ahold of that organization. First the general manager’s salary needs to be reviewed (an organization of this size doesn’t command this kind of salary unless the holder of the position is creating fiscal miracles – in the instant case this appears not to be the case). Second, the Fire Chief needs to be replaced. Allowing salaries for the department that approach Stanford Medical graduates is out of line. Who is running the show, one could only wonder what the salary increase would had been had the parcel tax passed? Third, the lease payment for the Sheriff’s facility needs to be applied to the sewer/water fund and nothing else.

This is a time for clear, responsible management is now. The ship is sinking.

Ah, come on Mitch. The current GM salary is only $170K, they’re saving a ton of money without Paavo’s $206K annual salary for the last 6 years. These salaries and benefits could have kept them in the FCFA for many more years — now they’re in a real pickle.

Well Mitch Cooney – I’d love to see you at the podium saying that to Linda Austin’s face!

I have nothing but the greatest respect for Linda Austin, her father and mother. They were and are all Oceano.

Since I don’t use some phony name and the name I use in this site is mine I believe that I have already made my position known to Ms. Austin and to anyone else who is interested.

My comments were aimed to assist, if they missed the mark I am sorry, I am available to assist: all Ms. Austin needs to do is ask

Linda Austin is the captain of the ship you declared is sinking.

And: your point is?

And: your point is?

Answered – “made”.

We need new people running the OCSD. The constant mis-management and incompetence of the current Board has got to stop. Their only solution to every problem that they cause is a new tax. NO NEW TAXES!

Throwing your hat in the ring “Kalifornia_Bud” ?

Without breaking up the current board majority, one or two new members are not going to make a difference. The tail (the current GM) is wagging the dog’s ass (the current board majority) at the moment.

The board majority are also allowing the GM to hemorrhage unbelievable fund$ on attorney fee$, $ince the board fighting among$t it$elf deflect$ focus off him and onto each other’$ “mean girls club” behavior, while the district’$ legal coun$el rack$ up invoice after invoice, refereeing the$e ridiculous verbal $kirmi$he$ and $quabble$ that go nowhere in the end.

Spot on Julie. Oceano refuses to admit they have a problem and will stay the course.