GA hears ‘dreary’ financial update

Authority projects $1 million+ deficit by the end of 2020

GA hears ‘dreary’ financial updateBy BRIAN COSNER

News Review Staff Writer

The Indian Wells Valley Groundwater Authority board recently learned that with groundwater pumping fees generating less money than anticipated, the board can expect a significant financial shortfall in the next fiscal year.

Acting General Manager Don Zdeba broke the news of the projected $560,000 deficit to the board during last week’s regular meeting of the GA. The projections did not include additional funds the GA is expected to reimburse its member agencies — $500,000 to the IWV Water District, $500,000 to Kern County and approximately $210,000 to the city of Ridgecrest.

Authority Chair and Water District Representative Ron Kiciniski responded to the “dreary” update by saying that he wasn’t sure what the solution was, but that the board needed to take immediate action.

“Something the board needs to take into consideration is making up for the shortfall just to pay for the [Groundwater Sustainability Plan],” said Kicinski. “This doesn’t include what’s coming up next and what’s planned for administration costs.”

The authority passed a groundwater pumping fee in 2016 to cover an expected $930,000 shortfall in developing the GSP, which is due at the end of January. But according to the report, the authority has collected only about $525,000 to date.

The pumping fees are set to expire at the end of the year and don’t take into account costs associated with discussed water importation and development of infrastructure (expected to exceed $100 million).

“This is unacceptable,” said Kern County 1st District Supervisor Mick Gleason, the county’s board representative. “We need to trim from what we’re doing now to something that’s going to [accommodate] our budget.”

Gleason asked why the pumping fee revenue came in so much lower than predicted.

“Obviously either we’re not pumping what we were pumping in 2016, or numbers are being misreported,” said Zdeba.

Water District CFE Tyrell Staheli added that it’s likely there are pumpers who haven’t registered or aren’t paying their fees. But he doubted that was a significant enough problem to explain the $400,000 discrepancy.

Other than the pumping fee, the GA’s only significant source of revenue has been Proposition 1 grant funding. The authority received its first reimbursement —$335,000 — earlier this year and is expecting reimbursements of $352,000 and $160,000 to cover expenditures through June 2019.

But even with the reimbursements, the authority is still looking to be in the red by more than $1 million by December, 2020.

One thing that might ease the deficit some is a $390,000 Bureau of Reclamation grant that the authority is pursuing with the help of water marketing consultant Capitol Core Group.

Mike McKinney of CCG, who participated in the meeting via teleconference, also announced that the Senate Appropriations Committee allocated $75 million for the Defense Community Infrastructure Program to fund off-base projects that benefit military communities like the IWV.

McKinney said that any interconnection project with agencies such as Los Angeles Department of Water and Power or Antelope Valley-East Kern Water Agency would qualify.

“It seems like a pretty obvious thing that we should support,” said Inyo County representative John Vallejo.

Later participants discussed hiring a GA-specific staff, including a general manager, administrative assistant and financial officer/benefits coordinator. But the grim financial projections cast a shadow over the possibility of expanding staff.

“Looking at the way finances are right now, I see it is going to be hard to operate like this,” said Kicinski. He said the board needs to figure out how to finish paying for the GSP before moving on to other tasks.

“I’m not willing to develop an organization at the present time that’s going to drive us further into debt,” said Gleason. “That’s my No. 1 concern. We’ve got to manage that debt.

“I would only make one assumption about what we’re doing and where we’re going — and that is this: we are all going to pay more for our water and we’re going to use less,” he added during closing coments.

The authority will hear a proposed 2020 budget Oct. 17 at City Hall. See also iwvga.org/iwvga-meetings.

Pictured: Kern County 1st District Supervisor Mick Gleason at last week's IWV Groundwater Authority meeting. — Photo by Laura Austin

Story First Published: 2019-09-27