RANCHO MURIETA, CA (MPG) - Three years after a Sacramento County Grand Jury concluded the Rancho Murieta Community Services District had “lost the public trust,” a new Grand Jury report says the district has made measurable progress but remains “a work in progress.”

The June 24 report credits the district with upgrading its accounting system and completing two long-overdue financial audits, but concludes it continues to struggle with overdue audits, governance, ethics, management turnover and other issues. The report contains 12 findings and makes 11 recommendations to the district. The report can be found at sacgrandjury.org.

The investigation stemmed from complaints alleging the district failed to provide timely financial reports to the Board of Directors, remained behind in completing required annual audits and improperly settled employment-related claims. The Grand Jury said it investigated the financial and governance complaints but declined to examine allegations involving employment settlements.

When asked for comment, Board President John Merchant responded in a June 30 email. The District will approve a release at the board meeting, he said.

“We have already begun to work on the formal response, which we will make in accordance with the GJ request for comment within 90 days.”

Financial Improvements

Unlike the 2023 report, this year’s Grand Jury investigation acknowledges the district has made measurable progress.

The Grand Jury credited the district with upgrading its accounting system, improving accounting procedures and completing the fiscal year 2020-21 and 2021-22 audits. Nevertheless, investigators concluded the district remains several years behind in completing the annual financial audits required by state law.

According to the report, audits for fiscal years 2022-23 and 2023-24 remained incomplete as of May, while work on the 2024-25 and 2025-26 audits had been delayed.

Finance and Administration Director Cecilia Min reported at the June 17 board meeting that the 2022-23 and 2023-24 financial statements had been submitted to the outside auditors in mid-May and were expected to be completed within about three months. She said staff expect to complete the remaining audits by the end of 2026.

The Grand Jury also reported it had not received confirmation that the material weaknesses and significant deficiencies identified in the 2019-20 audit had been fully corrected. Min told directors on June 17 that some of those findings will reappear in the 2022-23 and 2023-24 audits because they reflect historical conditions. But many of the underlying deficiencies have already been corrected through changes to accounting procedures and financial controls. Other findings, she said, cannot be corrected retroactively or will require additional work beyond those audit years.

Over the past year, Min has provided regular updates describing efforts to rebuild the district’s accounting system, resolve longstanding reconciliation problems and prepare multiple years of financial records for outside auditors.

Ethics, Conflict of Interest

One of the report’s strongest criticisms concerns ethics and conflicts of interest.

The report recommends that the district update its conflict-of-interest code, strengthen oversight of Form 700 Statements of Economic Interests and improve its ethics compliance procedures.

The Grand Jury concluded that Director Randy Jenco’s participation in discussions regarding a possible water service moratorium created the appearance of a conflict of interest because he owns undeveloped property within Rancho Murieta that could be affected by future water policy.

The report, however, does not mention that the same issue was the subject of a 2025 complaint filed with the California Fair Political Practices Commission by former Director Steve Booth.

That complaint alleged Jenco should recuse himself from discussions involving future development because of his ownership of the Granlees property. Jenco told the FPPC that the property on which he is building a home already had district water service and a septic system. Jenco added that even if he wanted to develop the property, which he doesn’t, he couldn’t because it is in a flood plain.

The FPPC declined to pursue an enforcement action regarding Booth’s complaint, citing insufficient evidence, a development not referenced in the Grand Jury report.

The Grand Jury also found no apparent procedure to ensure board members complete the required ethics training.

The 2005 District policy requires directors to complete at least two hours of ethics training every two years, with the district maintaining records of completion. They meet this requirement by completing a two-hour online class offered by the California Special Districts Association.  

District Counsel Patrick Enright conducted a public training session on ethics at the Oct. 15, 2025, Board meeting and on Brown Act updates and new state fiscal training requirements during the May 27 board meeting.

Personnel, GM Delay

The report identifies management instability as another continuing concern.

Grand Jury investigators found the district has had five general managers in six and a half years, four directors of operations in four years, and four finance directors in six years. They also criticized the board for waiting nearly 10 months after former General Manager Mimi Morris resigned before hiring an executive search firm in March.

The Grand Jury concluded that the district’s interim management structure contributed to a serious  governance error. According to the report, a letter requiring a developer to invest $8 million in a water storage tank was sent before receiving full board approval. The board later rescinded the letter. The report said that negotiations between the district and the developer have not been finalized.

Despite those criticisms, the Grand Jury commended the district for “promptly filling the general manager position with an interim general manager and ad hoc committee for additional support,” saying the arrangement allowed district operations to move forward.

After General Manager Mimi Morris resigned in May 2025, the board’s Administrative Ad Hoc Committee assumed oversight of many administrative functions. Board President John Merchant initially served as the committee’s sole member. Following Bill Gere’s appointment to the board at the July 16, 2025, special meeting, he joined Merchant on the committee.

The board appointed Amelia Wilder as interim general manager on Sept. 17, 2025, five months after Morris’s departure. During that meeting, Merchant said the board was in no rush to hire a permanent replacement.

“We are not going to go forever without a general manager, but we have four people in the top line I feel pretty good about,” Merchant said. “I’d like to give it an opportunity to settle down and decide what we really want to do and what we really want to look for in the next hire that we make.”

The Grand Jury also commended the district for hiring an outside human resources firm, saying it has contributed to a more smoothly run organization.

Reclaimed Water Revisited

The Grand Jury also revisited its 2023 criticism of the district’s reclaimed water agreement with the Rancho Murieta Country Club.

In response to the 2023 report, the district rejected the Grand Jury’s recommendation that it begin charging for reclaimed water used to irrigate the golf courses. The board argued the 1988 agreement requires the district to provide treated reclaimed water to the country club as part of its wastewater disposal system, does not authorize charging for the water itself, and helps the district comply with state regulations governing disposal of treated wastewater.

This year’s report reaches a different conclusion. It states the agreement requires the district to deliver reclaimed water but also allows the district, upon written request, to recover the cost of delivering reclaimed water to Bass Lake. According to the report, the district has never requested reimbursement.

The River Valley Times reviewed the district’s 2023 response but was unable to determine from the available contract documents whether the reimbursement provision cited by the Grand Jury appears in the original 1988 agreement, a later amendment or an exhibit incorporated into the agreement.

Lawsuit Count Questioned

The Grand Jury report also states that five former employees “brought suit” against the district since the 2023 Grand Jury report.

However, a review of Sacramento County Superior Court records identified two employment-related lawsuits filed after the 2023 Grand Jury report and four employment-related lawsuits filed since 2020. The report does not explain how it arrived at its total of five lawsuits.

Looking Ahead

The report recommends completing all overdue audits by December, updating the district’s conflict-of-interest code, strengthening ethics and governance training, improving oversight of Form 700 filings, reviewing the Rancho Murieta Country Club loan agreement and addressing personnel management issues.

Under California law, the Rancho Murieta Community Services District Board of Directors is required to formally respond to the Grand Jury’s findings and recommendations within 90 days.