Good news, bad news from Oceano

March 31, 2014 

What’s happening in Oceano? Following recent events — including the dismissal of the general manager — it’s a question being asked often these days, both inside and outside of the community.

Some of the information coming out of Oceano is sobering and some of it is encouraging.

Here is an overview of some recent developments within the Oceano Community Services District and the South San Luis Obispo County Sanitation District — the two agencies that provide water, sewer, fire and other basic services to the community.

Oceano Community Services District

On March 14, the OCSD board voted unanimously to terminate our general manager. Our most recent general manager was our third full-time general manager since 2009. Given the challenges and needs of the district, as well as the all-too-short tenure of prior general managers, best practices were instituted whereby an outside committee of professionals was engaged to assist the board with the hiring process. More than 50 candidates were screened and multiple candidates were interviewed before one was hired. However, after almost six months of employment, the Board of Directors felt that the needs of our district could be better addressed and our manager was released for cause.

Despite the difficulties in recent years, there have also been many successes. The OCSD has instituted new accounting and budget practices and caught up and completed five years of back-logged audits, which are required by law and necessary to procure funding. Last year, Oceano was one of the first local governments to complete the required audit and the budget process for the next fiscal year is well under way.

In the past six months, staff has worked on inventorying all assets and infrastructure of the district, including identifying the life cycle of each item, the initial cost of each and the replacement cost of each. This analysis is being put together in a single document which we are calling a “pro forma.” The purpose of this is to help us build a budget that will project out the capital, infrastructure and material needs not only for the next fiscal year, but five or more years. This is proving to be an effective tool in identifying current deficiencies and the real-world cost of reliable and safe delivery of our services. When this document is completed, it will show that much of the infrastructure’s life span expired not only years ago, but decades ago.

This process is providing a picture of the condition of the infrastructure and the finances of the district. Although the picture is not rosy, we are not dissimilarly situated from many other public entities who have aging infrastructure and lack the capital funds to replace it.

Since summer, field staff has developed and instituted an infrastructure preventative maintenance program, primarily for water and sewer lines. For the most part, there were no records of preventative maintenance and this was made a priority. We found that the majority of the infrastructure — including water and sewer lines and valves — had not been maintained since 2006.

The OCSD budget is currently balanced. Notwithstanding, without critical attention this district may find itself insolvent in the near future. Our county is well aware of the pain that financial mismanagement and personal agendas have wreaked on other districts. We are actively seeking to avoid that pain. The OCSD board expects some very difficult decisions in the future and is prepared to make those.

South SLO County Sanitation District

The SSLOCSD’s sewage treatment plant, which serves Oceano, Grover Beach and Arroyo Grande, is located in Oceano. A three-person board, with a representative from each community, oversees the district. In December 2010 there was a significant sewer overflow, resulting in a pending fine from the state of California for more than $1.1 million. The findings and fine are currently under appeal.

In the years preceding 2013, the sanitation plant operated on a negative budget, drawing more than $500,000 per year from reserves. It also was regularly violating its discharge permits. A 2011 Grand Jury report was critical of the operations.

These losses and discharge violations were unsustainable. In early 2013, the board stepped back and looked at the state of affairs and made the ultimate decision to change management and engineering firms. A pro forma was completed and all plant operations were reviewed. What has happened has been a complete turnaround. For the 2013-2014 fiscal year, the sanitation district had the first balanced budget in years. At mid-year, the district has used only 33 percent of its allocated budget, realizing a significant savings.

Equally important, the sanitation district went about 10 months without violating the discharge permits through the ocean outfall and there have been no sewer overflows since 2010. These are the kind of results that the community expects from local government.

Challenges remain for each entity. But Oceano has received an outpouring of support from our local government officials and our community and is not alone in its efforts. We will continue to seek out and implement best practices and the board and staff are dedicated to the continued safe, reliable delivery of our core function services. We are imminently thankful for the support.

Matthew Guerrero is president of the Oceano Community Services District board of directors and chairman of the South County Sanitation District Board of directors. He’s served on the CSD board since 2011 and on the sanitation board since 2012. Guerrero is an attorney with the Public Defenders Office.

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