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River Valley Times

CSD Board Considers Overdue Audits and Unpaid Insurance

Jan 23, 2025 04:31PM ● By Gail Bullen River Valley Times Reporter
RANCHO MURIETA, CA (MPG) - Hiring temporary accountants and dealing with lapsed property insurance coverage were topics when the Rancho Murieta Community Services District Board met on Jan. 15.
The board voted to hire outside accountants for $170,000 to speed up the completion of two overdue audits. They also reversed General Manager Mimi Morris’s earlier decision to drop property insurance coverage without advising the board.
In other business, the board addressed a controversial ordinance to increase barcode sticker fees and an unexpected proposal to replace the draft Integrated Water Master Plan. See two stories on these topics in this issue.
Morris didn’t attend the meeting because she is on a paid leave of absence. See separate stories explaining her absence in this issue.

Accounting Help
The agenda item about funding temporary employees originated from a suggestion by Director John Merchant at the Dec. 18 meeting. He asked Director of Finance and Administration Mark Matulich whether “renting another CPA” could expedite the finalization of overdue audits. While Matulich acknowledged that it could be helpful, Morris cautioned that previous attempts to hire consultants had not accelerated progress due to the steep learning curve. Despite this concern, the board directed Matulich to explore the option further.
At the January meeting, Matulich proposed hiring two temporary accountants from Robert Half International from Feb. 1 through the end of June for $170,000 with funding from property tax revenues. The temporary staff will assist in completing the accounting for fiscal years 2022-23 and 2023-24, with the goal of finalizing the audits by the end of the current fiscal year. 
Matulich said that he and other staff have spent two years addressing unresolved accounting issues stemming from the loss of institutional knowledge during the 2020-21 and 2021-22 fiscal years. In the process, they developed templates and workflows to streamline the accounting. Matulich said it would be like “painting by the numbers,” as the temporary accountants repost several thousand transactions to rebuild the two remaining years.
Although Directors Jenco and Tim Maybee had expressed concerns earlier in the meeting about diverting property tax revenues from reserves to pay for security, they joined the other three board members in unanimously approving the $170,000 expenditure of property taxes to expedite the completion of the overdue audits.
Matulich also reported that the 2021-2022 fiscal year audit was underway. He noted that the auditors informed him that it was the first time in three to four years that the fixed assets had been thoroughly reviewed and reconciled.

Property Insurance
The agenda included a $127,000 payment to Golden State Risk Management (GSRM), the district’s insurance pool, to reinstate the district’s property insurance, which 
Morris had canceled earlier in the year. Other insurance coverages for the district remained unaffected.
According to a memo from Morris, she learned from a Golden State Risk Management representative in early 2024 that the property insurance did not cover fires, floods or earthquakes, yet the premium was increasing. 
Morris wrote that she raised her concerns with the board in February about a 50% hike in the premium for the limited coverage. Following the meeting, she explored alternatives and concluded that self-insurance was the best option. When Matulich inquired about renewing the policy in June, Morris instructed him to cancel it. However, she did not inform the board of her decision.
The Golden State Risk Management Chief Administrative Officer recently contacted Booth and District Counsel Patrick Enright to address concerns about canceling the district’s property insurance. Booth said the Golden State Risk Management representative clarified that the coverage does include fire and flood, with a separate rider available for earthquake coverage.
Booth subsequently motioned to approve the $127,000 payment to Golden State Risk Management to reinstate the property insurance. The motion passed with a 4:1 vote, with Director Tim Maybee casting the sole dissenting vote.

Other Business
In other business, the board approved a $179,000 expenditure to upgrade the Supervisory Control and Data Acquisition (SCADA) systems at the water and wastewater plants. 
In a related decision, the board authorized the purchase of a sodium hypochlorite pump for the wastewater plant for $42,000 plus taxes. This pre-purchase is anticipated to save $22,682 on the ongoing reconstruction project. 
Additionally, the board approved Houston’s recommendation to allocate $12,000 for a bathymetric survey of Clementia Reservoir. The survey will produce detailed contour maps and a reservoir capacity analysis.
In other business, resident Harry Gao complained about receiving a $6,000 water bill after his tenant moved out. Matulich presented a budget timeline, and Houston explained groundwater as part of his “Water 101” educational series, which will be archived on the district’s website. 
Although the agenda included a discussion about scheduling a strategic planning session, the board took no action on the matter.
The board’s next meeting will be at 5 p.m. Feb. 19.