The Shameful Water Triple (Er, Quadruple) Dip

UPDATE: Of course the comment from “Do the math” is right on the money. The 10% in-lieu fee is defined as a percentage of gross revenue – including the in-lieu fee itself! This tricky little dodge adds 10% of the 10% – an add-on of yet another 1% to the cost of your water bill! Uh, oh! Quadruple dip!

The Desert Rat

Way back in 1970 the Fullerton City Council passed Resolution No. 5184 dictating that 10% of the gross revenue collected by the Water Department was a reasonable amount to cover ancillary costs from supporting City departments. Here’s the key language from the Resolution:

That an amount equal to ten percent of the gross annual water sales of the Municipal Utilities Department during the fiscal year ending June 30, 1970 is hereby transferred to the General Fund in payment for the services of the Finance Department of the City and of the City Administrator, the City Attorney and the City Clerk to the Municipal Utilities Department of the City as a part of the operating costs of the waterworks system of the City during the fiscal year ending June 30, 1970.

That at the end of the fiscal year ending on June 30, 1971 and at the end of every fiscal year thereafter, a sum equal to ten percent of the gross annual water sales of the Municipal Utilities Department of the City shall be transferred to the general Fund of the City in payment for the services, during such fiscal year, of the Finance Department of the City and of the City Administrator, the City Attorney and the City Clerk to the Municipal Utilities Department of the City.

What sort of justification proved that 10% of the water revenue in 1970 should have gone to the General Fund is anybody’s guess.

In 1982 the City Council passed an ordinance permitting itself the authority to collect an “in-lieu” fee from  the water utility as a fixed percentage of revenue. Despite the name change, the City continued to add the historic 10% to Fullerton’s water bills, and rake it off directly into the General Fund – without so much as a second thought.

A bit confusing? Not really. The original justification for the fuzzy 10% figure was to reimburse the City for vague incurred costs; calling it an in-lieu fee never changed the inescapable fact that the 10% amount was supposed to pay for actual costs associated with running the waterworks. Either way, as of 1997 and the implementation of Prop. 218, that became illegal.

Flash forward to today, and peruse this year’s budget documents. The Water Fund is Fund 44. Check out the total column on the right.

Summary of Appropriations by Fund.

Notice the amount directly allocated in the 2011-12 budget to the City Manager and Administration: $1.7 million ($29,917 + $1,678,962).

Now let’s see some actual charges. Observe Fiscal year 2009-10, over there, in the left column.

Summary of Expenditures and Appropriations by Fund

Good grief! As you might have guessed (based on this year’s budget), in 2009-10 the City directly charged the Water Fund over $1.5 million for the City Council, City Manager, and Administrative Services; plus fifty grand for Human Resources, and $100,000 for Community Development!

And this means that those services that were originally being used to justify the 10% levy on our water bills are already being charged directly to the General Fund. Double Dip!

Of course it gets worse. We now know the 10%  is a double dip; but hold on to your water bill. Because the directly charged costs for “administration” are considered part of the base waterworks cost; the automatic 10% in-lieu fee (which was supposed to pay for “administration” but that pays for nothing), is applied to that! That increase this year is at least $170,000, if you add 10% to that $1.7 million figure we saw in the first table. Triple Dip!

And that, Friends, is a triple gainer off the high board and right into the deep end of the pool.

 

 

78 Replies to “The Shameful Water Triple (Er, Quadruple) Dip”

    1. Really Christian? You don’t believe this “triple dip” is something “new”? I think you need to slow your roll there buddy. It sounds like you really don’t understand what The Desert Rat just explained to us. I don’t, but at least I’m not acting like it’s “nothing new”…

      1. Easy there, fella. Christian is right – it is nothing new. I believe the double and triple dip have been going on since at least 1982.

        The fourth dip mentioned by “Do the math”is actually the first, and has been in place since at least 1970.

        And of course the whole thing has been illegal since 1997.

  1. It gets even worse. The 10% is applied to GROSS revenue. That means that the actual jack-up is 11% of the true cost of the water delivery!

    QUADRUPLE DIP!

