Report 2015-102 Recommendation 5 Responses

Report 2015-102: Central Basin Municipal Water District: Its Board of Directors Has Failed to Provide the Leadership Necessary for It to Effectively Fulfill Its Responsibilities (Release Date: December 2015)

Recommendation #5 To: Central Basin Municipal Water District

To ensure its water rate structure is appropriate to provide the revenue necessary to cover its legitimate costs, the district should complete its planned water rate study no later than the spring of 2017.

1-Year Agency Response

A consultant-led water rate study was completed in August 2016. On August 22, 2016, the District's Board of Directors approved rate increases for FY 2017 and FY 2018 sufficient to improve the District's debt coverage ratio above requirements for a five-year period. The resulting five-year financial projection is now being used by the District's financial advisors to accomplish re-financing of the District's 2010 Certificates of Participation in October 2016.

  • Completion Date: September 2016
  • Response Date: September 2016

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The FY 2017 Operating Budget was adopted by the Board of Directors on May 23, 2016. The Budget includes funding sufficient for a water rate study contract. Also on May 23rd, the Board of Directors authorized the release of a Request for Proposals for consultant assistance to create the rate study. The District plans on presenting a comprehensive rate adjustment plan to the Board of Directors for approval on September 26, 2016.

  • Estimated Completion Date: January 2017
  • Response Date: June 2016

California State Auditor's Assessment of 6-Month Status: Pending

60-Day Agency Response

Staff will commence work on the water rate study as soon as the long-term financial plan is completed. Staff anticipates seeking the services of a consultant to assist in the rate study. A Request for Proposals will be drafted in May 2016. Funds for this service will be included in the fiscal year 2016-2017 budget.

  • Estimated Completion Date: February 2017
  • Response Date: January 2016

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2015-102

Agency responses received are posted verbatim.