Audit Finds City Sewer Funds Intact

A comprehensive audit of a divisive $75-million proposal to expand this city’s waste-water treatment plant has found that the plan is larger and more expensive than necessary, and that there is no money missing from city sewer accounts.

According to the findings released Thursday by Price Waterhouse LLP, there is absolutely no evidence to support claims that Thousand Oaks’ waste-water fund is almost empty because it was drained to pay for construction of the Civic Arts Plaza. Councilwoman Elois Zeanah had said repeatedly that she had questions about how much money the $64-million Civic Arts Plaza, which opened in 1994, had sucked up from the fund.

“We hope our report puts to rest these wild accusations that money is missing,” said Jim Hunt, the accounting firm partner who oversaw the audit, which is expected to cost between $100,000 and $125,000. “No money is missing. The money that was loaned for the Civic Arts Plaza has been paid back, with interest.”

However, the audit--done with help from an engineering consultant with extensive knowledge of waste-water plants--found that the city’s 15-year expansion plan was excessively costly and ambitious for a city the size of Thousand Oaks, which has a population of 110,000.

That, in a nutshell, is why Zeanah and former Councilwoman Jaime Zukowski had refused to support the sewer fee increase needed to fund the expansion of the Hill Canyon plant, which requires a four-fifths vote. Mayor Andy Fox and council members Judy Lazar and Mike Markey have consistently voiced support for the $75-million plan, arguing that it was the city’s only true option.

Price Waterhouse recommends that the council consider a two-step fee increase. The first increase would be to upgrade the sewage plant enough so that the city does not lose its state waste-water permits; the second increase would take care of Thousand Oaks’ long-term sewage needs.

The accounting firm also suggests that the city conduct additional engineering studies to find ways to reduce the total cost of the project.

The City Council will discuss the audit’s findings Tuesday in a special hearing.

“What they found is that there is a clear need for a a waste-water improvement plan,” Hunt said of the report by Dames and Moore, the engineering consultant his firm hired. “But they are also of the opinion that the $75-million waste-water plan contains some options that are unsettling. It contains several expensive options where cheaper options may be available.”

Zeanah said the audit validated many of her views about the expansion plan. She said she intends to propose a less expensive expansion alternative Tuesday.

“My enemies have been calling me so many names because I refused to rubber-stamp this, and now it turns out that I was right,” Zeanah said. “I’ve been vindicated. This $75-million plan is too expensive.”

Lazar said she and her council allies have always been willing to discuss less costly ways of meeting state requirements for waste-water plants and fulfilling the city’s needs.

She noted that Thousand Oaks is now lobbying federal officials to be exempt from a certain clean-water mandate that represents $15 million of the project’s cost. But in the meantime, she said, the city must move ahead with the most conservative plan, and she believes that is the $75-million proposal.

“I don’t doubt that there are alternatives,” Lazar said. “And I don’t think it’s the city staff’s position that there are no alternatives. I think what we had always talked about is that we needed to begin this plan, and we can always review it in two years and see if there are ways to downsize it and save money.”

The audit also criticizes Thousand Oaks’ City Council and city staff for refusing to put their quibbling aside and discuss a compromise in their yearlong stalemate over expanding the treatment plant, calling the dispute an example of politics affecting sound policymaking decisions.

“The City Council and the city staff are not working particularly well together,” Hunt said. “We feel that they could look at ways to scale this plan back.

“Our belief is that the capital improvement program should not be a political football,” he added. “We believe the city needs to look at this again. We’re not certain that there are major ways to save money here, but we believe that there are.”

For example, Hunt said, the audit found that Thousand Oaks residents, on average, are using less water than they were several years ago. Based on that trend, the city probably does not need to undertake as large an expansion of its waste-water plant as it had originally planned, he said.

“There is a demonstrated pattern of less water consumption by the community, and this seems to be holding even after the drought,” Hunt said. “Three years have passed by, and it looks like it is going to stick. So you have to ask the question: Do you need an expansion of this size?”

One thing that is clear, in Hunt’s opinion, is that Thousand Oaks must do something soon to prove to state water regulators that the city has a plan underway to take care of its waste-water needs. Otherwise, he said, Thousand Oaks will lose its state license to operate its waste-water plant, which could put a screeching halt to any plans for growth.

The 35-year-old facility is at 83% of its 10-million-gallon daily capacity; state law requires that the City Council take action to ensure that its capacity will not be exceeded.

Already, the state Water Resources Control Board has warned Thousand Oaks that if the city does not come up with a way to pay for the treatment plant’s expansion by the end of the year, it may have to repay $12.5 million in state and federal water quality grants it accepted in the 1970s. In accepting the grants, Thousand Oaks agreed to provide a certain level of waste-water service--a level that the city will not be able to meet unless it makes some improvements to its existing facility soon.

According to state law, the expansion plan must be funded with money from existing users as well as future residents. That has become one of the major sticking points for Zeanah, who believes longtime residents would be unduly burdened with the project’s proposed spending plan.

Earlier this year, council members agreed to raise waste-water connection fees on new homes--the source of money from future residents for the expansion--from $3,900 to $5,310 per residential unit. But the council remained divided on a $7.35 monthly fee increase--the funds from existing residents--proposed by city officials and approved a more modest $1.80 per month increase instead.

Public works officials say that the lower fee increase will cover only operating costs, however, and will not cover any upgrades and expansions of the waste-water system, so another larger increase is still necessary. Before the $1.80 increase, the average Thousand Oaks homeowner paid $10.50 per month--one of the lowest rates in Ventura County.