  2. Tuco knows:

    Double dip, triple dip, its all the same! Wake up Fullerton, it is a $25,000,000 slush fund to fund “essential” city services! And despite this slushy fund, Fullerton is in financial straits! Yup, good job city manager and department heads. The old rubber stamping dinosaurs on city council approved it all anyway!

    1. SSSSSSilva voted for the tax for eight years.

      Is there anyone(within the city goverment) who objected to the tax, other than citizens?

      karma

  3. This makes me angry. The city is playing noblesse oblige with this and justifying RIPPING OFF its ratepayers! Please keep harping on this. PLEASE.

    1. An audit is exactly what is needed. The more I hear, the more I think Fullerton is not that far away from Bell’s situation …..only difference is the city council hasn’t been hauled in to the pokey…..yet.

    2. An audit is exactly what is needed. The more I hear, the more I think Fullerton is not that far away from Bell’s situation …..only difference is the city council hasn’t been hauled in to the pokey…..yet.

      AUDIT AUDIT AUDIT!!!

      1. Hey dumbshit, the city’s books are audited each and every single year. It’s called a certified annual financial report (CAFR). You can download last year’s report from the city’s website.

        1. Is that the annual audit that gives a rockin’ thumbs up to a hundred million dollars in unfunded pension liabilities? Yee haw!

        2. That’s not an audit, thats a financial report, 2 different animals-completely,

          A financial report are documents prepared at the end of an accounting period, containing summary of accounting data for that period, with background notes, forms, and other information.

          An audit is an examination of records or financial accounts to check their accuracy.

  4. I see problems with the summary of expenses statement that indicate the need for a thorough forensic audit.
    Without any verifiable footnotes, the summary leaves several items open for questioning. And this is only pertaining to what is being openly presented.

  5. Congradulations to the participating police departments for the quick action the helped lead to the public awarenss & capture of the suspect in the homeless killings. Special recognition to the Placentia police department for immediatly getting out into the community after the first victim was found. Four undercover officers took flyers and mixed with the homeless community trying to find leads. An taskforce was started which conducted roadblocks and included many departments.I would like to think that the fullerton police department would be capable as acting as fast as the placentia police department did if this happened here.

    1. Congratulations belong to the citizens not the po-pos for spotting the killer, videoing him and sending the tip to the “nearby” po’s.

      Yes, the citizens in Fullerton would be just as diligent

  6. With this very hard to obtain information and the study the citizen did about the engingeers numbers being off. He might possibly have some good info for us. Can we please contact him?

    1. … I believe that this is the gentleman that your referring too at 1:25 in the video. This citizen had really pored over the numbers and had found that alot wasn’t adding up and he was calling them out on it. I was kind of bummed that he got discouraged when no one on the city council was listening to him and he immediately left the water meeting with his very nice wife in tow.
      Maybe we can find out who this citizen is that cares enough to do his own complete water study him and listen to what he has to say and even get the FFFF to publish his findings if they’re correct?
      http://youtu.be/dEGdJ1OZcks
      You’ll also see t
      http://youtu.be/dEGdJ1OZcks

  7. Thanks for reminding us that Norby, Nelson, and Quirk voted for this, too. Nelson and Norby are gone, but Quirk isn’t. As an educator she should have been smart enough to figure out this scam. So maybe she likes it.

  8. I see “actual, budgeted, estimated,proposed” expenditure, what exactly are they buying with our money disguised as the 10% water tax?

    1. Donuts.

      Whatever they want and they are smirking about it, Wonder has there been any significant tax increases in the city, since 1997?

  9. there must exist somewhwere line item accounts for these “actual, budgeted, estimated,proposed” expenditures

    1. There are. But they are not listed in the budget documents. You’ll have to put in a request to get the detailed budget objects and/or actual expenditures.

  10. Let’s see how Larry Bennett and his Recall-No morons are going to spin this one…let me guess:

    FULLERTON, CA – True to form, Tony Bushala and his bullies have managed to steal money from the Fullerton Tax Payers. 11% of every dollar you pay to your water bill secretly goes to Tony Bushala’s private off shore account. It helps finance his multi-million dollar yacht, private jet, race car. He even bought a private high speed invisible train that shuttles him around the north west. ” Don’t trust Tony Bushala, he has his hand in your pocket!”

