Where did all the money go?

Is the City of Fullerton misappropriating your tax dollars?  Are they collecting double taxes?

Have you ever wondered where the money from the Sanitation Fee and Sewer Fee on your water bill goes? 

After studying our water rates for the past several months, I couldn't help but notice these two fees.  What you are about to read should make fiscal conservatives angry.  The simple answer to my two opening questions is YES!

You pay your utility bill with both of those fees and expect the City to spend the money on sanitation and sewers.  As you are about to see, City Hall has used some creative interpretations of our City's municipal code and some "interesting" bookkeeping strategies to spread the tax dollars liberally around various city departments. 

According to the City's FY2011-2012 budget, $128,504 from your Sanitation Fee payments is being spent on Fire Department salaries and benefits (page A-35, see below).  Can they even do that?  The Fullerton Municipal Code is pretty clear on what the revenue may be spent on.

Fullerton Municipal Code 12.14.010 Purpose

The City provides facilities and maintenance in connection with its sanitation program. The facilities being provided are those sewer line and storm drains which are shown as deficient in the City's general plan. The maintenance activity accomplished by this program includes sewer cleaning, storm drain cleaning, street sweeping, repairs on these systems, underpass, drainage system and channel maintenance, concrete curb and gutter repairs, tree trimming, sidewalk cleaning, necessary equipment, and other related charges. The cost of these facilities and services should, to the extent possible, be charged to the user or to person or property benefited. Sanitation charges are hereby established to accomplish this purpose. (SOURCE)

What else is this tax revenue paying for?  $8,950 goes to cover bond debt (page A-8 of FY2011-2012 budget).  Which bonds?  Who knows!

The Community Development Department gets $57,156 from the Sanitation Fee to cover salaries and benefits as well (page A-27 and A-35 of FY2011-2012 budget).

Ok, so how is it that the Sanitation Fund is contributing to the Fire Department's budget, Debt Service, and Community Development?  It seems like it should all go to engineering and maintenance services. 

The municipal code leaves little room for interpretation and this looks like someone got a little too creative with their bookkeeping.  As indicated by the municipal code, "facilities" is limited to sewer and storm drain lines, not Fire Department salaries and benefits. 

And then there is the Sewer Fee. According to the City's FY2011-2012 budget, $6,951,561 is to be spent on sewer projects:

Fullerton Municipal Code 2.48.370 Sewer Surcharge Enterprise Fund.

A Sewer Surcharge Enterprise Fund shall be created; and revenues placed in this Fund shall be used solely for the maintenance, operation, and capital improvement and repair to the City's sewer system, for the creation and implementation of a fats, oils, and grease control program established by City ordinance and other sewer-related expenses.

So where does City Hall plan to spend the money collected from the Sewer Fee?

Sewer Fund allocation by Department: City Manager $17,956; Human Resources $46,381; Community Development $63,081; Engineering $130,657; Maintenance Services $2,193,486; Capital Improvements $4,500,000.

Together these two taxes will provide $120,237 to Community Development and $85,070 to hold our growing bond debt at bay.  Granted $30,000 is expected to be generated from greases/oil inspection fees, so the inspector’s salary and benefits will come from the fund. 

Why is are these other departments, like Human Resources, collecting salaries from a fund intended to cover repair and maintenance costs of sewer lines?

Concerned that our taxes dollars are being squandered, I emailed City Hall.  The responses lead me to believe that someone, not sure who, is being very creative with their bookkeeping and liberal with their definition of sewer lines and storm drain lines.

Probably the best answer I got came from Fire Chief Wolfgang Knabe.  In a telephone call response to my question, “what does the Fire Department use the sanitation funds for?”, he explained that the fire inspectors use it to inspect trash enclosures for compliance with the NPDES.  What’s the NPEDS??  The National Pollutant Discharge Elimination System (NPDES) is an environmental regulation that requires the City to verify that a business is not discharging pollutants into bodies of water such as a creek.  Now the question is, does this inspection service warrant a $128,504 price tag?  Is it smart use of the money from that fund?  I don’t think so.

I emailed Community Development Director, Al Zelinka, to get his side of this issue and promptly received an out-of-office response.  To my surprise, Mr. Zelinka contacted me over the weekend to tell me that he also is questioning how the funding is being spent in his department.

He said he is in the process of quantifying the effort it takes City staff to process various development applications.  Once he knows how much time is spent on which tasks, he can identify which funds should be used.  Zelinka also pointed out that the Community Development Department is the communication and processing hub for all of the development projects which do include elements of sewer and sanitation.

Since the municipal code seems clear about what the funds are to be used for, I don’t see how they can be spent on environmental concerns beyond the basic maintenance of the lines.  I realize the nexus between street sweeping and clean storm drains which prevents flooding.  I don’t see any nexus between pollution prevention (unless the pollution damages the drains) and the intended use of these two funds.  

Isn’t it nice to know you get taxed twice on your water bill to maintain our sewers and the money gets skimmed and filtered to cover unrelated overhead?  Its sort of like municipal money laundering!  Your tax dollars come into the sewer and sanitation funds and then those dollars get spread around.

It is very important to point out that every department head I contacted about the use of these funds promptly replied and was willing to talk.  Thanks again to Wolfgang Knabe, Julia James, and Al Zelinka for being accessible and willing to answer my questions.  I did not attempt to contact Human Resources but one city official suggested that HR also runs the Risk Management and that they may get involved on matters of broken sewers.