Public Works Director Strikes Out Again

It is unfortunate that we were unable to attend the October 15 City Council meeting, as I would have preferred to address this topic before Council approved the use of sewer funds to repair roadways in one of the local nitrate areas. While recent Council actions lead me to believe nothing I could possibly have said would have changed their minds, it still would have been preferable to publicly remind them of appropriate and inappropriate uses of funding sources, considering how budget-challenged their new Public Works Director, Ruben Martinez, has proven himself to be.

In an earlier post, I discussed how in my opinion, Martinez should not be relied upon for either financial analysis or budget decisions. Now, I have another example of his statements that backs up my opinion of his finance-related skills. (Or lack thereof!)

Martinez’s Agenda Report  for the October 15 Council meeting clearly states that he recommends Council approval of a budgetary supplemental appropriation of $260,000 from the City’s Sewer Fund (Fund 850) to pay for roadway rehabilitation. His assumption appears to be that since the road work is needed in a recently sewered area, he can use leftover project funds for the necessary work.

Now we have mentioned before that Fund 850 is one of the City’s Enterprise Funds. A good way to look at Enterprise Funds is like a utility company; you pay for the service you receive. In the case of Fund 850, you pay to have the City handle your wastewater, rather than maintaining your own septic tank system. The difference between Fund 850 and another utility company is that the City’s Enterprise Fund cannot generate profit. It can only charge its customers the cost of doing business. Fund 850 is a self supporting entity; it provides a service to the public for a fee.

So what expenses should Fund 850 cover? Appropriate expenses can be broken down into three major categories: Operating Expenses such as maintenance, materials and supplies, and staffing; Capital Project Expenses not associated with new development (in which case, the developer covers the cost of building the new sewer system); and a Reserve account, which is created to ensure there will be funding available to replace infrastructure and/or equipment when necessary.

Did I make any mention of roadway rehabilitation above? Nope. Ahhh, but I hear some of you readers asking, “But what about Capital Project Expenses, Quené?” Great question – and very smart of you to catch that! If you will trust me to just make a statement without backup documentation, I would answer by stating that with Capital Projects related to sewer, the contractor is only required to replace the pavement above the sewer trench; not the entire width of the roadway. In the construction world, this is referred to as pavement replacement, and it is clearly a cost of the sewer installation; therefore, it would be an appropriate charge to Fund 850. However, replacing and/or rehabilitating the entire width of the street is not an expense of the sewer portion of a Capital Project and as such should not be paid for by Fund 850.

If you would like to see backup documentation of what pavement replacement looks like and you have an eye for construction plan details, let me refer you to Title 18R of the City of Chico’s Municipal Code. Chapter 18R.12 includes design standards, referred to as Improvement Standards or Standard Plans, and No. S-17 shows the typical details of a pavement replacement project. In comparison, the next page No. S-18A, shows what an entire street width would look like.

The final paragraph of Martinez’s Agenda Report is an outright lie. It states in part “It has been past practice to use sewer funds for roadway repairs related to sewer projects such as current projects like River Road and the West Trunk Line as it has been to previous sewerage projects…” Just when I think he cannot make a more inaccurate statement, he writes something so outrageous that I go slack-jawed.

Neither of his example projects used Fund 850 for roadway rehabilitation. How do I know this to be a fact? Well, it’s very simple, almost too simple… The River Road project is still being designed (you cannot very well spend money on work that has not even gone out to bid), and while the West Trunk Line project is currently being constructed, it was funded with Fund 320 (Development Impact Fee) dollars. This is ridiculous! A Development Impact Fee is significantly different than an Enterprise Fund.

Funding for the West Trunk Line project can be verified from two different sources on the City of Chico website – the Bid Tabulation sheet for the project and the 2013-14 Proposed Budget (not sure why they have not posted a Final Budget yet…it’s only four +/- months late).

Oh, and here is another little tidbit about the River Road project, if and when it should go out for construction. River Road belongs to the County. The City has an easement for work on the sewer trunk lines that exist in the right-of-way, but the road itself? Butte County. Period.

As anyone who lives in the pockets of County that still exist within Chico city limits knows, the City does not pay for fixing the County’s problems. In the case of the River Road project, I am sure some agreement will be made, and the County will likely trade a construction easement for roadway rehabilitation, but should Fund 850 pay for this? Absolutely not.

Just in case I still have not convinced you that Fund 850 should not be paying for roadway rehabilitation, please take a look at the Fund Summary report for the Sewer Fund (Fund 850) which can be found in the City’s Budget and is also most conveniently attached to Martinez’s Agenda Report, Attachment D, linked above. The Fund Summary specifies (on the last page) that the uses of the fund are restricted, and goes on to state that the authorized capital uses are limited to major programs, buildings and facilities, and major equipment, and finally that the only other authorized uses of the fund are for operating and debt service. Conspicuously missing is any reference to paying for roadway rehabilitation.

There is no doubt in my mind that the roadway rehabilitation work is needed in many areas of Chico; however, just because a certain Fund has available dollars does not give the City’s Executive Team the right to use them in whatever manner they desire. This is a clear misuse of Fund 850, and any misuse of funding leads to mistrust in our government officials.

Those of us living in homes on the City’s wastewater system pay our fees for maintaining and operating sewer infrastructure, not for completely unrelated infrastructure that does not benefit wastewater customers.

Martinez has struck out again!

If I have not explained any of these points thoroughly, or if you would like more details about the more technical side of Capital Project budgeting, please feel free to contact me by either commenting below or send us an email at

Thank you for your continued readership!


Posted on November 5, 2013, in Budget, Truth vs Lies and tagged , , , , . Bookmark the permalink. 1 Comment.

  1. Quené should write an article on why we spend social security money on anything other than social security. I guess the difference here is that the City of Chico’s code has outlined specifically what these sewer funds can be used for…

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