  11. Even if the percent was correct and legal, I find it hard to believe it costs $27 million for the City to administer the waterworks!

  12. My evil twin, Larry Bennett thinks it’s jim dandy for the City to extort this money from us to pay for his bosses’ pensions. Lots of people used to be fooled by my twin. They thought he was just a little slow. Not any more.

    He’s not dumb. He’s evil.

    1. After 20 years of marriage; Larry Bennett gave his wife zippo through his divorce settlement. Actually he let her keep the cloths on her back. He went out of his way to make sure she ended up with zero. Don’t believe me, just ask someone who knows her or Larry.

      What a guy that Bennett really is!

  13. SO, they’re doing this shiz on purpose!
    Let’s show them some real ‘lynch-mob’ mentality, without the physical lynching of course.
    Didn’t they have a council meeting last Tuesday to discuss all of this? If so, what if anything was accomplished?

  14. Larry Bennett’s Good Twin :
    My evil twin, Larry Bennett thinks it’s jim dandy for the City to extort this money from us to pay for his bosses’ pensions. Lots of people used to be fooled by my twin. They thought he was just a little slow. Not any more.
    He’s not dumb. He’s evil.

    …and I wonder what would motivate Larry to extort all of this money from us to pay for his bosses pensions? You think maybe Larry might be helping them to invest this same money for his own sales commissions?
    Sort of a legal way to launder the money that they’ve all pilfered over the years from taxpayers?

    http://www.bennettfis.com/Larry-Bennett.e400612.htm

  15. The sad thing is that if you asked one of the Three Dim Bulbs to explain any of this they would give you a blank stare then refer you to “staff.”

    Well, guess what, donkeys? It’s time for a reckoning. The BS has finally been piled up too high.

    1. At the water rate meeting the other night at the main Library, Greg Seborn, deferred a citizen’s question that was directed towards an Orange County Water Board member, to Fullerton City Councilmember, Don Bankhead, since he IS on their board of directors.
      When the entire audience looked to the great Don Bankhead for the answer, Don went into his playing possum act, and sat their looking blankly ahead until the subject was changed and the meeting went on without the citizens inquiry being addressed.

      1. that’s what Don does best. By the way, how is the recall coming along? Did we get enough signatures yet? Once again I will never understand voting in TERM LIMITS and Bankhead in the same breath.

  16. “the automatic 10% in-lieu fee (which was supposed to pay for “administration” but that pays for nothing), is applied to that!”

    Essentially we’re paying a fee on our fee.

  17. Our future recallees must WANT the recall to succeed. If they didn’t, why wasn’t this put on the agenda months ago and taken care of? Their lack of logic is astounding because the longer they do nothing, the bigger the problem becomes.

    It’s like waiting until all four tires on your car become threadbare and then denying they need to be replaced.

      1. According to that meeting with the Adhoc people, it was shelved by council and after that not looked at again, evidently it just slipped in a crack of some sort.

        Is this the usual way for them to conduct bidness in Fullerton if they feel the issue is too hard to deal with or isn’t important?

        I say purposely, as there are at least 5 of them and it was not on anyone’s agenda.

      2. The issue hasn’t been addressed because the Three Blind Boobs and their $212,000 boy-wonder haven’t got the guts to stop robbing us. And of course Wonder Joe would have to figure out how to close a $2.5 million budget gap.

  18. fullerton lover :
    At the water rate meeting the other night at the main Library, Greg Seborn, deferred a citizen’s question that was directed towards an Orange County Water Board member, to Fullerton City Councilmember, Don Bankhead, since he IS on their board of directors.
    When the entire audience looked to the great Don Bankhead for the answer, Don went into his playing possum act, and sat their looking blankly ahead until the subject was changed and the meeting went on without the citizens inquiry being addressed.

    That is effective politicianing. Dodge the question and hope the subject gets diverted. You could here and see that in the recent GOP candidate debates…Dodge Ball Experts.

