2023 California Special Districts Magazine July - August

California Special Districts Alliance

The California Special Districts Alliance is a collaborative partnership between the California Special Districts Association (CSDA), the CSDA Finance Corporation (CSDAFC), and the Special District Risk Management Authority (SDRMA). These three highly respected statewide organizations join forces to help special districts in California better serve their communities.

CSDA Board and Staff

Officers

ELAINE MAGNER, PRESIDENT, Pleasant Valley Recreation and Park District

PETE KAMPA, VICE PRESIDENT, CSDM, Groveland Community Services District

DON BARTZ, CSDM, SECRETARY, Phelan Pinon Hills Community Service District

LORENZO RIOS, TREASURER, Clovis Veterans Memorial District

RYAN CLAUSNITZER, CSDM, PAST PRESIDENT, Alameda County Mosquito Abatement District

Members of the Board

KIMBERLEE SENEY, Gold Mountain Community Services District

FRED RYNESS, Burney Water District

GREG ORSINI, McKinleyville Community Service District

NOELLE MATTOCK, El Dorado Hills Community Services District

JERRY L. GILMORE, Truckee Sanitary District

CHAD DAVISSON, CSDM, Ironhouse Sanitary District

PATRICK OSTLY, North of River Sanitary District #1

STEVE PEREZ, CSDM, Rosamond Community Services District

DR. HUGH RAFFERTY, Mosquito & Vector Management District of Santa Barbara County

VINCENT FERRANTE, Moss Landing Harbor District

ARLENE SCHAFER, Costa Mesa Sanitary District

JO MACKENZIE, Vista Irrigation District

Staff

NEIL MCCORMICK, Chief Executive Officer

MEGAN HEMMING, Professional Development Director

KYLE PACKHAM, Advocacy & Public Affairs Director

CASSANDRA STRAWN, Member Services & Communications Director

RICK WOOD, Finance & Administration Director

AARON AVERY, Senior Legislative Representative

EMILY CHA, Database & Online Communities Specialist

MARCUS DETWILER, Associate Legislative Representative

BRENT FARRAR, Graphic Design/Video Specialist

AUBREY GOHL, Member Services Representative

VANESSA GONZALES, Communications Specialist

COLLEEN HALEY, Public Affairs Field Coordinator

HEIDI HANNAMAN, Legislative Representative

LILIA M. HERNANDEZ, Legislative Assistant

MUSTAFA HESSABI, Deputy General Counsel

CHARLOTTE HOLIFIELD, Public Affairs Field Coordinator

MICHAEL MEYER, Member Services Specialist

CHRIS NORDEN, Public Affairs Field Coordinator

CHRIS PALMER, Senior Public Affairs Field Coordinator

AMBER PHELEN, Executive Assistant

RACHAEL POPPINO, Professional Development Assistant

JENNIFER SMITH, Professional Development Coordinator

ERIC SPENCER, Member Services Specialist

SUSAN STAUTS, Member Services Representative

OPHELIA SZIGETI, Legislative Analyst

DANE WADLÉ, Senior Public Affairs Field Coordinator

JAMES WILFONG, Design & Websites Manager

KRISTIN WITHROW, Communications Specialist

SDRMA Board and Staff

Officers

SANDY SEIFERT-RAFFELSON, PRESIDENT, Herlong Public Utility District

ROBERT SWAN, VICE PRESIDENT, Groveland Community Services District

JESSE CLAYPOOL, SECRETARY, Honey Lake Valley Resource Conservation District

Members of the Board

DAVID ARANDA, CSDM, Stallion Springs Community Services District

MIKE SCHEAFER, Costa Mesa Sanitary District

TIM UNRUH, CSDM, Kern County Mosquito & Vector Control District

THOMAS WRIGHT, Clovis Veterans Memorial District

Consultants

LAUREN BRANT, Public Financial Management

DEREK BURKHALTER, Bickmore Actuarial

CHARICE HUNTLEY, River City Bank

FRANK ONO, iFish Group, Inc.

ANN SIPRELLE, Best Best & Krieger, LLP

KARL SNEARER, Apex Insurance Agency

DOUG WOZNIAK, Alliant Insurance Services, Inc.

Staff

BRIAN KELLEY, MBA, ARM, Chief Executive Officer

ELLEN DOUGHTY, ARM, Chief Member Services Officer

DEBBIE YOKOTA, AIC, Chief Risk Officer

MATT CLUTTERBUCK, Chief Financial Officer

WENDY TUCKER, Claims Manager

ALANA LITTLE, Health Benefits Manager

ENRIQUETA (HENRI) CASTRO, Risk Control Manager

ROBERTO LOZANO, Claims Manager

ALLISON BATEMAN, PHR, HR/Office Manager

PETR KOVALCHUK, Finance Manager

MARGARITO CRUZ, Senior Accountant

DANNY PENA, Senior Claims Examiner

ERIC LUCERO, Senior Risk Control Specialist

TERESA GUILLEN, Member Services Specialist II

MICHELLE BROWN, Health Benefits Specialist II

CANDICE RICHARDSON, Management Analyst

KEITH IKAMI, Claims Examiner I

LISA SANDOVAL, Member Services Specialist I

Special District Risk Management Authority 1112 I Street, Suite 300 Sacramento, CA 95814 tel: 800.537.7790

www.sdrma.org

CSDAFC Board and Staff

Officers

JO MACKENZIE, PRESIDENT, Vista Irrigation District

VINCE FERRANTE, VICE PRESIDENT, Moss Landing Harbor District

ARLENE SCHAFER, SECRETARY, Costa Mesa Sanitary District

GLENN LAZOF, TREASURER, Regional Government Services Authority

Members of the Board

PAUL HUGHES, CSDM, South Tahoe Public Utilities District

MATTHEW MCCUE, Coachella Valley Cemetery District

GREG ORSINI, McKinleyville Community Service District

Consultants

RICK BRANDIS, Brandis Tallman, a Division of Oppenheimer & Co. Inc.

JEFF LAND Brandis Tallman, a Division of Oppenheimer & Co. Inc.

DAVID MCMURCHIE, CSDAFC Legal Counsel

WILLIAM MORTON, Municipal Finance Corporation

STEFAN MORTON, Municipal Finance Corporation

ALBERT REYES, Kutak Rock LLP

NICOLE TALLMAN, Brandis Tallman, a Division of Oppenheimer & Co. Inc.

Staff

NEIL MCCORMICK, Chief Executive Officer

CATHRINE LEMAIRE, Coordinator

AMBER PHELEN, Executive Assistant

RICK WOOD, Finance & Administration Director

CSDA Finance Corporation

1112 I Street, Suite 200, Sacramento, CA 95814 tel: 877.924.2732

www.csdafinance.net

California Special Districts Association

1112 I Street, Suite 200

Sacramento, CA 95814

toll-free: 877.924.2732

www.csda.net

Managing Risk

What's More Important: Fraud Prevention or Detection?

NSDC Drafts Proposed Federal Definition for Special Districts

I am pleased to report that CSDA’s partnership with the National Special Districts Coalition (NSDC) continues to grow stronger and we have made significant progress toward its top federal policy priority by proposing a national definition for “special district.” With approximately 35,000 special districts serving as vital providers of local government services to millions of Americans across the country, the lack of a standardized definition has resulted in inconsistencies and difficulties for districts in accessing federal programs as well as gaining assistance for infrastructure projects and community programs.

The NSDC’s proposed definition, unanimously approved by the Executive Committee, provides a clear and concise description of a special district and reads as follows:

“Special District” – A political subdivision of a State, with specified boundaries, created pursuant to general law or act of the State, for the purpose of performing limited and specific governmental or proprietary functions, except that is not a school district, college, county, city, town, township, village, parish, borough, or other general purpose unit of government.

The NSDC’s proposal is the result of extensive outreach, research, and coalition building. The working group responsible for crafting the definition conducted thorough analyses and engaged with stakeholders from various states. Their efforts were supported by CSDA and the NSDC Advocacy Team and involved discussions with the U.S. Census Bureau to ensure alignment with federal government statistics as best as possible.

The importance of a national definition for special districts cannot be overstated. It serves as a benchmark for the term and allows for consistent identification and classification across the country. With a defined status, special districts can effectively advocate for their inclusion in federal programs and secure resources to provide essential services in their communities.

Additionally, a national definition enhances overall awareness of districts and enables policymakers to better understand the role and significance of special districts in the local government landscape and overall service delivery, leading to informed decision-making regarding program reauthorization and new initiatives.

The proposed definition is the first step as we now work to have it formally adopted. This will require significant outreach, and we encourage all CSDA members to Take Action and communicate your support as we move forward when we request assistance. We are confident that through these efforts, special districts will be better defined, understood, and equipped to fulfill their vital role in delivering essential services to communities nationwide.

Neil McCormick

CSDA Chief Executive Officer

SPECIAL DISTRICT LEADERSHIP FOUNDATION

NSDC

Special District Leaders Advance Policy Goals on the Hill, Look to Next Steps

By Cole Arreola-Karr, NSDC Federal Advocacy Director

The nation’s special district stakeholders successfully walked the halls of Congress for the second time, setting the foundation advocacy priorities in the 118th Congress as part of the 2023 National Special Districts Coalition (NSDC) “Special Districts on the Hill.” Leaders and stakeholders from coast to coast – that is, California to Florida – met with 36 offices of the U.S. House and Senate to promote awareness of special districts as a central element of the country’s local government landscape. In doing so, the group of 12 advocated for the establishment of a “special district” definition in federal law and broader inclusion in federallyfunded local government programs. NSDC also focused on ongoing efforts to address community gaps in adequate water infrastructure for firefighting. The two topics continue to be top Coalition priorities.

