GA still seeking way out of deficit

GA still seeking way out of deficitBy BRIAN COSNER, News Review Staff Writer

The Indian Wells Valley Groundwater Authority spent a large portion of its October meeting discussing its projected shortfall of about $515,000 by the end of 2020.

The authority plans to scale back the workload for its consulting water marketing firm Capital Core Group, but made no other motions other than directing staff to continue looking at spending and pumping fees.

The deficit does not include two separate $500,000 advances expected to be paid back to Kern County and the IWV Water District (in the form of a groundwater pumping credit) and a $210,466 reimbursement to the city for legal services and facility fees.

Acting General Manager Don Zdeba reported that the authority’s revenues are limited to grant funds, the $30-per-acre-foot groundwater pumping fee established last year and initial contributions from the voting member agencies — Ridgecrest, IWV Water District and Kern, San Bernardino and Inyo Counties.

The authority’s biggest expenditures have been its contracts with Stetson Engineers to develop a Groundwater Sustainability Plan for the IWV, Jim Markman with RWG Law for legal services and more recently Capital Core Group, which has been tasked with exploring funding opportunities and availability of alternative water sources.

Zdeba noted that Stetson is performing many tasks outside of its original proposal.

“That includes requests to attend meetings, participating in attorney meetings – those were outside the original scope,” he said. “So we’ve accumulated expenses that weren’t budgeted.”

Stetson has been deferring its bills as the authority waits – sometimes for months – for Proposition 1 reimbursement payments. But after all the expected grant money comes through, the authority is likely to still come up short.

In regard to Capital Core’s work, Zdeba said efforts to secure funding need to continue to some extent, but “the reality is – we just don’t have the money right now.”

Zdeba offered three different financial scenarios that would allow the authority to land in the black at the end of the next fiscal year:

(1) The authority could increase the pumping fee to $65 per acre-foot, thus providing a year-end balance of about $75,000.

(2) The authority could rely on the approval of a $395,000 Bureau of Reclamation WaterSMART grant and increase the fee to only $40 per acre-foot, providing a year-end balance of roughly $50,000.

(3) Still relying on the Water-

SMART grant, the authority could leave the pumping fee as is and request $25,000 each from the voting member agencies, resulting in a year-end balance of about $5,500.

Member of the public Joshua Nugent, frequently representing Mojave Pistachios, cautioned against increased use of pumping fees.

“Taxes and fees usually work best if you don’t economically destroy the tax base,” said Nugent. Large groundwater pumpers like the water district, Searles Valley Minerals, Mojave Pistachios, Meadowbrook Dairy and other agricultural outfits are paying the lion’s share of pumping fees.

According to Legal Counsel Jim Worth, the authority has the power to increase the pumping fee, but only to help pay for the GSP which is due to the state in three months. Any pump fee established after the GSP would need to be a result of a new ordinance.

“It seems like we’re not looking at increasing the pumping fee so two of those scenarios are out,” said Zdeba. He said staff would pursue the WaterSMART grant and continue to look for where expenses could be trimmed.

While others expressed hesitation about raising the fee, Inyo County representative John Vallejo questioned if there were any other options.

“It’s pretty clear that just reducing expenses isn’t going to get us over the hurdle here,” said Vallejo.

The authority was also awarded a $646,000 Severely Disadvantaged Communities grant which would reimburse the authority for GPS projects, but fronting the cash for these endeavors remains an issue.

“The issue for the groundwater authority to consider is with cash flow,” said Zdeba. “Our experience with [Department of Water and Power] reimbursements is a couple of months until we get that money back.”

San Bernardino County Representative Bob Page suggested that the authority can look into using available Community Development Block Grant funding to pay for projects upfront and repay the money with the grant reimbursements. The purpose of CDBG funds is to benefit disadvantaged communities.

Kern County Legal Counsel Phil Hall said that sounded like a possibility but that he would “definitely need to make sure” it was an appropriate use of funds.

“I would love to use some of those funds to help us out if possible,” said Kern County Representative Mick Gleason.

During closing comments, Authority Chair Ron Kicinski said they would still look into the increasing the pumping fee if it were appropriate and necissary.

“I think it’s a valid request,” said Kicinski. “I need to know more information about what can be done.”

Committees of the IWVGA meet the first Thursday of each month at City Hall. The authority will meet again on Nov. 21. For agendas and more information, see iwvga.org.

Story First Published: 2019-11-01