Audit questions millions spent by Victorville’s water district (April 30, 2015)

VICTORVILLE — City Manager Doug Robertson responded defiantly to a report by the state Auditor’s Office released Thursday, pointedly accusing auditors of overreaching, biased and inaccurate findings in their harsh criticisms of the Victorville Water District, which the report suggested might have illegally spent millions of ratepayers’ dollars.

Titled Differences in Costs Affect Water Utilities’ Rates, and One Utility May Have Spent Millions of Ratepayer Funds Inappropriately, the report had been requested by the Joint Legislative Audit Committee and sought to examine the rates of Apple Valley Ranchos Water Company, Golden State Water, and the Hesperia and Victorville water districts for fiscal years 2011 through 2013.

But while the report dug into the rate factors for the four utilities, it also ripped into the Victorville Water District for a series of questionable and possibly unlawful decisions, which Robertson said had been fully vetted in two Grand Jury investigations.

The report said two loans in 2009 from the water district to the city totaling $21.9 million resulted in harm to the ratepayers. It also blasted construction of a $31 million wastewater plant during the same period — $11 million of which came from ratepayer revenue.

To the extent that the water district used revenue from water delivery fees to construct the wastewater plant, the construction of the wastewater plant may have violated Proposition 218, it concluded.

While the plant was intended to ultimately provide reclaimed water for district uses and ratepayer benefit, auditors said they believe the primary purpose for constructing the wastewater plant was to meet the wastewater needs for the beverage company (Dr Pepper Snapple Group) and not to produce reclaimed water, a side benefit that has not yet been realized.

Among other criticisms, the report also said that although rates had been kept low in part through deferred routine maintenance on district infrastructure, a rate increase in 2014 and another expected hike this year might have been avoided altogether if not for some inappropriate transactions.

In a three-page open letter to State Auditor Elaine M. Howle, Robertson aggressively pushed back against the report, alluding to auditors stepping outside the scope of the study’s purpose with woeful inaccuracies and redundant conclusions that had been addressed after San Bernardino County Grand Jury investigations in 2010 and 2012.


Meanwhile, state auditors recommended that the city adopt a policy by October 2015 prohibiting transfers or loans of water utility revenue for nonwater district purposes, as well as consider using revenue from sources not water rates to install rate assistance programs for low-income ratepayers.

Source: Shea Johnson, Daily Press