California’s special districts were well represented in discussions with key members of Coalition state congressional delegations. Neil McCormick, CSDA Chief Executive Officer; Ryan Clausnitzer, CSDA Past President and Alameda County Mosquito Abatement District Manager; and Kyle Packham, CSDA Advocacy and Public Affairs Director met with Western U.S. representatives. As NSDC’s working group tasked with crafting a recommended federal definition for “special district” had posed a final draft for feedback at the time of the DC visits, the early proposal was floated as a “temperature check,” so-to-speak, for support. These conversations allowed the NSDC Advocacy Team to identify and build legislative champions for the Coalition’s next steps, as CSDA CEO and NSDC Chairman Neil McCormick outlined in this California

Special Districts magazine CEO welcome message. We are eager for the next steps of this advocacy – and we will need all-hands-on-deck to make sure we cross the finish line and secure a definition in federal law. Doing so will require special districts to submit letters of support (or thanks) to their representatives in the U.S. House and Senate.

NSDC leaders were not the only ones promoting special district priorities in Washington, D.C., during this week in April. NSDC and CSDA advocates were able to synergize with the Tahoe Water for Fire Suppression Coalition, comprised of special districts providing water services in the Lake Tahoe Basin, as well as federal representatives for the Association of California Water Agencies on water infrastructure for firefighting issues. Together, NSDC and the Tahoe coalition were able to

complement messages and further policy proposals to assist communities with enhancement of fire suppression infrastructure.

NSDC and the Tahoe coalition focused this conversation on broadening the $1 billion Community Wildlife Defense Grant program, first authorized under the Infrastructure Investment and Jobs Act. The Coalition is pressing to expand the U.S. Department of Agriculture program to include water infrastructure for firefighting needs as eligible planning and prevention projects. The five-year program’s objective is to reduce a community’s risk of wildfire destruction through increasing defensible space, enhance weatherization and fire resistance of structures, and address other community wildfire mitigation needs. So far, the program has only cycled through one of its five authorized fiscal years.

Left image: Colorado, Oregon, Utah, and California special districts association representatives

Right image: (left to right) Michael Valdez, Colorado Special Districts Association; Kyle Packham, California Special Districts Association; Congressman Kevin Kiley; Neil McCormick, California Special Districts Association; Ryan Clausnitzer, California Special Districts Association; Frank Stratton, Special Districts Association of Oregon; Ann Terry, Special District Association of Colorado; and Allison Ulmer, Special District Association of Colorado

The proposed policy change is aimed to provide an additional tool for wildland-urban infrastructure communities’ use to mitigate catastrophic wildfire’s deadly and devastating impacts, which many of California’s special districts unfortunately know all too well. NSDC will keep its members updated on developments and share advocacy needs as they arise.

The Coalition thanks all 36 congressional office staffs for their active engagement with Coalition Members during fly-in, and we especially thank the members of Congress that took time out of a chaotic week to meet with CSDA representatives and others in the Coalition: Representatives John Duarte, R-Calif.; Val Hoyle, D-Ore.; Carlos Gimenez, R-Fla.; Kevin Kiley, R-Calif.; Doug LaMalfa, R-Calif.;

The April fly-in was the second for NSDC, having made its initial introductions on Capitol Hill in September 2022. The fly-in event will be a primary element of NSDC’s legislative advocacy program as it continues to develop. The Ferguson Group and Paragon Government Relations coordinated the event along with Karr Advocacy Strategies.

Please stay tuned to CSDA’s eNews and Advocacy News blog for news as it breaks on this important issue.

Doug Lamborn, R-Colo.; and Brittany Pettersen, D-Colo.

ProDev

Let the Games Begin!

2023 Board Secretary/Clerk Conference

Join us November 6 – 8 in beautiful Seaside/Monterey for our Board Secretary/Clerk Conference. This game-themed conference will feature two tracks – one for first-time attendees to earn their Board Secretary/Clerk Certificate and the second track with two breakout options at each time slot for advanced or returning attendees to tailor their experience for their current professional development needs as well as the needs of their district.

Two pre-conference workshops will be available on Monday, November 6 for an additional fee, and you don’t need to attend the full conference to participate. Planned pre-conference workshop topics include DEI and records retention.

This year’s keynote speaker is Merlyna Valentine presenting “Change Chose Me... Now What?” Merlyna has learned some valuable lessons since August 2007, when her life as she knew it was forever changed and she experienced the closest call to death imaginable. Instead of focusing on what happened and what’s missing from her new life as a quad amputee, she chooses to embrace this new path with a grateful heart and a positive attitude.

For more information and to register online visit csda.net/boardsecretary/home

Game On!

Conference features two tracks – one for first-time attendees to earn their Board Secretary/Clerk Certificate and the second track with two breakout options at each time slot for advanced or returning attendees to tailor their experience for their current professional development needs as well as the needs of their district.

Merlyna Valentine

Meetings & Events

CSDA Conferences

CSDA Annual Conference & Exhibitor Showcase

Monterey, August 28 – 31

Special District Leadership Academy

Santa Rosa, October 22 – 25

Early bird registration discount through September 22

Board Secretary / Clerk Conference

Monterey, November 6 – 8

Early bird registration discount through October 5

Upcoming Workshops

SDLA Governance Foundations

Monterey, August 28

So, You Want to Be a General Manager?

Monterey, August 28

Supervisory Skills for the Public Sector*

September 13-14

Quarterly Leadership Book Club: 10 Must Reads for Women in Leadership*

September 22

Organizational Development*

October 4-5

The Brown Act in an Endemic World*

October 11-12

HR Boot Camp for Special Districts*

October 18-19

*Virtual workshop

Upcoming Webinars

Meeting Management Through Parliamentary Procedure

September 12

Best Practices for Board/Staff Roles & Communication

October 10

Ethics AB 1234 Compliance Training

October 17

Sexual Harassment Prevention for Supervisors

October 24

Articles

Educational articles and topic ideas from members are accepted all year long. Go to the CSDA Events Page https://qrco.de/bddc8t

Laws

CSDA News

New Tuolumne County Chapter Approved

At its January 20 meeting, the CSDA Board of Directors formally approved an affiliation agreement with the Tuolumne County Special Districts Association. The Tuolumne County Chapter becomes CSDA’s 26th affiliated chapter and joins the Gold Country Chapter and the Stanislaus County Chapter as the third chapter in CSDA’s Sierra Network.

The approval of this affiliation agreement completes a process started in 2022. Special district representatives from multiple districts held their first meeting in April to discuss forming a county-specific chapter. The county had been part of the Gold Country Chapter since 2012, but leaders felt an independent chapter was preferable to help the districts focus on upcoming LAFCO issues. In 2020, districts secured representation on the Tuolumne County LAFCO. The Tuolumne County Chapter formalized its goal of becoming a CSDA-affiliated Chapter in December 2022.

The Tuolumne County Chapter elected the following individuals as officers:

President: Pete Kampa, CSDM, Groveland Community Services District

Vice-President: Eileen Mannix, Twain Harte Community Services District

Secretary: Brian Bell, Tuolumne Fire District

Treasurer: Richard York, Jamestown Sanitary District

In response to CSDA’s Board action approving the agreement, CSDA Board Member and Tuolumne County Chapter President Pete Kampa stated, “I thank my colleagues on the CSDA Board for unanimously approving the Tuolumne County Chapter affiliation. I also want to thank the local districts for their commitment to building this new Chapter. I believe it will be an effective forum to advocate for and assist the independent districts in Tuolumne County.”

To learn more about CSDA’s affiliated chapters, including upcoming chapter meetings, visit csda.net/about-csda/ chapters-networks or contact the CSDA Public Affairs Field Coordinator serving your network.

In Review

Special Districts Legislative Days and #SpecialDistrictsWeek

The 2023 Special Districts Legislative Days was held on May 16-17 in Sacramento, coinciding with Special Districts Week May 14-20. Check out some of the social media activity from Facebook and Twitter during this exciting week! Search for more on these platforms, as well as LinkedIn and Instagram, with hashtags: #DistrictsAdvocate and #SpecialDistrictsWeek.

California Special Districts Association

May 16 · Sacramento

Thank you Senator John Laird for addressing Special Districts Legislative Days attendees. We are honored to name you Legislator of the Year!

#DistrictsAdvocate

SGV Mosquito @SGVMosquito • May 15

What is a special district? #SpecialDistrictsWeek

Special districts are local governments created by the people of a community to deliver specialized services. @SGVMosquito is a public health agency that provides protection from vector-borne diseases.

#LocalGov #LocalGovernment

California Special Districts Association

May 16 · Sacramento

Wrapped up an informative day 1 of Special Districts Legislative Days during this #SpecialDistrictsWeek. Special thanks to Pedro Nava from the Little Hoover Commission!

#DistrictsAdvocate

Get a Hold of Us

We are always on the lookout for articles and topic ideas. For editorial inquiries, contact CSDA Communications Specialist Vanessa Gonzales, at 877.924.2732 or membership@csda.net

For advertising inquiries, contact CSDA at 877.924.2732 or advertising@csda.net

California Special Districts Association 1112 I Street, Suite 200 Sacramento, CA 95814 toll-free: 877.924.2732

www.csda.net

Where do I find my certificates?

How do I log in?

www.csda.net/support

How do I register for....?

How do I subscribe or unsubscribe for news channels?

California Special Districts Association

May 16 · Sheraton Grand Sacramento Hotel, Sacramento

Welcome attendees to this year’s Special Districts Legislative Days! We had a great opening with speaker Maria Gallegos-Herrera, the California State Director for USDA Rural Development.

#DistrictsAdvocate #SpecialDistrictsWeek

West Valley Water @MyWVWD • May 15

#DidYouKnow, there are over 3,000 special districts in California working to provide essential services at a local level? We’re proud to be among them, serving over 98,000 customers with safe, high quality and reliable water every time they turn on the tap.

