On Wednesday, March 14, 2012, Jackson residents Ken Perano and Ken Berry filed a
lawsuit in Amador County Superior Court against the Amador
Water Agency (AWA).
The suit alleges that the AWA has violated Government Code section 66013 by failing to issue accurate and timely reports required by law.
“We want to hold AWA accountable for telling people where their money is going, as required by state law,” said Ken Perano.
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AWA is not properly and legally accounting for public funds
AWA is not compliant with Government
Code 66013 that restricts the use of participation fees to the
specific uses for which the funds were collected. (Participation fees are collected when a new customer connects to the system).
AWA does not keep proper records of the specific purpose for which its fees are collected. Therefore, there is no way to know
whether the fees have been used for the proper purpose. Also, some of the participation fee funds have been used to
fund debt in other systems within AWA.
- Government Code 66013(c) states that all funds collected for capacity charges must go into a restricted account and
must be used only for the purpose they were collected. AWA has created two annual reports
(FY 2007/2008
and FY 2008/2009) to comply with Government Code 66013. The reports
show the use of funds from the restricted accounts, but they do not show what the funds were to be used for. Without
knowing what the funds were collected for, there is no way to legally spend the funds.
- At the very least, the reports only show expenditures and not the source and purpose of
funds collected. This is a questionable business practice that should be corrected. At worst, poor reporting allows
AWA to spend restricted funds in ways other than how they are legally required to be spent.
- A $500,000 Department of Water Resources (DWR) grant awarded in 2005 was finally paid to AWA in January 2010.
The funds were for the Amador Transmission Line (ATL) Project. These funds should have been used for the ATL payments
or at least put into a restricted account to be used only for the ATL. There is no accounting for the use of the
$500,000 because
it was taken as revenue for an earlier budget year that has already been audited.
- The March 2011 detailed report of revenue and expenses (see page 53) shows that $139,000 had been spent
on AWS capital projects through March of 2011. However the 2011 year-end report
(see page 15) shows only $49,000 was spent
on AWS capital projects through June 2011. AWA’s fiscal year ends in June; expenditures should always be greater in June
than in March.
- Amador Water System (AWS) is one of four water systems within AWA. Each of the systems has separate accounting. However,
starting around 2005 many of the restricted funds collected for AWS fees were transferred to cover debt on other water systems in
AWA. The transfers were not memorialized as loans until 2010. Ratepayers on the systems that borrowed the funds were not notified
of the enormous debts they were accumulating until AWA asked for a rate increase to cover the debt and other costs. A majority of
ratepayers on each system have protested rate increases and now it is difficult to say if AWS’ restricted funds will be paid in a timely
manner or at all.
These are just some of the examples of AWA not properly and legally accounting for public funds.
This is not in the public’s best interest and clearly violates AWA’s vision statement. For years, ratepayer money
was spent without informing them, and funds in restricted accounts on separate systems were used to fund those debts.
Because the funds were used for purposes other than those for which they were collected, ratepayers have not been reimbursed
for the assets that they have purchased over the years. These accounting practices are costing the public greatly and the Agency
is failing in its service to the public.