Eye On Modesto

Thoughts and observations about Modesto and Stanislaus County

Archive for the tag “MID Board”

MID Staffer Caught ‘Fudging’ The Numbers

By Emerson Drake 

At the 1/22/19 meeting AGM Finance/Treasurer Scott Van Vuren delivered a report that was supposed to layout our in-house and outside legal costs to allow the Board to make an educated decision regarding whether to hire a replacement in-house attorney or to hire an outside law firm to function as MID Counsel.  He made his presentation but both some members of the Board and the public had questions.  When we tried to get Van Vuren to total the two  pages, the first for $1.8 M  and the second for $1.8M each total is give or take $100,000, he was hesitant to respond, in fact he refused to respond to repeated inquiries.

We helped him with his math offering that it added up to approximately $3.6M but we couldn’t get him to say the words.  Finally he was forthcoming enough to state that there were additional legal costs he hadn’t included in the report. Most notably these were outside legal costs. When asked to place a number on these he said he’d have to get back to us and the Board.  Scott repeatedly said the missing numbers would be skewed by settlements. So some of the Board started following up with questions.  Scott kept using Turlock Irrigation District (TID) as his comparison.  But when asked to produce TID’s  numbers so we could compare apples to apples he claimed he’d need to get TID’s permission. Obviously Scott was stalling since these numbers are public domain.

Scott had been saying all along that we paid more then TID for legal costs but had nothing to back up his statements.  Questions were finally asked why he hadn’t checked with other districts for comparison. Obviously it didn’t suit his and Director John Mensinger’s preconceived position that outside services would be better.

John Mensinger kept trying to interrupt the questioning saying he’d heard enough but even Director Stu Gilman was getting curious now.  What they didn’t mention and since public comment is only 5 minutes so we didn’t get a chance to ask, was about the comparison.  TID’s budget is less that half of MID’s. ($164M vs $429M) and it’s safe to say that MID’s 122,000 electric customers are several times more than TID’s.  So why use them as a comparison?  So they can  get the predetermined outcome the ruling cabal desires.

And since we’re just trying to be helpful we have made a Public Record Request from TID for their legal costs for the last three years.  Scott seems to produce more reliable numbers when someone is looking over his shoulder.  The public needs to look out for themselves now since our compadres in this fight on the Board are out numbered.

It’s starting to sound like 2011 all over again.  And that bodes ill for the ratepayers.

For the follow-up see MID’s Missing Legal Costs

 

MID Intrigue, Betrayal and the Brown Act

By Emerson Drake  

Recently Modesto Irrigation District meetings are more like a Shakespearean play. They’ve had it all, palace coups, intrigue, betrayal,  possible legal violations and audit reports that stretch credulity.  And believe it or not we’re underplaying recent events.

Since it directly effects our wallets lets start with the most recent first, the 100 plus pages of the District’s Cost of Service Study Report.  Listening to the report of their meeting on line will mystify and amaze you while on occasion putting you to sleep.  When I hear “generally accepted audit and accounting standards” the hairs on the back of my neck rise up because that is the same verbiage we heard during the Enron scandal.  Remember Enron’s report suggested Enron was financially sound all the while the walls were crumbling down.

MID is fiscally sound but the reasoning behind the report is questionable. The whole purpose of this report is to defend them against an electrical ratepayers law suit. They change the words “electrical profits” to “discretionary funds” that can be applied anywhere the Board chooses. And as the magician says abracadabra there is no subsidy for the water side despite the annual shortfall of  $17M.  When evaluating MID’s reports keep in mind the old adage  ‘liars can figure and figures can lie and that well paid ones do it even better.”

The report’s cost of service numbers are skewed, in other words biased and distorted.  As we learned during the Mountain House discussions it all depends on which column they put costs into.  Or if they bother to account for them at all, after all out of sight is out of mind.  MID has a tendency to say once we decide to supply power to an area the expensive main feeder power lines and substations don’t count against cost of service. Yet someone pays the bill.  But that person is an imaginary one named ‘discretionary’.

While we’re still working our way through the report we haven’t come across the validation of supplying electricity at below cost to businesses while still covering their costs. If you have any doubts, it’s ‘Discretionary’ that is paying for it.  If you want to meet ‘Discretionary’ take a look in the mirror.

As we continue to review the report and receive information from our on-going public record requests, there will be more to follow.

 

 

MID-Gary Soiseth-Gualco Group, Shades of Martino Graphics – It’s Deja vu All Over Again!