@CSDAdistricts

You Ask We Answer

Questions Appear in CSDA Online Communities

RFP vs RFQ – When and How to Use Them

Q: Jose M. Quintana, General Manager, Esparto Community Services District

Hello everyone, I have a question about request for proposals and request for qualifications. I am new to the Public Procurement side of my position and have read very much about RFPs and RFQs. One of my questions is, when are the best times to use one over the other? I am currently looking at submitting requests for a Water System Master Plan. I have seen RFPs and RFQs for this type of project. My understanding is when it comes to RFQs you use an evaluation team to score the firms and select the best qualified candidate, that seems easy enough if I’ve understood it so far. My second question is how do you review and select your firm when using an RFP? Is it also an evaluation scoring system or is it a different process? I want to make sure I follow the right procedures when selecting a firm for this project and future projects. Thank you in advance.

A: Cynthia Allen, PhD, CSDM, Administrative Services Manager, Vandenberg Village Community Services District

This is the criteria I use:

• Request for Proposal (RFP) - Professional Services

• Request for Quotation (RFQ) - Specific Goods (stock items) and Fixed Services (annual maintenance)

• Request for Bid (RFB) - Construction (awarded to lowest bidder)

A: Brent Ives, President, BHI Management Consulting

For a service providers point of view, I see:

RFQ - a ‘request for qualifications’ for professional service where qualified professional help is needed and the cost is secondary.

RFP - ‘request for proposals’- is a call for formal proposals addressing an agency outlined specific scope of work with a particular approach. Here the quote involves known qualified companies and cost is a competitive factor.

Hope this helps… I’d be glad to talk.

https://www.csda.net/communities-home

CSDA Disclaimer: This section is not intended to be legal advice. Members should always seek legal counsel. The information contained here is for general reference purposes only.

Maintain budget neutrality while implementing needed upgrades

While energy and infrastructure upgrades reduce overhead costs, limited budgets and conflicting priorities can restrict spending that doesn’t immediately impact frontline services. Centrica Business Solutions deploys flexible contracting options that enable special districts to maintain budget neutrality while implementing needed upgrades.

Requires

Uses

Pays

Contact: Dan Mitchell

Email: dan.mitchell@centrica.com

Phone: 949-842-6150

Download

Ask the Experts Avoiding Conflicts of Interest and Maintaining Public Trust

By Alex Mog, Of Counsel, Meyers Nave

Maintaining public trust is critical for elected and appointed officials serving in the public sector. The loss of public confidence can greatly impede a district’s ability to fulfill and further its core mission and lead to dysfunction. While every community is unique, there are certain steps that will help all officials effectively serve.

Understand and Follow Conflict of Interest Laws. The quickest way for a public official to lose the trust of the public is to participate in a decision for which they have a conflict of interest. California has a few major rules governing potential conflicts of interest including the Political Reform Act, Government Code section 1090, and the Common Law Conflicts of Interest Doctrine.

Applying these rules can be complicated, and if you are unsure about whether a rule applies, it’s important to seek assistance as soon as possible. If the first time a potential conflict is raised is during a public meeting, not only will there be insufficient time to analyze the issue, but you’ll also be unprepared to explain the situation to the public. Accordingly, public officials should reach out to their district managers and general counsel as soon as possible when they become

continued on page 18...

aware of a potential issue. If there is adequate time, you can also seek written advice from the Fair Political Practices Commission.

Comply with Pay to Play Rules. Effective January 1, 2023, SB 1439 came into effect. The law prohibits elected officials from accepting, soliciting, or directing a contribution of $250 or more from a “party” or “participant” in a proceeding involving a license, permit, or other entitlement, when the proceeding is pending and for 12 months following the date a final decision is made. The restriction also applies to most contracts. Similar rules previously applied to appointed officials. On June 15, 2023, the Fair Political Practices Commission adopted new detailed regulations implementing this law. Complying with this law is critical, as much of the public often perceives campaign contributions as potentially quid-proquo arrangements.

Always Observe the Brown Act. The Brown Act is California’s open meeting law for local agencies. It prohibits a majority of the legislative body from hearing about, discussing, deliberating, or taking action on an item within its jurisdiction except in a noticed meeting, with limited exceptions. Noticed meetings must have posted agendas. Although adhering to these restrictions may appear tedious, The Brown Act is designed to ensure transparency in conducting the public’s business. Violations of The Brown Act interfere with the public’s

right to participate in the decision-making process, thus directly impacting the public’s confidence in their local agencies. Pre-meeting discussions between an official and agency staff to understand issues are permissible, but decisions made with little discussion or minimal questions during public meetings can create perceptions of decisions being made behind closed doors.

Be Mindful of Perception. Even when a public official’s conduct doesn’t violate any laws or regulations, the public may think differently. As a public official, it’s important to ask yourself, how will I feel if there is a story about this on the cover of the newspaper (or the front page of the local blog)? This doesn’t mean public officials should recuse themselves from decisions unnecessarily- officials are elected/appointed to make decisions, and they should participate when allowed. However, directly acknowledging and explaining a perceived issue to the public before or during a meeting can help maintain public trust and confidence as much as possible.

By adhering to these best practices, California public officials can build and sustain public trust, enabling them to effectively serve their communities while advancing their district’s core mission.

Learn more on this topic from Alex Mog at the CSDA Annual Conference & Exhibitor Showcase session, “Avoiding Conflicts of Interest and Maintaining Public Trust.”

https://www.csda.net/member-resources/career-center

After 31 years serving the community at South Tahoe Public Utility District (District), General Manager John Thiel is pulling anchor and heading to southern California as the new General Manager of the West Valley Water District.

In June, the South Tahoe Public Utility District’s Board of Directors unanimously approved a resolution honoring John for his 31 years of service. Thiel began his career at the District in 1992 and worked his way up from Staff Engineer, Senior Engineer, Principal Engineer, Engineering Department Manager, and finally to General Manager in 2018. The resolution highlighted Thiel’s role in strengthening relationships within the community and expanding the District’s data drive approach to prioritizing the repair and replacement of aging assets.

Congratulations to Matt Clutterbuck who currently serves Special District Risk Management Authority as their new Chief Financial Officer, overseeing all aspects of finance and accounting. He previously served a large consumer manufacturing company based in Northern California as the accounting manager where he oversaw the accounting department, financial reporting, and the year-end audit. Additionally, he served as a senior external auditor within the Audit and Assurance practice at Deloitte & Touche where he specialized in real estate, manufacturing, life science and technology sectors serving private, pre-IPO, and public clients in Sacramento, the Bay Area, and San Francisco.

Cambria Community Services District’s new General Manager, Matthew McElhenie, was announced at the end of April. With a background in emergency services and leadership in academia, McElhenie said, “I am committed to upholding transparency, accountability and inclusivity in all aspects of city governance.”

Cosumnes Community Services District is excited to announce that Phil Lewis will serve as their next CEO/General Manager. Phil joined the Cosumnes Community Services District in October 2020 as the Parks and Recreation Administrator and has over 25 years of experience in public service.

The Las Virgenes Municipal Water District was awarded the California Association of Public Information Officials (CAPIO) 2023 Frank Potter Cowan Crisis Communicator Award in May. The District was honored for their dedication, perseverance, and customer-service central approach during the most critical months of the state-wide drought.

Matt Clutterbuck

Phil Lewis

Las Virgenes Municipal Water District

John Thiel, second from right, posing with board members of the South Tahoe Public Utility District

Matthew McElhenie

Santa Clarita Valley Water (SCV Water) hired Kevin Strauss as its next Communications Manager. Strauss comes from six years as Communications Specialist with the City of Santa Clarita. He replaced Kathie Martin, Communications Manager since December 2017, who retired June 15. Strauss will oversee a team of twelve in public outreach and education. His responsibilities will include oversight of outreach and engagement strategies on a wide spectrum of priorities for SCV Water, as well as employee engagement and legislative affairs.

Coachella Valley Water District (CVWD) Vice President Cástulo Estrada was elected to the Board of Commissioners for the Local Agency Formation Commission (LAFCO) for the eastern district of Riverside County. Estrada joins the sevenmember LAFCO Board as a special district representative. The LAFCO Board includes two Riverside County Supervisors, two City Council representatives, two special district representatives, and a member of the public.

Elsinore Valley Municipal Water District (EVMWD) is proud to announce that one of its own board directors, Darcy Burke, has been appointed to the United States Environmental Protection Agency’s (US EPA) Local Government Advisory Committee (LGAC).

Established in 1993, the LGAC is a critical advisory body for the US EPA, providing guidance on a wide range of environmental policies and programs. Composed of local elected officials and appointed representatives from across the country, the LGAC helps ensure the voices of local communities are heard in the development of national environmental policies. The LGAC is chartered under the Federal Advisory Committee Act, which regulates and governs its operation.

Adnan Anabtawi has been appointed as the next General Manager for the Mojave Water Agency effective April 5. He had previously served as Assistant General Manager. “The Board unanimously selected Adnan and has great confidence in his ability to lead this Agency,” said Board President Mike Page. “He brings extensive

knowledge and is engaged in critical state water issues, has successfully managed key capital projects with the Mojave Water Agency, and has demonstrated his abilities to effectively work with staff to continue to enhance the Agency’s culture.”

Congratulations to the 2022 Santa Barbara CSDA Chapter Award Winners, honored at the chapter’s annual awards dinner in May. (L-R): Staff Person of the Year Vesna Ibarra of Mosquito and Vector Management District of Santa Barbara County; Goleta Sanitary District Director Sharon Rose, honored for her two years of service as chapter president; CPA Carrie Troup, Contractor of the Year; and Mosquito District General Manager Brian Cabrera, who nominated two of the award winners. Not pictured: Chapter General Manager of the Year John McInnis of Goleta Water District.

Cástulo Estrada

Adnan Anabtawi

Santa Barbara Chapter Awards

Kevin Strauss

Darcy Burke

Got Governance?

Reserves: What Every Board Member, General Manager, Finance Staff AND Taxpayer Should Know

By Tom Scaglione, MBA, CPA, Chief Administrative Officer, Grossmont Healthcare District

Finance professionals write policy guidelines for finance professionals. Financial professionals write policies for normal people. Finance professionals are not normal. No offense intended.

