Gateway concerns over County financial management pacified

John Pierre Menvielle, one of several landowners at the Gateway of the Americas, address the board Tuesday, Feb. 14, 2017. Photo by Brett Miller.

EL CENTRO — A tentative agreement between the County Public Works and the landowners of the Gateway of the Americas was reached during the second of two Board of Supervisor meetings this week concerning the financial obligations posed by equipment repairs. Thursday’s agreement included transferring $250,000 to Gateway of the America County Service Area (CSA) for the repairs and holding at least one additional meeting between the landowners and the CSA to clarify CSA’s financial holdings and what amount of landowner fees were over collected.

The Gateway to the Americas, located just north of the Calexico East Port of Entry, is a special district which includes industrial and commercial businesses, such as UPS Supply Chain Solutions and Norman Krieger, Inc.

John Gay, Director of Public Works, announced the amount charged would cover the construction involved with the equipment repair, which seeks to address notices of violation from the Regional Water Board. The board unanimously approved the $250,00 transfer.

“We need to get back to a place where we can truly move forward, and move the Gateway forward in a very efficient fashion,” said County Executive Officer Ralph Cordova, Jr.

John Pierre Menvielle, one of several landowners at the Gateway, commented Thursday that the repairs needed to be made promptly and that the financial details would be settled:

“What we’ve agreed to do with Mr. Cordova and Mr. Gay is first of next week to sit down at a table in a room with a small group of people, and get these numbers worked out.”

Gay had originally requested $400,000 during Tuesday’s regular meeting for remediation of equipment used for water treatment at the Gateway to the Americas, after indicating that additional costs during the fiscal year had depleted Gateway Service Area’s budget. The equipment, nearing the end of its life cycle, would require prompt rehabilitation.

“If we lose one pump, if that pump goes, I can no longer service sewage at the Gateway,” said Gay. “The opportunity cost of not moving forward is very problematic.”

Yet during discussion, Menvielle, prompted the Board to investigate and make transparent how the Gateway of the Americas County Service area (CSA) was using landowner taxes and consumer fees in relation to the transfer, citing a similar request in 2014 by CSA for $199,000.

Pierre shared that the approval of the $199,000 had came as a surprise.

“We had no idea as landowners what was going on until we all got our tax bill and they tried to bill the entire [amount] against all of the Gateway landowners in one year.”

County officials were able to work with the landowners to address the issue, but Menvielle was concerned Tuesday’s motion to transfer the $400,000 would repeat that situation, especially when funds belonging to the landowners were still possessed by the CSA.

According to Menvielle, after reviewing CSA’s financial statements, the landowners discovered that CSA had at least $1.2 million in an account from over collecting taxes from the landowners.

“We’ve been billed more than then what the actual cost of operation has been for each year, and the money has been accumulated into this account.”

Pierre requested that the over collected funds, which he claimed to amount to roughly $700,000, be returned to the landowners. If CSA needed funding for equipment rehabilitation, they could acquire a low-interest loan and adjust the landowner tax rates accordingly.

Pierre referred to Proposition 218, which was passed in 2002 and allowed for the servicing of the Gateway as a special district, and included a provision to tax landowners for county service, but only to cover operational costs.

CSA had previously agreed to return $250,000, but with the discovery of this account, the landowners are now requesting an additional $700,000. Pierre expressed concern that GSA was now asking for the $400,000, which would be reflected in increased taxes for the landowners.

Gay acknowledged that increased transparency was needed and agreement should be reached, but stressed that his request for the $400,000 served to address an impending issue.

“In this particular instance, in the position I sit in, we have to move forward,” Gay emphasized. “Wherever the funding comes from, the only option I have is to utilize the accounts that are under my purview.”

Gay noted that the need to service the equipment was time-sensitive. Auditing had shown that the lift stations, which have not been replaced in over 15 years, were in critical shape and even if partial failure occurred, substantial fines and costs would ensue. Various costs during the fiscal year had risen unexpectedly and no monies remained in the budget to remediate the equipment.

Menvielle agreed that the equipment remediation was critical, but was concerned that the request for the $400,000 was made with little notice or discussion with the landowners, and the transfer would result in increased costs for the landowners, despite CSA already having at least roughly $1 million in overcollected fees.

“We want to control our money, we don’t want you controlling our money. That’s what it boils down to. When you need it, you bill us over time.”

Menvielle did express his appreciation for the formation of an advisory committee Tuesday morning, which would consist of seven members. The committee formation was prompted to better address the issues facing Gateway and provide greater transparency between the involved parties.

“The books weren’t open and we wanted to start up an advisory committee,” Menvielle commented. “We’ve been in the dark about the Gateway and CSA over the years.”

After private deliberations between the landowners and Gay, Thursday morning’s Board meeting saw Gay modify the request from $400,000 to $250,000 to ensure that the initial steps were taken to address the equipment issues. Gay also announced that he would be meeting with the landowners early next week to address the financial holdings and to ensure that both parties had the same financial data, from which the precise amount of reimbersed landowner fees would be determined.