By Emerson Drake  

Listening to a Turlock Mayoral forum and Amy Bublak making allegations that Gary Soieseth had started a consulting firm and intended to do business with the potential Turlock water treatment plant, set us on an interesting journey.  Trying to get to the bottom of charges that Gary was intending on doing business with a plant that was still on the drawing board is an uphill battle to say the least, but we did file a (PRR) Public Record Request on October 24th to discover any MID connections to Gary’s new company. We later learned the company’s name in a Bee article,it’s called Central California Advisors.

 

According to documents obtained Gary’s contract negotiations had advanced to the closing stage back in July.  Only his potential contract was with The Gaulco Group as Senior Adviser and not his own company.  As you can see on the first page Gary was expected to start on 10/01/18.  Yet he told the Bee he had already done some work for MID on the Federal licensing of the hydro-electric generator at Dom Pedro Dam.  Strange since the federal lobbying/advisers are another company and that company doesn’t show up in the PRR. 

And now is where it gets interesting.  It the Bee article General Manager Scott Furgerson says “Soiseth had done minimal work on behalf of the MID in his new role.” Yet there is no contract with Gary’s new company or any mention of Gary being added to the Gualco Group and no money trail to date.  MID Public Affairs Spokesperson Melissa Williams spoke with us and verified Gary Soiseth had indeed done some work for MID but is being paid by Gualco, not MID, but she did not have any information regarding the amount of work or money involved.  She also stressed that Gaulco was paying Gary and not MID.  Yet, despite her assertions, if Gualco is using Gary to work for MID then MID meaning WE are footing the bill.

 

For those who don’t remember Martino Graphics, Tom VanGroningen, and MID’s attempted water sale, let me provide a little background.  During the time leading up to the water sale MID kept saying they didn’t have contracts with individuals to support their attempts at selling our water to San Francisco.  They kept denying knowing to whom the money was going even after multiple PRR’s were filed.  Finally they admitted that they had a contract with Martino Graphics for over $234,000 and Martino Graphics had contracts with a variety of local politicos, some of whom came to MID to publicly support the sale.   And now we have MID first denying any contract with Turlock’s Mayor and former MID employee Gary Soiseth, either with his company Central California Advisors or Gualco Group, and yet MID is paying Soiseth through Gualco Group.

 

Remember Nick and Larry fought the underhanded Allen Short and Tom VanGroningen for our water their first year on the Board.  It’s no wonder Directors Nick Blom and Larry Byrd called for an investigation.  First Gary gives his notice and then he changes his mind and delays his departure date. Was it to ensure he gets vested for his five years of service or to give  MID’s General Manager Scott Furgerson time to negotiate his severance package, ie: his new job?  And why is his former boss feathering his future nest?  And now the kicker…employing Gary through Gualco will cost MID an extra $36,135 per year if he gets his raise.  But since it became public his first “special” arrangement goes away but a second one, almost a secret one, delivers the goods.

 

The only way we can see General Manager Scott Furgerson originally supporting  this or pushing forward with this semi-clandestine arrangement is if MID Directors John Mensinger, Paul Campbell, and Stu Gilman are on board.  Which opens the door to another question…what other secrets or surprises are we in store for?

“The House” Panics and Takes Down The Infamous Video

By Emerson Drake  

The House Modesto take Three:  We’ve all heard the bluster from Pastor Glen Berteau and others regarding his and the church’s endorsement of Stu Gilman for  the MID Board.  The Pastor claims they’ve done nothing wrong and that all the attention for violating IRS regulations and the Johnson Amendment he and the church has been receiving is unjustified.   We’ve done nothing wrong he’s stated.  Yet the good Pastor refuses to go on camera or return our phone calls

But it has become obvious that both the church and the Pastor have blinked.  When you go to the link to the sermon we provided in an earlier story you’ll find that  “This video has been removed by the user” sign on their YouTube page.  If the video proves their innocence why did they remove it?  Sounds like they’re trying to hide the smoking gun.  Last Sunday, 11/5,  we couldn’t help but notice the live 11 am service was a rerun from the week prior.

Channel 40 out of Sacramento finally caught wind of the scandal and has run with the story.  Our only surprise it that it took so long and that others haven’t followed.

This endorsement by a church, a nonprofit 501(c)(3), brings shame on Stu Gilman, his supporters, The House, and all of Modesto.  If you want to endorse candidates for political office pay taxes like the rest of us.  You shouldn’t  pretend to be a church if you’re going to act like a political organization.

 

Modesto Irrigation District Wastes $75,000 on Outsourcing

By Emerson Drake   

Among today’s action items on MID’s agenda was one to hire third party administration of their basic retirement plan. So in layman’s speak they intend to outsource the insurance part of the retirement plan.  MID has had two positions designated for handling questions and assisting retirees but for two years now only one has been filled.  I wanted to provide the two-step song and dance given to the Board by the Human Resources head but the video isn’t up yet.  I was so captivated with the jargon used I wanted to share it but that will have to come later.