The point is that very few, if any, of your special district constituents are finance professionals. You as a Board Member, GM, or CFO may know what is meant by “designated fund balance,” “GAAP,” “GASB 54,” “unrestricted classifications,” and “Net Position,” but those are not the kind of words your constituents understand, nor that should be written into your policies. Normal people know “money,” “cash,” “investments,” “monthly expenses,” “budget,” “$1 million,” “$10 million,” “$50 million.”

Tom Scaglione Chief Administrative Officer Grossmont Healthcare District

Some policy writers confuse Government Finance Officers Association Fund Balance Guidelines and Government Accounting Standards Board Statement Number 54 for reserve policy guidelines. They are standards and guidance for reporting the difference between assets and liabilities on a balance sheet, and there is no need to communicate accounting standards to constituents concerned about how much of their money you have and what you intend to do with it.

The reserve policy is more intuitive and too individualized to be dictated by pervasive standards. How much money do you need to set aside and for what purposes? How do you determine the amounts to set aside? How do you fund what you set aside? And what are permissible uses of the money you set aside? Answer those questions in plain, nonaccounting language, and you have an effective reserve policy.

During the session, “Reserves: What Every Board Member, General Manager, Finance Staff AND Taxpayer Should Know” at the 2023 CSDA Annual Conference, participants will be reviewing real-life special district reserve policies (agency and author names redacted) to consider policy

provisions worthy of imitation and those to avoid.

One agency (to be discussed and remain nameless) has a simple two-paragraph reserve policy with a total reserve maximum of “six months of average general fund expenditures,” an operating budget of $2 million, and unrestricted cash and investments on their audited balance sheet of $55 million. There may be good reasons to have $54 million in excess of your operating reserve maximum, but those reasons need to be justified, categorized, quantified, and communicated in the policy. No agency wants to invite undue scrutiny

by constituents, advocacy groups, or oversight agencies like the Little Hoover Commission.

Another agency (to be discussed and remain nameless) uses capital acquisitions as reported in audited financial statements as far back as the Eisenhower administration to predict future capital replacement costs for their capital replacement reserve without regard to asset condition or even if the assets still exist. Reserves are for the future and reserve methodologies need to be forwardlooking. Your district engineers put a great deal of thought and planning into capital replacements requested in the budget. Use a methodology that involves adopted budget requests or valid commitments and obligations for your reserve policy, not ancient and irrelevant history.

Some areas of your reserve policy help ensure compliance with regulations and covenants, as with restricted debt service funds. Other areas help navigate strategies for effective financial planning like managing debt service coverage with a well-written rate stabilization fund provision.

Special districts rise to the level of “Gold Standard” when their policies are worthy of imitation. Is it time to review your agency’s policies to ensure they are structured for their intended audiences?

Your district engineers put a great deal of thought and planning into capital replacements requested in the budget. Use a methodology that involves adopted budget requests or valid commitments and obligations for your reserve policy, not ancient and irrelevant history.

Future-Ready Influence: A Heart-Centric Approach to Transformational Leadership

By Seth Mattison, CEO and Founder of FutureSight Labs

In today’s rapidly evolving landscape, the nature of work is undergoing a profound transformation. Technological advancements, shifting demographics, and the demands of an interconnected global economy are reshaping the way we work. As traditional models and structures evolve, organizations find themselves in need of future-ready leadership to navigate the complexities of this new era. The moment requires a deep understanding of both the science and the human aspect of leading, especially during periods of deep uncertainty and hyper transformation like we face today.

Traditionally, a good leader was someone who could inspire a team, boost productivity, command respect, and ultimately deliver results. What these qualities often failed to achieve though was tapping into the human connection element required to unlock the dormant and unmet potential of people.

The challenge arises as our new ways of working blur the boundaries between our work and home lives. As our mental health declines and lack of connection to organizational culture continue to accelerate, it’s becoming more important than ever for leaders to take a humancentered and heart-led approach by putting people first. But what exactly does this approach to leadership look like and what could it mean for you, the team, and the organization?

In short, human-centered, heart-led leadership can be defined as prioritizing people at the forefront of leadership. It goes beyond a mere catchphrase, and its practical

implications hold immense value.

Being human-centered entails recognizing and appreciating individuals for their unique qualities and honoring their personal circumstances. In the realm of work, this translates into perceiving employees as human beings, not just job titles. It involves compassion and active listening to extend support whenever required.

What it doesn’t mean is lower standards of excellence or minimizing accountability. Putting people first means calling people up to their place of highest potential. It means establishing a culture of ownership and bias for action while balancing the pressures of home life. And the impact extends beyond improving humans lives to driving bottom line results.

In fact, new data reveal that employees who feel cared for and connected to others at work are:

• 3.2x more likely to be happy at work

• 3.7x more likely to recommend working for their company

• 93% are motivated to do their best at work

• 88% reported feeling engaged

So how do we activate a human-centered, heart-led approach to our leadership practices?

We can start by:

Cultivating Emotional Intelligence and Strengthening Connections:

Emotional intelligence forms the foundation of effective leadership, enabling leaders to connect with their team

members on a deeper level. By incorporating the following tips, leaders can enhance their emotional intelligence and forge genuine connections within their teams.

• Practical Tip 1: Active Listening and Empathy: Practice active listening and demonstrate genuine empathy. Create a safe space where team members can openly express their concerns, fears, and aspirations. By actively listening and empathizing, leaders validate the emotions of their team members and foster trust and psychological safety within the team.

• Practical Tip 2: Transparent Communication and Authenticity: Communicate openly and transparently, sharing the vision, objectives, and challenges with your team. Be honest about the realities, setbacks, and potential risks. This transparency builds trust and inspires confidence in your leadership. Combine this with authenticity, showing your true self and encouraging open dialogue. This authenticity fosters connection and helps team members feel comfortable sharing their thoughts and ideas.

Recognizing and Valuing Contributions:

One of the great drivers of human connection can be found in the power of recognition to motivate and engage team members. By incorporating the following insights, leaders can create a culture of appreciation that fuels enthusiasm and fosters a deep sense of belonging, which according to research is our collective highest held value in United States.

• Practical Tip 1: Tailored Recognition: Customize recognition to individual preferences. Some team members may appreciate public praise, while others prefer a more private acknowledgment. By personalizing recognition, leaders show their genuine interest in the well-being and preferences of their team members, strengthening the bond between leader and employee.

• Practical Tip 2: Timely and Meaningful

Appreciation: Offer genuine and timely recognition. Regularly acknowledge the accomplishments and efforts of your team members, whether it’s a public commendation during a team meeting or a personalized note of appreciation. Genuine recognition reinforces positive behavior and fosters a culture of gratitude, motivating individuals to perform at their best.

Unleashing Potential with Empowerment and Heart:

To be a truly future-ready leader, trusting and empowering others to do their best work is required. While it can be hard at times to let go and give up control, for others to

flourish and tap into their unmet potential, empowerment is required. By activating these strategies, leaders can create an environment where team members feel valued, understood, and trusted to do their best work.

• Practical Tip 1: Develop Emotional Intelligence and Self-Awareness: Cultivate self-awareness and emotional intelligence. Understand your own emotions, triggers, and biases, allowing you to manage your responses effectively and recognize when holding on to tasks, responsibilities, and titles for fear of giving up control limits the team’s development and long-term growth.

• Practical Tip 2: Empower and Activate Others: Empowering others to make decisions and drive outcomes is a catalyst for remarkable impact. When we trust and enable individuals to take ownership of their work, we unlock their full potential and foster a culture of innovation and collaboration. By empowering others, we create an environment where diverse perspectives are valued, and creativity flourishes. This approach not only distributes leadership responsibility but also nurtures a sense of ownership and accountability among team members. As a result, we witness increased engagement, higher levels of motivation, and ultimately, the collective achievement of exceptional outcomes.

The heart of leadership in our new world of work lies in our ability to inspire and influence others through genuine connections, transparent communication, and a deep understanding of the human experience. And together we’ll usher in a new era of work.

Opening Keynote Speaker: Seth

Mattison

CEO and Founder of FuturSight Labs

The Heart of Leadership: The Secret & Science to Influencing & Leading During Transformation

August 29, 2023

Turn Your Customers into Fans: Share Your Story

The importance of bringing customers along for the journey of public service, as told by an award-winning filmmaker.

By Kristin Withrow, CSDA Communications Specialist

Imagine selling a product to customers who don’t have the option to choose other products, and the product you sell is necessary to your customer’s life. It’s the easiest ‘sales job’ around, right? You have a product, your customer needs it, and you have no competitors. Terrific!

But if sales are that easy, why should districts work so hard to keep their customers happy? Why spend precious time and funds on community outreach, or send your leaders to educational and networking events like the CSDA Annual Conference and Exhibitor showcase to learn to excel when your customer base is a sure thing?

The answer is simple: You, your staff and leadership care about doing a good job for the community. As a special district, your agency is specifically designed to overcome a challenge unique to your area. When you think about it, your special district is a sort of low-key hero – bringing essential services to your community that they cannot get anywhere else.

So why is it important to bother marketing your product, sharing your projects, goals, and financial analytics all the while ensuring public access and transparency in every

vote, large decision, and meeting? For one thing, you are required to uphold basic transparency practices as a steward of public funds. As a member of the California Special Districts Association, your agency goes beyond the basics. It is important that your customers know the size of your challenges, share your enthusiasm for overcoming the obstacles that arise, and understand and celebrate the stamina your agency displays in its ever-constant march toward its goals.

It’s important to get your public in your corner. One excellent way to do that: Tell Your Story.

