Water district keeps millions in non-interest bearing account

For more than two years, no one realized that a checking account belonging to the Triunfo Sanitation District, which oversees water and sanitation services for residents and businesses in Oak Park, North Ranch, Bell Canyon, Lake Sherwood and parts of Thousand Oaks, was not earning interest. The account now contains about $2.5 million.

To make up for the loss of interest, the Ventura Regional Sanitation District, Triunfo's management services contractor, said it will reimburse Triunfo nearly $100,000, the amount estimated by VRSD to be the total lost.

The district uses the account to write checks for operating costs. Since the account was opened the balance has fluctuated, reaching as much as $3 million and dipping to half that amount.

Officials said they discovered the account, opened with $840,000 in February 2004 at City National Bank in Oxnard, had not been set up to earn interest. The account's status was discovered after an internal audit was conducted in late July.

Triunfo board members were told of the situation during the Aug. 28 meeting. No written reports or estimates were provided, but Ventura County Supervisor Linda Parks, a Triunfo board member, requested that the information be available Sept. 18 at the board's next meeting. She also requested copies of current and past audits as well as information on what the account could have earned in interest.

"I think that's a little unheard of, to tell you the truth," Parks said. "It should have been presented (to the board) immediately."

The money was not at risk but just sitting in an account, according to Mark Lawler, who serves Triunfo as district manager and the VRSD as general manager. He said related issues with the VRSD had to be resolved before Triunfo board members could be informed.

Part of the reason the oversight occurred, said Lawler, is that the issue was never flagged during financial audits by the two districts.

An independent financial expert is necessary to properly oversee Triunfo's finances and advise its board, Parks said.

"I'm concerned that your loyalties are with the VRSD- you work for them," Parks told Lawler during the meeting. "I would like to see someone in between the two agencies to oversee the contract," she said. "It's good government."

Triunfo contracts with the Ventura Regional Sanitation District for management services, so the two agencies share staff. Two other Triunfo board members, Thousand Oaks Mayor Dennis Gillette and James Acosta, a Saticoy resident, also sit on the VRSD board, creating what Parks believes is a conflict of interest.

"I think they did know about it," Parks said, frustrated that the checking account's status had not been shared with Triunfo board members.

Several residents at the meeting also expressed discomfort with the lack of documentation and independent financial oversight.

"This is not chump change. This is a big deal," said Janna Orkney of Oak Park, a candidate for the Triunfo board in the November election. "I don't think it's fair to the residents or the ratepayers."

An attorney who advises the two sanitation agencies said he could not discuss the issue at the Triunfo board meeting because he had already represented the Ventura district on the subject.

Gillette defended the relationship between the agencies.

"This government structure has worked and served this community very well for 30 years," Gillette said. "There's nothing illegal or immoral about what's happening here."

The fact that Oak Park's sanitation rates are some of the highest in the area is due to the unique quality of the Triunfo district and the isolation of the community, Gillette said.

He said he serves on the Triunfo board as well as the regional district's because 30 percent of Triunfo's ratepayers are residents of Thousand Oaks.

"Maybe we should pull them (Thousand Oaks ratepayers) out and bring them back to the city," Gillette said.

Parks insisted that revenue had been lost and might not have been with independent oversight.

Acosta insisted, however, that Triunfo will have a revenue surplus.

Gillette said he would like to explore how the $100,000 reimbursement would be used.

"Do we pool it into investments or defray the upcoming rate increase taking place?" Gillette said.

Parks disagreed with Gillette's suggestions.

"It's not like we have free money," she said. "This is already budgeted. We need to see how far off we are because we didn't get the interest we anticipated."

City National Bank customer service representatives said that interest-earning business checking accounts are now receiving an annual rate of 1 percent. But if a business invests $100,000 or more in a one-year certificate of deposit, the current rate is 4.39 percent.