  19. Can one of the clever legal folks who post here tell us how we dissolve the city charter and start over? Other cities have done it and been better off as a result. Why not Fullerton?

  20. Lest anyone think this is a brand new issue, it actually surfaced during the 1994 Recall. You would have thought Bankhead was smart enough to fix the problem after he got back in. Oops. Bankhead? Smart?

    Sorry.

    1. That’s true. The subject of the in lieu fee was brought up periodically every few years thereafter by reformers. After 1997 it became illegal, but apparently in Fullerton, your leaders don’t feel compelled to obey the law until a judge makes them. Nice folks, eh?

  21. No CPA here, but without these alledged illegal “fees” discussed in this post going to the city’s General Fund, the next City Council is going to have one heck of a time replacing that revenue. And don’t get me started about the growing unfunded pension liability staring the city in the face in the near future.

    That does not even factor in one penny from any civil lawsuits against the city everyone knows are coming.

  22. Anonymous :
    The issue hasn’t been addressed because the Three Blind Boobs and their $212,000 boy-wonder haven’t got the guts to stop robbing us. And of course Wonder Joe would have to figure out how to close a $2.5 million budget gap.

    The nonsensical part is how the Three Blind Mice could tackle the franchise fee problem WITHOUT costing themselves a dime.

    Even a bona fide (but unsuccessful) attempt on their part would save thousands of dollars in anti-recall campaigning expenses because doing nothing is one more issue they must defend against.

    Every pro-recall accusation is sustained by their refusal to merely discuss the merits of the issues with members of the community.

  23. it’s bad enough that the residents of Fullerton have less than satisfactory police service, now they find they get ripped off by the city administration. Its sad since you cannot easily sell your home, a large % of the newer housing stock is “under water”! So you are stuck living in Fullerton while the city council squanders money, the downtown is an ever expanding bunch of bars and you have to wonder, how does all this help make Fullerton a better community to live in?
    Time to get Fullerton back on track to being the cool community it once was!

  24. Revenues will very probably be way down. “people from the area like to do buisness in Fullerton, its known as a friendly town” thats a shame because the country in general, has gone down, and now people will avoid this once popular, very happy, warm, friendly town. Fullerton was one of the top ten safest cities in America (with a population over 100,000) until the city was overrun by the many bars, drugs, and thugs of all kinds.

  25. Fullerton houses sold in Q3 2011 was worst than the bottom in 2007. about 400 in Q2 2011 to about 200 Q3 2011.

    1. Thats ok as the council will find ways to raise fees and taxes like they always do until its their turn to sit in the audience. The recall is phase I and then we replace 4 out of 5 of them in the following election. Chapter 11 is an inevitable option unless Fullerton can issue its own currency. I dont see any other way out of this thing. The CAFR’s are entities in a parallel universe. We have a small window and they tried to slam it on us but their fat heads got stuck in it.

  26. Fullerton police chief’s medical leave extended again

    FULLERTON – Police Chief Michael Sellers has again extended his medical leave, this time for an additional 30 days, a Fullerton Police Department spokesman said Tuesday evening.

    Sellers was first placed on a 30-day medical leave by his physician in early August, in the wake of the controversial death of Kelly Thomas.

    Since then, the chief’s physician in September extended the leave for 30 more days and in October for an additional 60 days.

    http://www.ocregister.com/articles/chief-330409-leave-sellers.html

  27. The quality of the water is very important.

    — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. -Declaration of Independence

    http://www.barefootsworld.net/doi1776.html

  28. We need a new form of city council….
    not a rotation.
    We also need the four empty car dealers back!!
    Dumb to let Toyota leave. Then Honda.Then Dodge.Then Chevy.Then Kia. All that sales tax to other cities. All the revenue that goes with it..But hay we do have 40 tattoo shops and check cashing joints that attract the best people. This is not the Fullerton I grew up in!
    Oh and I get a fine notice becouse the city could see a shovle over my side gate and at the same time at the end of my street the (unincorperated side) there are beached boats,grass as high as my knees, rusted out caltrans signes. and a chain link fence to cover it. I will post pics if ness……

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