Enter CSDA Annual Conference & Exhibitor Showcase

Keynote Speaker Matthew Luhn. Formerly of Pixar, Luhn is an award-winning filmmaker and director with some impressively entertaining story credits in his background, including Monsters, Inc., Toy Story, and Ratatouille. He’s helped take audiences on a hero’s journey through film and now he is coming to show special district leaders the importance of storytelling in business.

“Everybody perks up when a story starts to be shared,” said Luhn.

Humans are natural storytellers, but adults often lack the confidence to break away from the model of presentations that involve data sets, graphs, and long explanations telling the audience what to think. That method is the opposite of storytelling! Break away from the mold and tell a story your audience can relate to; one that generates feeling and uses the senses. These are the stories people relate to and internalize.

Special districts don’t have teams of writers, marketing professionals, graphic designers, or staffers with backgrounds in the filmmaking industry – yet it is possible to take away from Luhn’s keynote presentation the tips, tricks, and confidence to get out of the government mold and reach your audience in a meaningful way.

“Most people are not early adopters, only 15% of the population will try something new without first seeing others adopt the new idea and try it first,” explained Luhn. “I’ll share how to change people and transform them to try something new through a story.”

There are many types of stories to be told from the operations of a district. Perhaps it is the story of a project, a necessary rate increase (gasp), or the broad story of why your district exists, how it came to be and what challenges it solves in the community.

“Districts want to make authentic connections with the community because they want the people to understand what the district is offering. When you only share facts and figures, people will retain only 5% of what you share just 10 minutes after your presentation ends. If you really want people to understand what you’re talking about, and also feel how it’s relatable to them, you have to use some story skills,” said Luhn.

Visual storytelling is the number one tool to be able to communicate information people will remember. When creating a presentation, use few words and select representative images instead. Speak to the images to tell the story while letting the image set the scene. Let your data sets be reference materials for those who glory in combing through a detailed spreadsheet.

Luhn will teach us how to communicate what he calls a “hook” in 8 seconds to capture your audience’s attention.

Learn how to overcome your customer’s inclination to resist change by bringing them along the hero’s journey –set the scene with an act of kindness or favorable outcome your audience relates to, then take them along to feel the tension of the challenge, the ups and downs that your district (in this case, the district is the hero) overcame through dedication and endurance, and allow the audience to share in the satisfaction of a goal attained through perseverance. After all, the goals special districts aspire to achieve are the very goals they were created to achieve by the community itself.

Luhn teaches us that storytelling doesn’t require a special writing skill or film school. Public agencies can reach audiences by staying authentic to universal themes of storytelling, thus connecting with a broad audience, and following a formula of setting up the story (the “hook”), building up the suspense along the journey, and enjoying the satisfaction of the payoff.

Your customers benefit from the successful accomplishment of your mission: Be sure they come along for the journey.

August 28 - 31, 2023 Monterey, California

The Leadership Conference for Special Districts

SDRMA Keynote: Matthew Luhn Formerly with Pixar, Story Artist, Creativity Expert & Author

Strengthening Community Bonds: The Power of Public Events for Special Districts

By Joshua Bonner, General Manager, Coachella Valley Public Cemetery District

As special districts, our primary focus is to deliver essential services that enhance the quality of life for our community. We strive to be there for our neighbors when they need us. However, amidst the complexities of an ever-changing world, it is crucial to ask ourselves an important question: Will our community be there for us when we need them? At this year’s CSDA Annual Conference & Exhibitor Showcase, we will explore the significance of cultivating strong relationships between special districts and their communities. By understanding how perceptions and feelings are shaped, we can better inform our efforts in building a resilient bond with the people we serve. Here are some key aspects special districts should consider in their interactions with the community.

The Importance of Strong Community Relationships

To build your brand, it helps to expand beyond the notion that special districts solely exist to deliver a particular service. By adopting a more holistic view of the district’s place within the community, we can position ourselves as interconnected partners, actively involved in enhancing the overall well-being of the areas we serve.

Ask any organization that has faced a crisis, and they will attest to the importance of a strong community relationship. Every agency, no matter how dedicated, will eventually encounter challenges, ranging from service failures to governance issues and legislative hurdles. Navigating these obstacles often requires

community input, engagement, and support. The process becomes smoother and more effective when the community already has a positive perception of our brand and organization. By proactively building a solid foundation of trust and goodwill, we can better weather the storms that may come our way.

Harnessing the Power of Public Events

One often overlooked aspect of public relations for special districts is the utilization of public events. Some districts may hesitate to engage with the community outside of their usual operations or prefer to use traditional advertising and marketing avenues when trying to get their message out. Advertising channels like mailers, tv

and radio ads, and other marketing devices can be effective forms of one-way communication, but events provide a unique opportunity to foster personal connections, build relationships beyond the services we provide, and generate positive sentiment within the community. These events can also serve as platforms for education, advocacy, and raising awareness about our services. For example, at Coachella Valley Public Cemetery District, we host a Dia de los Muertos community event that is open to the public, gives them a reason to come to the cemetery in celebration and provides a positive interaction between the district and the community.

COMMUNITY CONNECTIONS

The Coachella Valley Public Cemetery District hosts an annual Dia de los Muertos event with live music, folkloric dancing and traditional blessings that is open to the public. Bringing the community together in celebration at the cemetery is an activity that fosters goodwill and community pride in the district. The Coachella Valley Public Cemetery was formed in 1927 with boundaries that include approximately 3,444 square miles.

Be a Champion

As special districts, our ability to navigate change and overcome challenges is greatly influenced by the relationships we foster with our communities. The effort to engage with the community must be made consistently, and frequently to build trust and rapport in good times as a foundation for the inevitable challenging times that occur. By embracing the power of public events and expanding our role as community partners, we can proactively shape perceptions, establish trust, and generate support.

Join us in the CSDA Annual Conference & Exhibitor Showcase session, "Public Events to Build Community Equity," to explore how events can serve as catalysts for building stronger bonds, advancing the district’s mission, and becoming advocates for positive change within our communities. Together, let's strive for meaningful engagement, collaboration, and the continued enhancement of our vital services.

Solutions & Innovations

Save Money and Time with Programmatic Environmental Impact Reports (PEIRs)

Manager; and Malik Tamimi, Senior Project Manager

Special districts often face significant challenges when managing construction and maintenance activities while complying with complex environmental regulations. The California Environmental Quality Act (CEQA) mandates thorough environmental impact assessments for various projects, resulting in potential delays and unforeseen expenses. However, the Rainbow Municipal Water District (District) has taken a new approach to streamline the process and save substantial time and money through the use of a Programmatic Environmental Impact Report (PEIR). By adopting this novel strategy, the District has not only streamlined the CEQA review process for infrastructure projects, but also significantly reduced costs and project timelines.

Written in collaboration by the following staff of Rainbow Municipal Water District: Tom Kennedy, General Manager; Chad Williams, Engineering & CIP Program Manager; Karleen Harp, Human Resources

A PEIR enables a public agency to prepare a single environmental impact report for a series of actions that have similar environmental effects and can be managed in similar ways. By analyzing the reasonably foreseeable projects and maintenance activities, a PEIR offers a comprehensive consideration of potential environmental impacts, mitigation measures, and alternatives. This streamlines the CEQA process, ensuring a consistent approach for all district activities and generating significant time and cost savings.

The Rainbow Municipal Water District routinely undertakes sewer and water conveyance and storage projects to manage and support its water supply and sewer systems. In the past, the District handled CEQA requirements on a project-by-project basis, leading to redundant analyses, unexpected expenses, and delays. Recognizing the need for a more efficient approach, the District embarked on the PIER process.

RMWD took an innovative and holistic approach by expanding the coverage of the PEIR beyond the known five-year planned capital improvement projects. RMWD included all of its water and sewer pipelines, allowing future repairs and unanticipated projects to rely on the PEIR. This comprehensive and forward-thinking approach enables RMWD to efficiently add unanticipated projects by simply amending the plan, saving valuable time and resources, and reducing the need for extensive additional environmental assessments and potential delays.

Furthermore, the PEIR developed by the District encompasses an analysis of its foreseeable projects, maintenance activities, and construction efforts related to sewer and water conveyance and storage. It takes into account various aspects, including biological resources, cultural resources, and paleontological resources. Through extensive field surveys and detailed technical reports, the District ensures a thorough evaluation of potential environmental impacts, cumulative effects, mitigation measures, and alternatives. Over 75% (280 miles) of the RMWD’s pipeline projects would not require substantial bio measures (i.e., habitat replacement or permitting). As a result, there is no additional CEQA filing for projects covered by the PEIR (all District pipelines).

“While the process of analyzing the entire potable water and wastewater systems took the better part of two years to complete, the end result was worth it,” highlighted Chad Williams, the Engineering and CIP Program Manager. “The

SOLUTIONS & INNOVATIONS

District is now able to comply with all CEQA requirements for any given project in a streamlined and cost-effective manner. This saves time and money on each project the District is working on.”

The adoption of the Programmatic Environmental Impact Report by the Rainbow Municipal Water District has proven to be a game-changer for streamlining CEQA compliance. By encompassing the entire scope of its water and sewer systems, and not simply its five-year CIP as most agencies do, the District has set an example for other organizations to follow. The time and cost savings achieved through PEIRs, combined with their significant contribution to environmental protection and streamlined project delivery, are noteworthy.

One of the key advantages of utilizing PEIRs is the early engagement with stakeholders. The District has actively involved neighboring Native American Tribes and sought their feedback and consultation throughout the PEIR development process. This commitment to engagement and transparency strengthens relationships with the Tribes and fosters collaborative decision-making, leading to better project outcomes and community support.

Rainbow Municipal Water District General Manager Tom Kennedy emphasizes the benefits of the PEIR approach, stating, “The traditional project-by-project method of CEQA compliance is time-consuming and expensive. With our innovative approach to analyzing the whole system at once, we will deliver value to our ratepayers, saving both time and money.”

