The fiscal outlook for Cambria’s services district apparently isn’t quite as dire now as it appeared to be Aug. 11 when cash-flow projection reports were prepared in advance of an Aug. 19 meeting, according to officials.
In those reports, officials had estimated that by November, the Cambria Community Services District would run out of money and be operating at a half-million-dollar deficit. But with some incoming grant funds, deferred payments to some vendors and deep cuts in expenditures, that doesn’t seem to be the case now, according to General Manager Jerry Gruber and Finance Manager Patrick O’Reilly.
CCSD’s financial forecasts had even improved somewhat by the time the Board of Directors convened for their meeting, and the fiscal outlook has brightened further since then, Gruber and Board President Gail Robinette said in a phone interview Tuesday, Aug. 25.
The latest projected improvements came during a week of intense back-and-forth negotiating, legal consulting and conferencing that involved district executives, county representatives and officials of the state’s Department of Water Resources.
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The topic was releasing $4.3 million in state Proposition 84 drought-grant funds to CCSD, money awarded in December but which has been withheld until some problems were solved.
The district is still treading water, financially speaking, until it receives payments from two separate drought-related grants, the first for about $248,000 and the second for $994,265 of the $4.3 million grant.
Getting those funds soon would make a big difference, according to O’Reilly, especially during this lean time of year, when the district’s income is limited to customers’ payments for water and wastewater treatment. In December, the district receives property-tax funds from the county.
Both grant payments would, in essence, repay the district for some of the money it has already spent on drought-related projects.
The first grant, from the state’s Public Water System Drought Emergency Response Program, provides funds toward the district’s rehabbing of a Santa Rosa Creek-area well and filtration equipment, so water from that well would be considered drinkable.
The second payment will be for so-called “soft” nonconstruction costs for the district’s emergency water supply project, costs for which have risen to about $13 million. The soft-cost payment is part of the
$4.3 million Proposition 84 grant that’s been the topic of so many conversations and consultations in the past few weeks.
The back-and-forth, three-way negotiating continues among the state, county and CCSD about paying CCSD the rest of that $4.3 million grant.
According to Zaffar Eusuff of the state Department of Water Resources, the only remaining obstacle to the district getting its remaining Proposition 84 grant money is verification that CCSD has updated its approved groundwater management plan.
Having such an updated plan is a requirement of the grant, Eusuff said in an Aug. 20 phone interview.
He said a pending lawsuit is no longer an issue for the state.
Dan Buckshi, the county’s administrative officer, said Monday, Aug. 24, that “I’d love to see that in writing.”
Buckshi said he’d submitted paperwork for the soft-cost grant payment Aug. 20, and “if the state gives the green light and says there are no other issues on their end, we would consider submitting the rest” of the paperwork for the remainder of the grant funds.
First, however, the county needs a letter or agreement indemnifying it from any responsibility for repaying the $4.3 million if a pending lawsuit should somehow stop the already-built emergency water-supply project (EWS) from operating.
“It’s a little convoluted,” Buckshi said. “The county’s the middleman, the pass-through agency” for the funding.
“If the lawsuit prevailed, the county might have had to repay it. We want reassurance from the Department of Water Resources that the lawsuit’s not an issue and the county wouldn’t be held fiscally responsible.”
District directors on Aug. 19 authorized Gruber to execute an agreement to indemnify the county against those risks.
Gruber said he’s had “nothing but positive, encouraging dialogs from the county and the Department of Water Resources.”
He said negotiations were cordial and helpful during an Aug. 21 confab he attended with Robinette, Buckshi, Supervisor Bruce Gibson and district lobbyist Dean Florez (whom Gruber said has “played a critical role in all this … way beyond the scope of his work … keeping the lines of communication open”).
Lawsuit and EWS restart
The next step in the lawsuit comes Monday, Aug. 31, when the judge in the case is expected to set a trial date. LandWatch of San Luis Obispo County and the Stanford Law Clinic maintain the district built the project without meeting state environmental laws.
The EWS was constructed, and has had a three-month test operating period, under an emergency permit granted by the county because of the drought’s potential impact on Cambria’s water supplies. The district has applied for a permanent permit for the project, and a consultant is preparing an environmental impact report for the EWS.
Gruber said he expects the district will restart the EWS in mid-to-late September, depending on installation of some dechlorination equipment and what water levels are in a monitoring well on Santa Rosa Creek and in the San Simeon Creek wells.
He was to have met with Regional Water Quality Control Board officials Aug. 26, and Gruber said he plans to consult further with State Parks officials about the pending restart of the plant.
CCSD engineer Bob Gresens said Aug. 25 that the revised groundwater management plan would include EWS information, updated mapping and base and management objectives. Gruber said he hopes approval of the revised plan will be on the board’s Aug. 27 agenda.
Once the revised plan is approved and sent to the state and county, and county officials have the indemnification letter in hand, Gruber said he hopes the district will receive the remainder of the $4.3 million grant within 30 to 60 days.
If that scenario happens, Gruber said, the district can replenish its coffers for monies already spent on the EWS and have “between $2 million and $2.5 million back in our reserves.”
And, if the Proposition 218 rate-increase process goes as planned, and Cambrians agree to pay more for water and sewage-treatment services, those new rates could kick in as early as Jan. 1, he estimated.