Suffice to say the head of H.R was unwilling to commit to doing away with a position they haven’t needed in two years because it might become necessary AFTER they outsource the majority of the positions duties.  Interestingly enough only Director John Messinger agreed that MID wasn’t saving money but spending an extra $75,000.

When John asked if Human Resources was going to come back before the Board to request the unused position  be filled concerns were voiced by other Board members that the Board had never micro-managed the staff before and they shouldn’t start now.

So lets summarize the issue.  They have two positions designated to perform the job tasks and one of them has been vacant for two years.  They intend to out-source the majority of the job for $75,000 a year yet aren’t willing to give up the unused position.

Believe it or not the final vote was 4-1 (Mensinger being the one “no” vote) to spend the extra money and to leave the position available to be filled without oversight.

At today’s meeting being fiscally responsible wasn’t what you would call their long suit.

 

MID’s Fun With Numbers

By Emerson Drake    MIDpic

The Tuesday meeting of the Modesto Irrigation District Board was another head shaker.  The topic of our interest was the 2016 rate workshop which was conducted by MID’s Planning, Pricing and Risk Manage,r Jimi Nitniss.  Now Jimi, whose compensation package comes to around $195,000 a year, has questionable goals and apparently has way too much time on his hands.

How Do You Lower Rates and Remain Revenue Neutral?

If you take a look at your bill you’ll notice a fixed monthly charge of $12.50, an environmental adjustment and a capital adjustment. And of course the really bad news, your electric usage.  But MID Staff has a way for you to lower your electric rates but at the same time pay the same amount for the first 500 kWh.  Huh?  That’s right some might call it smoke and mirrors but MID says it’s all the rage with other utilities.  MID_2016_Residential_Rate_Design

“This Will Make the District Look Like Heroes”  PaulCampbell

That’s a direct quote from MID Director Paul Campbell at Tuesday’s workshop.  See it isn’t about making things better,  it’s about making them appear better.  Staff wants to raise your fixed fee from $12.50 to $20.00 and charge less for the first 500 kWh.  So the cost is a wash or revenue neutral. BUT  MID gets to say they have the lowest residential rates around.  So how does this help us?  It doesn’t.  It’s all public relations. The electric rate remains the same for everything  more than the first 500 kWh  used, .18 per kWh.  Lots of fanfare with little or no effect.

The Driving Force Behind the Change

Jimi says since Turlock Irrigation District (TID), Sacramento Metropolitan Utility District (SMUD), and Roseville all do it it must be a good idea.  The idea is to have fixed cost on your bill to more accurately cover MID’s fixed cost.  But it still doesn’t cover it all of the fixed costs, all it really does is pretend to lower your bill, which of course it doesn’t do. To our mind it’s like a placebo for electric ratepayers.  And at the end of the day you still have the headache.

Our suggestion

Most people don’t realize just how much the residential ratepayer subsidizes industry in Modesto.  Right now you’re (residential) paying .16 per kWh in the summer and .13 per kWh in the winter.   Large industrial  businesses around Modesto are paying as little as .05 per kWh summer and .03 Per kWh winter rates.  Do you know that .03 is cheaper than the cheapest power MID buys (Don Pedro hydro is almost .04) but hey as long as homes are paying .16 and .13 who cares?  If MID wants to emulate Roseville and SMUD and virtually ALL of the utilities in the Bay area they will bring industrial and residential closer in line.  For these bay area companies don’t use they residential rates to subsidize their industrial base like we do.  And if you’re curious farmers and ranchers  are paying  .10 per Kwh summer and winter.  Forget the water subsidy, open your eyes to the electric subsidy.

If you would like to watch the workshop you can see the magical effect of the rate adjustment on the MID Board.  There will be a public hearing in November, so stay tuned.

Vance Kennedy Voices Concerns to the MID Board

By Vance Kennedy

1.  There is an estimated minimum need for about $35 million dollars in funds to answer requirements for Don Pedro

Drip Irrigation Layout and its parts.

Drip Irrigation Layout and its parts. (Photo credit: Wikipedia)

reservoir and the MID irrigation system.  That number is a very approximate one.  To the best of my knowledge, funds have not been saved for this.

2.  That money is too large to be obtained by immediate charges, so a bond issue is necessary.

3.  Recent comments by the head of the Federal Reserve, suggesting an easing of bond buying, caused a very rapid jump in 30-year Treasury interest rates of 0.8 percent.  That still leaves interest rates far below long-term averages.  However, the Federal Reserve immediately hastened to try to calm the fears of a rapid rise in interest rates.  It helped, but did not cause interest rates to return to the prior low rates.