The benefits of this approach, ranging from substantial time and cost savings to enhanced environmental protection, position PEIRs as a valuable tool for other special districts seeking to streamline their project processes. Other special districts can learn from Rainbow Municipal Water District’s experience and consider implementing PEIRs to achieve similar benefits, improving efficiency, and delivering value to their constituents. With PEIRs, special districts can effectively manage environmental considerations while focusing on providing essential services to their communities.

Learn more at the CSDA Annual Conference & Exhibitor showcase breakout session, “Save Money and Time with Programmatic Environmental Impact Reports (EIRs).”

Tech Tips

Opportunity is Knocking on Nextdoor

By Robbie Turner, Public Agency Partnerships Lead, Nextdoor and Ryder Todd Smith, President, Tripepi Smith

Nextdoor is the neighborhood network where neighbors, businesses, and public agencies connect to the neighborhoods that matter to them. As a purpose-driven company, Nextdoor leverages innovative technology to cultivate a kinder world where everyone has a neighborhood they can rely on — both online and in the real world.

California Special Districts Association (CSDA) played a significant role working with Nextdoor to help in its policy development related to special districts. This multi-year effort began after receiving a wide range of inquiries from CSDA members, as well as anecdotes at CSDA conferences. Special district leaders clearly saw value in gaining equitable access with cities and counties to the platform to ensure communities served by special

districts would receive the same access to information and resources they need.

Special districts on Nextdoor are able to geo-target specific neighborhoods and create custom service areas within district boundaries to geotarget subsets of the district. Such flexibility enables micro-targeting of messages for service interruptions, public information for events such as maintenance activity in an area, or emergency alerts.

Now special districts can turn to Nextdoor to target their messaging among a built-in audience of real residents using a free Nextdoor for Public Agencies page and can also advertise on Nextdoor with flexible budgeting options for districts of all sizes.

Ryder Todd Smith,

of the communications consulting firm Tripepi Smith.

To apply for a Nextdoor Public Agency page or for ads, click Get Started at Nextdoor.com/agency.

“We tell all our public is one of the most important social media platforms for engaging your community. No other platform lets you reach verified residents as easily.”

President

Who Responds to the Responders?

There is a culture shift among first response agencies away from emotional suppression and toward healthy processing of traumatic events.

By Kristin Withrow, CSDA Communications Specialist

America’s understanding and de-stigmatizing of mental health is on the rise. The nation’s understanding of post-traumatic stress disorder has its roots in the need to help soldiers returning from war and struggling to repatriate into civilian life. The U.S. Department of Veterans Affairs first recognized the condition in 1980 when the American Psychiatric Association added it to the third edition of its Diagnostic and Statistical Manual of Mental Disorders.

Post-traumatic stress disorder is defined broadly as a condition that may last months or years, with triggers that can bring back memories of trauma accompanied by intense emotional and physical reactions. People who experience unprocessed extreme stress events have a higher likelihood of later exhibiting symptoms such as sleep disorders, aggression or irritability, anxiety, hypervigilance, or difficulty concentrating, among other things.

The recognition that a mental health condition can be caused from experiencing traumatic events opened the door to developing strategies to assist individuals in

processing long-term or intense stress experiences to reduce the instance and severity of negative outcomes. America’s first responders are susceptible to mental health challenges due to the unique nature of their jobs. Firefighters and peace officers operate in shifts around the clock, causing physical and psychological stress for individuals working “swing” or “graveyard” shifts. Overnight work can cause a disconnection between family and social lives that may isolate these workers. Add traumatic calls that require literal life-and-death decisions, and you have an environment prone to causing stress by its very existence.

Historically, both police and firefighter cultures maintained a stoic view of mental health that required first responders to have a “suck it up” mentality of tamping emotions down to avoid processing the experiences that arise in the line of duty. Mental health advances have taught us that this “get over it” mindset leads to problems. The culture shift away from this mindset has begun with support from unions, state policies, and participation from police stations and fire houses across the state.

California State Senator John Laird introduced Senate Bill 623 in February to amend a section of the labor code. The goal of the bill is to expand the scope of protections for first responders, including peace officers, firefighters, dispatchers, emergency communications employees, and other groups that may be affected by the intensity of employment in first response industries, through January 2032, and make access to mental health services easier in the state-run insurance programs.

In May, Senator Laird tweeted ‘@SenJohnLaird #SB623 is such an important piece of legislation. Let’s ensure we help our first responders get the coverage and services that they deserve.’

At the local level, many districts have developed support programs. Stallion Springs Services District in Tehachapi provides police, fire, mail, parks and recreation, mail service, trash, wastewater, water and weed abatement programs for their remote mountain community of 2,500 residents.

The police department participates in a program called “Critical Incident Stress Debrief” (CISD). The debriefing after a traumatic incident includes a facilitator-led meeting by licensed psychologists, a group discussion including all parties broadly involved (dispatchers, ambulance drivers, etc.). The facilitator leads the group through an exploration of each person’s perception and experience to allow them to examine their interpretations and process the experience together.

“The department also uses Lighthouse Health & Wellness by APEX Mobile, which is funded by sponsors. The anonymous application allows personnel to seek the assistance of clinicians, either locally or virtually, in a confidential manner,” said Police Chief Gary Crowell. “Apps like this allow officers to find a way to process stress that is free of charge.” Chief Crowell also noted, “Police can be more isolated than other types of first responders because we generally work call-to-call. Where other types of agencies, like fire or ambulance, often live in departments together for stretches of time, police do not. The result can be a tendency to move on without talking to colleagues during down time, causing officers to internalize stress instead of process it.”

Chief Crowell is encouraging the culture shift away from stoicism in his department. “The goal is to remove the stigma that police culture has held that may cause officers who ask for help to worry they will be removed from duty or sidelined in some way,” he said.

At Montecito Fire District in Santa Barbara County, Firefighter Paramedic Andy Rupp is a leader of the six member Peer Support Team which is also part of a broader county peer support team in place throughout the entire operational area of Santa Barbara County.

To be a member of the Peer Support Team, Rupp said it is important that candidates be people who are perceived by their colleagues as trustworthy, non-judgmental and accessible. Agencies who want to adopt a program could start by identifying those colleagues to whom people are drawn to already. The firefighters who are already confided in make excellent candidates to receive training to be able to make their natural affinity broadcast further, while also formalizing the layer of confidentiality and trust.

“The team members receive training to recognize the signs of someone struggling with stress or experiencing challenges in their life that pose extra stress in addition to their job,” said Rupp.

Their Peer Support Team received training through an organization called The Counseling Team International. In addition, the International Association of Firefighters has peer support training available. The county programs are linked together as one team representing broad experiences and support opportunities through firestrong. org. Peer Support Team members upload their profile and background to the site to allow firefighters seeking support to find a member of the team that resonates with their experience.

In all cases, confidentiality and access are keys to acceptance and success of the programs. The mindset shift toward support embraces the reality that healthy personnel form stronger teams and achieve better outcomes in their own mental health as well as in performance of their duties, along with reduced sick days. These programs improve critical services to the community while supporting the men and women who serve in these important roles.

Legal Brief

Privacy and the Proper Receipt, Storage, and Use of Confidential Information in the Workplace

By Robert Cutbirth and Ryan Quadrel, Slovak Baron Empey Murphy & Pinkney LLP

Public employers are regularly challenged by “disability discrimination” and “retaliation” claims. Given recent changes in the law, and a changed emphasis by Plaintiff’s attorneys, greater attention must now be given to privacy right exposures, particularly when health-related information is involved. Even if no discrimination or retaliation occurred, privacy claims arising from the handling of disability accommodation, return to work, leave of absence and other situations can still lead to large compensatory damage and attorneys’ fees awards. Our session at the upcoming Annual Conference is therefore intended to help you avoid and minimize these risks, particularly in the post-COVID more challenging employment landscape.

Depending on the size of your agency, you may have multiple employees providing “human resource,” “risk management,” “return to work,” benefit, and other functions where the sharing of information regarding an employee’s or family member’s former, current, and potential future health and personal information may have direct relevance to job functions and legal compliance. Yet, even if you are acting in good faith, the failure to properly obtain, store, and share information, particularly with challenging employees, creates operational and litigation risks.

There are some key areas of risk exposure to be considered, including:

• Industrial Injuries, where overlapping human resource (leave of absence, disability accommodation) and workers’ compensation (claim benefits/return to work) functions can trigger duties to shield medical or personal information from being automatically shared without waivers/permissive emails. While those involved in the workers’ compensation claim may be entitled to a variety of historic and current health-related issues, disability accommodation processes are limited only to the disability for which “accommodation” is presently sought. A broader sharing of information among workgroups, or employee files, can then violate employees’ rights to privacy.

• While the new California Consumer Privacy Act does not directly apply to public agencies, Plaintiff’s attorneys (and employees) are now more aware of “privacy” issues based on older statutes (California Medical Privacy Act), causing greater friction in managing the already challenging “interactive process,” as well as the incorrect suggestions that HIPAA applies to these situations. By using specialized forms and identifying clearly in writing the consequences of a failure to cooperate in the required exchanges of information, we will provide guidance on how to gain

employee cooperation or safer paths to separation for noncooperating employees.

• Early return to work is often desirable for all, with special care needed in the receipt and handling of medical clearances, restrictions, and “fitness for duty” evaluations. Care should be taken when reviewing these documents and the misinterpretation or mishandling of these documents by all concerned in return-to-work situations, can lead to liability, including key steps to be taken to avoid those risks while also ensuring a returning employee does not present “undue” risks and exposures.

• Methods of communication have also changed, with “Zoom,” emails, text messages and social media communications presenting new challenges. Not only are “personal spaces” and situations now exposed, particularly with remote workers, an unfortunate “casualness” has arisen in these “permanent” forms of communication, where a single text message referencing personal health or confidential information (not just health information) can be the difference in creating liability. Proper use of policies/handbooks, and other tools to reduce these risks and provide training tools and resources must be utilized, as well as boundaries created by “protected speech” considerations.

