A State Auditor’s report questions reserve fund accumulations and spending practices at independent water districts. Released in late June, the report looks at the funds held by local, independent water districts statewide. The auditor also selected eight districts for closer scrutiny: Alameda County Water District, Crestline-Lake Arrowhead Water Agency, Leucadia Wastewater District, Otay Water District, San Gabriel Valley Municipal Water District, Walnut Valley Water District, Western Municipal Water District, and Wheeler Ridge-Maricopa Water Storage District.

The auditor reported that five of districts — Crestline, Leucadia, Walnut Valley, Western and Wheeler Ridge — “may have trouble defending to their ratepayers and taxpayers the need for some portion of their accumulative resources.” The auditor made clear that the accumulations are not necessarily excessive, but did question the reserve accounts because the agencies’ could not fully explain why they needed the money.

The auditor reported that three districts — Otay, Walnut Valley and Western — paid attendance fees for directors to attend parties and Chamber of Commerce functions, and also spent lavishly on meals and travel. Walnut Valley, for example, paid $18,000 for 15 meals provided to directors and others who were away from the district.

The auditor also found that one Leucadia director made decisions in which she had a financial interest. Director Lois Humphreys voted for district contracts with an engineering company that had hired her for public relations work, according to the audit.

The districts’ responses to the audit were mixed, with Walnut Valley providing the most combative answer. “Walnut Valley Water District challenges the title of the report and the district disputes the claim that its ‘reserve accounts are not always sufficiently justified’ or that ‘some expenses and contract decisions are questionable.’ The district submits there is absolutely no evidence to support these broad general allegations,” General Manager Karen Power wrote.

State officials have long eyed special district reserve accounts as a potential source of revenue during hard times for the state. However, the state auditor reported that the state could not legally “transfer” money in the water districts’ reserve accounts to the state general fund.

The audit is available at www.bsa.ca.gov

TWO NEW STUDIES by San Jose State University economics professors cast doubt on the effectiveness of inclusionary zoning — in which developers must sell 10% to 20% of new homes at “affordable” prices — as a means of encouraging affordable housing production.

One study examined 50 Bay Area cities with inclusionary zoning, while the second report considered the 13 cities in Los Angeles and Orange counties that employ the tool. The report found that inclusionary policies produced 6,836 affordable units in the Bay Area cities and 6,379 affordable units — 70% of them in Irvine — in Los Angeles and Orange counties. Those numbers are tiny fractions of the number of affordable housing units needed. At the same time, overall housing construction decreased “drastically” right after a city adopted an inclusionary ordinance, the professors found.

One study reported that Bay Area inclusionary ordinances raised the price of a new, market-rate home by $22,000 to $44,000. For the Southern California jurisdictions, the increase was pegged at $33,000 to $66,000 per unit. In more expensive jurisdictions, the policy added more than $100,000 to the price of a new home, according to the study.

The studies by Professors Benjamin Powell and Edward Stringham were funded by the libertarian Reason Foundation. They are available at www.rppi.org

WHILE THE REASON REPORTS were knocking inclusionary zoning, a coalition of seven Bay Area foundations announced a $250,000 grant to the Non-Profit Housing Association of Northern California to fund “the first phase of the campaign to help Bay Area cities and counties accelerate adoption of inclusionary housing polices, a proven affordable housing strategy.”

The effort has targeted Contra Costa and Sonoma counties and the cities of Antioch, Pittsburg and San Jose, all of which lack inclusionary zoning. The housing advocates also want San Francisco, Santa Rosa and San Mateo to strengthen inclusionary laws.

Providing money are S.H. Cowell Foundation, Fannie Mae Foundation, Evelyn and Walter Haas Jr. Fund, Marin Community Foundation, Peninsula Community Foundation, The San Francisco Foundation, and Charles and Helen Schwab Foundation.

THE SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS has adopted a growth vision called “Southern California Compass.” The plan outlines how the six-county region should accommodate an expected 6.3 million people by 2030. The plan emphasizes redevelopment and infill, development along transportation corridors, a connected series of open space reserves and much greater public transit. The plan calls for the majority of new housing units to be multi-family apartments, townhouses and condominiums. The organization has closely tied the plan with its regional transportation plan (see CP&DR Public Development, June 2004).

The growth vision is available at www.socalcompass.org

VOTERS IN ANTIOCH have rejected a proposed business park and apartment complex. During an election in June, 54% of voters on Measure C sided with Citizens for a Better Antioch, which forced a referendum after the City Council approved the project. The proposed Bluerock Business Center and Luxury Apartments would have provided space for about 1,000 jobs and 240 housing units.

Although project advocates said the project would help address the bedroom community’s jobs-housing imbalance, the election appears indicative of an anti-growth backlash that has hit the Contra County city of 103,000.

FORMER SANTA ROSA PLANNING COMMISSIONER Richard Carlile has been fined $24,000 by the Fair Political Practices Commission for repeated violations of conflict-of-interest laws. Five of the FPPC charges involved a failure to disclose income from clients on conflict-of-interest forms. The FPPC also found that Carlile twice voted on projects in which his clients held a financial interest, and that he improperly lobbied planning staff members for clients.

Carlile, a cofounder of Carlile Macy, one of Sonoma County’s largest civil engineering companies, was on the Planning Commission from 1997 through 2002, when he was pressured to resign because of his lobbying activity regarding development regulations. He characterized the violations as technicalities.

“I have nothing to be ashamed of,” Carlile told the Santa Rosa Press Democrat. “It’s unfortunate they happened, but they weren’t conscious violations.”

A TENTATIVE DEAL that would prevent development on nearly all of the 82,000-acre Hearst Ranch in San Luis Obispo County was reached in early June.

Under the deal, the Hearst Corporation would receive $80 million from the state, plus state tax credits worth $15 million. Hearst would also get the right to develop a 100-room hotel at San Simeon Village and 27 houses on 5-acre parcels.

The state would gain title to 18 miles of coastline, and a conservation and agricultural easement on 81,000 acres. Details of the deal have not been finalized or released publicly.