4.  In the past, large-scale printing of money resulted in large increases in inflation, but with a variable time delay.  It seems reasonable to assume a similar occurrence in the future.

5.  Now is the time to sell bonds before the Federal Reserve actually does raise interest rates.

6.  A source of bond repayment must be identified before the bonds can actually be sold.

7.  That means an equitable distribution of charges to water users is needed, which will take time, but the time available is very, very short if we are to take advantage of existing low interest rates and before inflation takes off.

8.  The only way a bond can be issued rapidly is to use MID’s overall credit, with a definite written agreement that raw water users will repay the rest of MID customers as soon as possible, and that means very promptly, with no exemptions.

9.  That will require a major, perhaps gradual, charge causing water rates to increase greatly.

10. When water rates increase greatly, many farmers may forego flooding and use drip irrigation.

11. That will result in dropping the water table greatly, just like in the foothills, due to lack of sufficient groundwater recharge.  Also, it could cause a permanent loss of rights to river water, since flood irrigation is greatly reduced and canal water will not be used beneficially.  That loss of water rights should apply permanently to farmers going to drip irrigation because once water rights are lost, they cannot be easily recovered if, indeed, they ever can be recovered.  Otherwise, drip irrigators will act like parasites on the flood irrigating farmers.  This problem with drip irrigation has not been widely recognized in the past, but can no longer be ignored.

12. To avoid the loss of water rights to the river, the farmers must continue to flood irrigate and pay whatever is required to retain the water rights to canal water.  Cities should also encourage farmers to flood irrigate, since groundwater is their backup in case of a severe or prolonged drought.

13. A rough estimate of the cost to pay off $35 million dollars over 30 years, and cover already existing costs, is on the order of $38 per acre foot, plus or minus $5 per acre foot, assuming the present interest rate of 4.8% on MID bonds.  That will mean at least quadrupling the present raw water charge.  Before city residents get all excited about their water rate increases, they should realize that the water charge is estimated to be less than 2% of their water bill.  Hence, their water bill might go up $3 to $4 dollars per month.  City cost now is 1/5 of a penny per gallon.

14. The immediate reaction to this proposal will be “No way”.  Farmers can either face reality now or pay a lot more in the not too distant future.  I challenge anyone to face the situation realistically and come up with a better way to solve our long-term problems.  Detailed explanation of these ideas have been provided to the Board members will prior to this meeting.  Do the Board members have any questions or comments?  Time is of the essence.  $35 million for each 1% increase in interest cost to pay off $35 million over 30 years.  The total increase in interest costs over that 30 years will be about $10.5 million.

MID Ratepayer Wants Safe and Tasty Local Produce and is Willing to Pay for It

By Joan Rutachow

I would to thank Vance Kennedy for his comments this morning.  I would like to comment on an article by Glen Wild that

Agriculture

Agriculture (Photo credit: thegreenpages)

appeared in the Modesto Bee on Sunday, April 21st –

Item #5 – “Those urban residents, the vast majority of our district customers, have their power bills inflated so that the MID irrigators do not have to pay for the cost of service.  It is estimated to amount to at least 3% of their power bill”.

Speaking for myself, a private citizen, I am happy to pay 3% of my MID bill for the irrigators!  Our irrigators raise livestock, grow hay and food crops.  They wake up in the middle of the night to irrigate.  They supply my food and the food for hundreds of thousands of people.  A 3% fee is a good investment!  3% of a $50 MID bill is $1.50; 3% of a $100 MID bill is $3.00, 3% of a $150 MID bill is $4.50.  3% is a small price to pay for all of the services our farmers provide.

Let us not forget that the farmers  subsidize the ratepayers.  Their water recharges the aquifer and agricultural products bring millions of dollars to our district.  Again, 3% of my MID bill is money well spent!

The Better Man

Modesto Marathon  8080

He speaks quietly and seems to always choose his words with care and caution. So when he speaks, he is respected and listened to. I know him to be a true and honest gentleman. He does have some challenging health issues, and has endured them with dignity and grace. Never once have I heard an excuse, or observed him being anything except professional. He has served our community for almost twenty years, never seeking any fanfare. The man I speak of is Mr. Paul Warda now serving on the Modesto Irrigation Board of Directors.

            Mr. Warda has made an impact in recent months serving the ratepayers of MID that will live on well past his or my lifetimes. I see Paul Wardas performance as nothing short of heroic and courageous. He has been able to see thru what was past routine practices and understood that change was necessary. I for one am truly grateful, and we all should be as well.