• There is also a Post-COVID reality - there has been a heightened level of emotional responses and (over) reactions by employees to safety and health protections, and the providing of their personal health information, with medical care providers (when they are available) often equally problematic in finding “solutions” to genuine concerns. As employees also more frequently are using sick leave and leaves of absence to avoid work and are also using health care providers to assert that a return to work would put an employee at risk, there are assertive strategies that can safely be used to minimize these workplace disruptions.

• Faced with ever changing legal standards, competing job duties, changed workplaces, and challenging employees and care providers, it is critical for district leaders safely collect, store, and share private and confidential employee information. The goal is not just to avoid liability risks, but to manage the workplace and its needs without undue disruption and tensions.

Join this session “Privacy and the Need to Share Information in the Workplace” with Rob Cutbirth and Ryan Quadrel, SBEMP, at the CSDA Annual Conference & Exhibitor Showcase!

Senator Alvarado-Gil Seeks Long-Term Solutions to California Wildfires

CSDA first met candidate Marie Alvarado-Gil in the runup to the election in 2022 when she attended a special district tour of the Sierra Network to learn firsthand about the challenges in wildland-urban interface areas from forestry experts and special district leaders. When the Democrat went on to be the first female elected to serve as Senator in District 4, the experience helped her become an important voice in the Legislature on the issue.

We caught up with the Senator to ask her opinion of the issue, where she sees opportunity for improvement in the State’s effort to mitigate the fire risk and to help communities recover if they have fallen victim to the devastation of a wildfire. The following has been lightly edited for space.

CSDA: Fire prevention and forest management is a significant issue in your Senate district. How can the State better partner with resource conservation districts, fire protection districts, and other special districts in confronting this challenge?

Senator Alvarado-Gil: It is hard to find someone in California who has not been directly impacted or doesn’t know someone affected by a wildfire. It is increasingly crucial for the State to prioritize partnerships with special districts regarding wildfire prevention and forest management. To effectively address this challenge, we must look at these four areas:

Funding

We must continue to allocate funds and offer grants for projects such as fuel reduction, prescribed burns, infrastructure hardening, and forest restoration. Cal Fire spent an estimated $1.2 billion on emergency fire suppression in 2022, compared to only about $90 million just over ten years prior.

Policy Support

Continue to develop policies recognizing and supporting special districts in wildfire prevention and

forest management. A prime example is SB 470, a bill I authored that just passed the Senate 40-0, which provides funding for drought relief projects in wildfire risk zones. The bill resulted from a collaboration with the Tahoe Public Utility District.

I also work closely with the leaders of the Senate's Wildfire Working Group. Their Blueprint for a Fire Safe California hinges on four key areas:

• Training and deploying a fire resiliency workforce;

• Implementing a modern-day vegetation, forest management, and community hardening plan;

• Expanding consumer access to the homeowners' insurance market; and

• Developing a short and long-term funding plan in California.

I am committed to developing plans for real, long-term solutions to promote forest health and restoration, manage vegetation, and invest in a well-trained workforce to clear fuel, and strengthen wildfire emergency response.

Collaborative Planning

Actively engage the districts and constituents in planning wildfire prevention and forest management.

Coordinated Project

The State can coordinate projects and initiatives between agencies and special districts to optimize resource allocation and achieve greater efficiencies.

CSDA and the National Special Districts Coalition have wildfire-related advocacy initiatives that special district leaders, particularly those in areas at risk of wildfire, can follow and respond to our calls for action. To learn more, subscribe to CSDA Advocacy News on our website at www.csda.net and follow @CSDAdistricts and @NSDCdistricts on Twitter.

Industry Insights

Leading A Values-Based Organizational Culture

By Sean Barclay, CSDM, General Manager of Tahoe City Public Utility District

In today’s rapidly changing business world, special districts need to find a competitive advantage to ensure recruitment and retention of the best and brightest talent who are willing to commit themselves to a career in public service. Building a strong organizational culture is key to establishing an identity as an “employer of choice” and positioning your district for success into the future.

The Tahoe City Public Utility District (TCPUD) provides drinking water, wastewater collection services and parks and recreation opportunities to customers within a 31 square mile service area along the north and west shores of Lake Tahoe. Together, TCPUD’s outstanding team of 61 full-time employees, and nearly twice that number of seasonal staff, demonstrate our vision and commitment to “building a healthy mountain community through our passion for public service.”

As the General Manager of the Tahoe City Public Utility District (TCPUD), I have the unique opportunity to lead an outstanding organizational culture built on a foundation of core values. For the TCPUD, the core values go beyond a “set of words on a wall” and have been deeply ingrained

and aligned at every level of the organization. The path to moving beyond surface level adoption of the core values was not always an easy one, however the benefits have been substantial. Our passion for public service and behavioral alignment has led to high levels of customer satisfaction, improved recruitment and retention, provided valuable supervisory tools and created an engaging, positive workplace for our team members. Notably, TCPUD was recognized (based solely on employee nominations) as the “2023 Best Place to Work” by the North Tahoe Community Alliance.

The following are key areas of focus to consider when evaluating and changing workplace culture:

Establishing Your Core Values

Every organization should establish their own set of core values that are clear and meaningful to their organization. The TCPUD’s transformative journey to a true values-based culture began in 2014 when the organization noticed that employee engagement and morale were not registering at the desired levels. Conflicts among employees had increased and as a result, productivity suffered. To remedy this, we began a year-long process, led by a group of

mid-level supervisors, to establish a set of shared core values and associated observable behaviors. The goal of the process was to set forth expectations clearly and intentionally for how team members would be expected to behave with each other, with our customers, and with all our stakeholders. The Values Team worked to document existing positive behaviors that were demonstrated by team members in the district and combined those with new behaviors that would inspire team members toward excellence in serving our community.

After over a year of hard work and a lot of challenging decisions and discussions, the senior management team and Board of Directors supported and adopted the onepage set of formalized Core Values that has become our guiding document.

Moving beyond Surface-Level Adoption

While the creation and adoption of the Core Values was difficult work, the real challenge for TCPUD began in earnest when working to embed the values and behaviors into the culture of the district. A key step in this process was the inclusion of the Core Values into every employee’s annual performance appraisal, weighted evenly with the rest of their functional competencies. This shift required dedicated communication with all employees and training for supervisors and managers. In recognition of the fact

that an organization’s “actual values,” as opposed to the nice-sounding values, are shown by who gets rewarded, promoted or let go, the TCPUD made concerted efforts to demonstrate and model the commitment to the values through these practices. Over time, these efforts have become ingrained in our culture and have built an environment of trust with employees that we are genuinely committed to living by these values.

Benefits and Lessons Learned

Implementing a values-based organizational culture can yield tangible benefits over time. We have noted positive impacts on employee morale, customer satisfaction, and overall organizational performance.

Wherever your organization is in the process of defining its culture, understanding the challenges to implementation of a values-based organizational culture and the benefits it can provide in creating alignment, improving employee engagement and retention and recruitment is worth exploring.

Tahoe City Public Utility District’s Core Values document can be found at www.tcpud.org/about.

Join this session “Leading a Values-Based Organizational Culture” at the CSDA Annual Conference & Exhibitor Showcase!

...the core values go beyond a “set of words on a wall” and have been deeply ingrained and aligned at every level of the organization. The path to moving beyond surface level adoption of the core values was not always an easy one, however the benefits have been substantial.

Steady as you go.

When your team and ours all pull together, you get the sure-footed stability you need to proceed with confidence. As an extension of your staff, we are always at the sidelines delivering service and expertise. For everything from Workers’ Compensation and Property/Liability coverages to Health Benefits options available throughout California, we are here to keep you going strong. For more information, visit sdrma.org.

Managing Risk

What’s More Important: Fraud Prevention or Detection?

By David Becker

It’s a trick question. They are both of critical importance, according to SDRMA Spring Education Day speaker David Becker in his Fraud Detection & Prevention presentation to a room full of special district professionals in March.

There are core strategies to enact to set the stage for fraud prevention. Along with a set of practices designed to detect fraud when it occurs, an agency can set itself up with protective measures to reduce fraud risk overall.

First, it’s important to understand why fraud occurs. According to Becker, there are three drivers of fraud that are almost always present when fraud occurs. The fraduster has opportunity, an incentive, and rationalization. Identifying when these components align and taking measures to reduce them, leads to reduced likelihood of fraud.

Let’s take a look at these components and provide some ideas agencies can implement to counteract their occurrence and prevent fraud.

Opportunity can arise when agencies have inherent risk components, such as accepting cash for ticket sales, or complex projects. Agencies can reduce an opportunity to pocket cash by having multiple staff members account for it. For example, one person sells the ticket and accepts the cash, another counts the tickets and cross references the number sold to the amount of cash in the cash box at the end of the event, and a third person is responsible for securing the funds in a safe and verifying the deposit amount matches the verified amount. In the case of complex projects, it is important to have multiple people overseeing the project’s contracts, equipment inventory and management, and an auditor for grants, funds, accounts payable and contracts.

continued on page 44...

Incentive to commit fraud can come in various forms. It may come in the form of personal financial challenges, life events that cause financial strain, or other forms that can be difficult to identify. Setting a culture of fraud prevention and detection can set a tone of zero tolerance that dissuades those with incentive from becoming a bad actor. This tone is set from the top, and should be built into processes for expense reporting, financial audits, and be addressed in department meetings and training. Rationalization, or justification, is present in every case of fraud. It is the thought process that enables someone to commit fraud because they convince themselves they “deserve” the item or money they are stealing. Employee retention and satisfaction initiatives designed to enhance a supportive work culture where employees feel appreciated, have support from their supervisor, or feel they are recognized for their contribution can reduce this aspect. While prevention techniques are critical to set up proactively to stop fraud from occurring, it is equally important to have methods to react to instances of fraud. The key is to have policies and processes in place to detect fraud quickly.

Becker pointed out two categories of “red flags” to be aware of: Employee indicators and financial indicators.

Employee indicators should be noted and explored carefully. Take caution to work with the facts in place and not to speculate or make assumptions. Employee indicators may include:

• Behavior changes

• Lifestyle changes

• Refusal to take time off

• Unreasonable responses to reasonable questions

Financial red flags in the agency should be identified through policies and processes that are designed to shine a light on anomalies. Financial indicators may include:

• Budget overage

• Complex or unusual journal entries

• Unexpected cash balances

• Unusual long-term trends (It is important to have a consecutive trend view of at least five years)

Agencies should perform risk assessments to evaluate the quality of the controls in place. While it is important to have policies in place to reduce risk, they are ineffective if they are not adhered to – risk assessments should include an assessment of adherence to policy. When fraud is discovered, it should be investigated thoroughly to uncover facts. Avoid speculation. Include legal counsel, verify the facts with external audits, and notify the Board of the process.

Taking proactive steps to ensure reliable accounting processes are in place and adhered to, along with employee satisfaction initiatives to build a culture of loyalty to the agency and identify steps for action in instances of suspected fraud are all critical components to an agency’s fraud prevention and detection capacity.

David Becker retired as a Partner at James Marta & Company in 2021. With over thirty years of experience in public accounting, he has participated in industry committees, mentored dozens of staff accountants and provided practical insight and guidance to government agencies.

Video Contest Scholarship Winners Announced Students

Receive Scholarships in Three States

The Districts Make the Difference annual student video contest paid off for students in California, New York, and Florida this year. Just in time for the end of the school year, these students captured scholarships for themselves and their teachers.

U.S. high school students across the country were challenged to learn about special districts, either broadly or a specific district in their community, then create a 60-second video explaining what they’d learned. The contest received videos from 22 states with a variety of

themes and videography techniques. The videos included interviews of district staff, green screen technology, original artwork and cartoons, songs, and movie parodies. Ten finalists were selected by a panel of special district professionals who enjoyed all the creative submissions and ultimately settled on the top ten based on accuracy of information, creativity and originality, and entertainment and video quality. Watch the videos at districtsmakethedifference.org/video-contest Congratulations to our scholarship recipients!

1st Place recipient of a $2,000 scholarship

Isabella Masrouga, CHAMPS Charter High School of the Arts in California

2nd Place recipient of a $1,000 scholarship

Ian Lape, Spencerport High School in New York

3rd Place recipient of a $500 scholarship

Matthew May, Palm Beach Gardens High School in Florida

BUSINESS AFFILIATE SPECIAL ACKNOWLEDGEMENTS

DIAMOND LEVEL

Actuarial Retirement Consulting, LLC www.awenarc.com

AllPaid www.AllPaid.com

California CAD Solutions (CALCAD) www.calcad.com

California CLASS www.californiaclass.com

CPS HR Consulting www.cpshr.us

CSDA Finance Corporation www.csdafinance.net

PLATINUM LEVEL

Atkinson, Andelson, Loya, Ruud & Romo www.aalrr.com

Best Best & Krieger www.bbklaw.com

Five Star Bank www.fivestarbank.com

Enterprise Holdings www.enterpriseholdings.com

GovDeals www.govdeals.com

Special Districts Risk Management Authority www.sdrma.org

Streamline www.getstreamline.com

Umpqua Bank www.umpquabank.com

Utility Cost Management, LLC www.utilitycostmanagement.com

Liebert Cassidy Whitmore www.lcwlegal.com

Richards Watson Gershon www.rwglaw.com

Enterprise Moves Crews

CSDA Membership includes the value-added benefit of personal and business use car rental through Enterprise, including insurance coverage, free one-way rentals for business use and discounted fuel in California, so staff traveling on business can get where they need to go without stopping to refill the tank or worry of extra charges if they are traveling point-to-point.

Alicea Caccavo, Finance and Administration Manager with Rancho Santa Fe Fire Protection District extolled the virtues of using the membership benefits for Enterprise rental cars at the fire district for sending “single line resources” on deployment. When the district needs to have a single firefighter or small group to lend support in regional fires, Enterprise has made rental efficient and easy for the district. “We’ve used them for years and they have been a huge source of support. They are fantastic about

getting us a truck very quickly to get the fire personnel on their way,” said Caccavo.

“Enterprise is proud to support special district operations and staff throughout California in conjunction with their CSDA membership,” said Program Manager Lisa Holmes.

Brown Armstrong Accountancy Corporation www.bacpas.com

CalTRUST www.caltrust.org

Centrica Business Solutions www.centricabusinesssolutions.com

Chase Bank www.chase.com

Cole Huber LLP www.colehuber.com

Complete Paperless Solutions www.cps247.com

Cooperative Strategies www.coopstrategies.com

Davis Demographics davisdemographics.com

Eide Bailly CPAs www.eidebailly.com

Enterprise Automation www.eaintegrator.com

Kosmont Financial Services www.KosmontFinancial.com

National Demographics Corporation (NDC) www.ndcresearch.com

NBS www.nbsgov.com

Nextdoor, Inc. www.nextdoor.com/ Nossaman, LLP www.nossaman.com

SitelogiQ www.sitelogiq.com

Slovak Baron Empey Murphy & Pinkney LLP www.sbemp.com

Tyler Technologies, Inc. www.tylertech.com

Vasquez & Company LLP www.vasquez.cpa

VC3 www.vc3.com

Witt O'Brien's www.wittobriens.com

District staff traveling on personal time can also experience rate savings and great customer service with the CSDA Endorsed Affiliate membership benefits offered by Enterprise. To get the best rates on your next vacation rental, log into your CSDA membership and enter the Enterprise portal today! https:// csda.net/value-benefits

Money Matters

Understanding Credit Winning the Battle to Stay One Step Ahead

By Taylor Budrow, CFA® - Senior Credit Analyst at Public Trust Advisors, LLC

The primary role of the Public Trust Advisors Credit Team (Credit Team) (California CLASS Investment Advisor and Administrator) is to evaluate the credit profile of investable entities and determine their suitability as counterparties. Simply put, the Credit Team is in a continual, unending battle to stay one step ahead of potential reactions to rating agencies directly and by other market participants. During times of credit deterioration, for example, the Credit Team aims to ensure that they are not caught running for the exits with the rest of the market. This ‘alert readiness’ requires credit analysts to be well-versed in recent company-specific information; understand the everchanging macroeconomic and regulatory environments; and form independent opinions that are not always in line with the prevailing market consensus. To provide better insight into the Credit Team’s processes, we’d like to take a look at our most recent downgrade example, Credit Suisse. Credit Suisse has been one of the most prolific news stories of 2023, as financial analysts and journalists alike spent the first several months of the year expounding on its persistent operational pressures and speculating about its future. Those speculations were put to rest in late

March when the bank was formally sold to a competing Swiss bank, and its existence as an independent financial institution came to a close. To better understand the Credit Suisse story from a credit perspective, it is necessary to look deeper and back much further in time.

Through much of 2021, concerning reports from Credit Suisse were becoming more frequent as the bank was dealing with looming potential losses and ongoing lawsuits. However, these reports were projections, and the outcome would either be material or immaterial to the rating. The bank was supported by a strong capital position as well as a positive operating performance during this time and, as a result, the Credit Team held steady with limits already in place on the purchase of Credit Suisse’s money market instruments. The Credit Team maintains several tools at its disposal to reflect their opinion about the creditworthiness of an entity. Two powerful tools include (a) the ability to limit either the allowable exposure to a certain company as a percentage of total holdings or (b) to limit the allowable duration of money market instruments purchased from that entity by Public Trust. In the Fall of 2021, the tools were ready when needed.

continued on page 50...

In October 2021, the Credit Team lowered the allowable duration of Credit Suisse money market instruments from any (permitted instruments) to only those maturing within 180 days. The tighter restrictions were made in response to questions surrounding the bank’s risk management and internal controls.

Over the next several months, the Credit Team imposed further restrictions on Credit Suisse instruments in response to its CEO departing; management turnover; mounting concerns around risk management practices; and in anticipation of a potential negative rating action at one of the credit rating agencies. By February 2022, limitations had been tightened to the strictest levels that still allowed investment and only permitted investment in Credit Suisse instruments maturing within 60 days, and those collective instruments needed to account for less than 5.00% of Public Trust holdings. Just a few months later in May 2022, the credit rating agencies took negative rating actions to reflect the deteriorating Credit Suisse credit profile. S&P lowered the bank’s credit rating by one notch, and the bank was placed on a negative outlook at Moody’s.

The ability to parse through the “noise” in the market to determine what is both relevant and accurate is among the

primary skills of a credit research analyst. The Credit Team, toolbox at the ready, made the decision to remove Credit Suisse from its approved list in July 2022. Just five days later, the bank’s credit rating was downgraded by one notch at Moody’s and placed on negative outlook at S&P, with similar events unfolding until its eventual sale.

Few credit stories are as severe as the credit deterioration that occurred at Credit Suisse, but it serves as the most recent example of what a Credit Team’s purpose is and how proactive decision-making can assist clients like California CLASS.

All comments and discussion presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information presented should not be used in making any investment decisions. This material is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.

MONEY MATTERS by CSDA Finance Corporation

MCMAD’s New Facility Funded Through CSDA Finance Corporation

Thanks to a $5 million loan facilitated by CSDA Finance Corporation, Monterey County Mosquito Abatement District (MCMAD) was able to construct a state-of-the-art administration and operations facility in Salinas. The new facility features ample storage space for all-terrain vehicles, drones, pesticides, and other essential tools for carrying out the district’s mission. The facility also includes housing for the district’s mosquito fish program. District manager Ken Klemme praised the financing process, noting that it was a seamless and straight forward experience.

CSDA Finance Corporation has helped hundreds of special districts find the financing solutions they need. To learn more, visit csdafinance.net or call 877.924.2732.