            I write this letter of gratitude because Paul Warda deserves to be recognized for his years of service, and the new direction for the Modesto Irrigation District that he played a huge part in.

I ran against Mr. Warda for his board seat in 2009.  I, today have no regrets. I lost that election to a great board member.

             

 Ted Donham

 

 

 

MID Board’s New Leadership Will be a Breath of Fresh Air

[CALIFORNIA-A-0021] Don Pedro Dam

[CALIFORNIA-A-0021] Don Pedro Dam (Photo credit: waterarchives)

By Emerson Drake

The Board meeting turned out to be as spicy as forecasted.  When the closed session was over and we were allowed in, we were met with a scowling Glen Wild.  Director Wild had his heart set on being the Board President but that didn’t come to pass.  While he had two years of experience on Nick Blom, Director Wild would have been Van Groningen’s lackey just as he has been for the last three years.   Besides we don’t need the old guard with their old obfuscating, covering-up ways continuing to run the Board.  Paul Warda nominated Nick Blom for President and Larry Byrd for Vice-President.  Both of those nominations were approved.

The Martino Graphics $49,500 bill was paid as expected but acknowledgement came from newer Board members of improprieties having been perpetrated by Management.  Joy Warren didn’t discuss the particulars, she only mentioned they were included in the handout (pages 116-130 in the pdf  from yesterday’s article.)    I pointed out that out of the seven specific areas the money was supposed to be spent, only one came close to the proscribed use and that was : Implementing a program to improve the image and credibility of the District with it’s ratepayers.  And, quite honestly, the $148,000 Allen Short spent with Martino Graphics did just the opposite.

Janice Keating, having been paid to speak on behalf of the water sale while pretending to be a private citizen (all the while being paid for her testimony)didn’t sit well with the majority of the Board or the public.  The money was actually spent on perverse lobbying efforts on the sale’s behalf.  Questions have arisen wondering if at least one of the “Community Columns” written in the Bee was bought and paid for.  Another question asked later “how many of those in the “paid employee category of Martino Graphics”  lobbied Bee Opinion Page Editor Judy Sly.”

Funnily enough, one thing that stuck in the craw of several of the Board members was the funneling of money through Martino Graphics to Carol Whiteside.  By laundering the money through Martino Graphics, Directors Byrd, Blom, and Warda weren’t aware Ms. Whiteside was “on the clock” when she invited them for breakfast.  The secret was shared by Directors Van Groningen, Wild, and General Manager Short. These three are responsible for at least $165,000 being spent on a clandestine  lobbying effort which failed.  I have little doubt this is among the many reasons Allen Short is being run out-of-town on a rail, albeit on a velveteen covered rail.  On this all we can all say is thank God he’s gone.  Now if only his two amigos would join him, but that’s just too much to ask.

An interesting revelation is how much “churning” attorney O’Laughlin has done.  He’s been requiring all Public Information Requests to go through him, and this just isn’t necessary.  At $300.00 per hour (from a prior Public Information Request) he’s been making out like a bandit with all of the time he’s claiming he spends on them, and without the overhead of a mask and gun.

I think the bottom line is the two problem children (O’Laughlin and Short) are on their way out the door and those  now in charge are determined these excesses won’t be repeated, not by their new hires or by current staff.

I was glad to see the Union receive its long-awaited raises, but someone has to explain to me how the head of Human Resources deserves a 34% raise especially when she’s getting another person added to her department.  Maybe because her department helped to take the survey?  Another interesting point is the result of a Public Information Request asking the amounts of the raises by position.  Attorney O’Laughlin said they had nothing on paper stating this information so there was nothing to turn over. Oh well, I’ve been intentionally misled by him before as have others making similar requests.  The vote was 3-2 with Van Groningen and Wild voting no.  But this was little more than political posturing since they had been unwilling to separate the union and the confidential employee  in votes.

It wasn’t easy for Larry Byrd to adjust his stance on abstaining from the union vote which he had  because of his son, and although the FPPC and a privately obtained San Francisco lawyer assured him it was perfectly legal for him to weigh in, he had resisted voting the last two times the issue came to the Board.  If he didn’t make the adjustment and vote,  the contract  would  have been held up indefinitely.

One continuing disappointment is the Board being unwilling to discuss how George Petrulakis racked up over $28,800 dollars in bills when he was facilitating only one meeting.  But I suppose that and other unexplained expenses will be swept out with the rubbish on December 31st.  We’ll give them a clean slate for the new year, but to paraphrase an old adage: Forgive those who have done the public wrong, but remember their names for future articles.

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