A report prepared by an accounting firm concludes that the DuPage Water Commission has made “significant changes to improve financial oversight and internal controls” since the agency was revamped after squandering tens of millions of dollars in reserve cash.
Still, there's additional work ahead for the commission, which is responsible for supplying more than two dozen municipalities and agencies with Lake Michigan water.
Crowe Horwath LLP has provided a list of recommendations that include continued monitoring of the commission's finances, updating its ethics policy and increasing transparency and accountability.
The agency also must wean itself off a quarter-cent sales tax that's mandated by the state for elimination by 2016.
“Two years ago, the DuPage Water Commission was in crisis,” DuPage County Board Chairman Dan Cronin said.
“The water commission has made a remarkable turnaround,” Cronin added. “This represents how an embattled public agency can be reformed — and quickly reformed — in order to serve the best interest of the taxpayers.”
The findings released Wednesday are part of a series of reports Crowe Horwath is preparing for the county. The consultants are examining two dozen DuPage agencies, which account for nearly $300 million in public funding.
Cronin last year called for the assessment of the independent agencies after separate financial scandals involving the water commission and DuPage Housing Authority.
In the case of the water commission, the agency accidentally spent its $69 million reserve fund through poor accounting practices and lackadaisical financial oversight. The Crowe Horwath consultants said the commission in 2007 decided to approve a $40 million rebate to its charter customers and a water rate reduction based on staff reports that overstated the amount of unrestricted cash available.
While the water commission fired its financial administrator and forced the agency's longtime general manager to resign after the scandal, legislation that Cronin pushed for as a state lawmaker required the resignation of all 13 members of the panel that oversees the agency. That state law also ends the quarter-cent sales tax that goes to the commission on June 1, 2016.
Crowe Horwath's analysis shows the restructured commission is taking the necessary steps to better operate as a utility by adopting a rate schedule that addresses increases from Chicago for the purchase of water, in addition to the elimination of the sales tax and the paying off the debt in 2016.
“I know the commission is going in the right direction,” said John Spatz, the commission's general manager.
In addition to recommending that the commission continue to “monitor cash flow and evaluate financial results,” the consultants say the agency should proceed with planned improvements continue to its website.
“Increasing transparency through increased communication and ease of obtaining information allows for a higher level of accountability and sets a formal expectation of the conduct of appointed board and commission members as well as any employees on staff,” according to the report.
The report also suggests the commission more fully align its ethics policy with DuPage's policy. For example, the commission should require ethics training and have contractors with contracts greater than $25,000 disclose their campaign contributions. Commissioners also should be prohibited from soliciting or accepting more than $1,000 a year in campaign contributions from any contractor, union, vendor, PAC or lobbyist, the report suggests.
Water commission officials agree there is still a lot of work to do.
“We're doing so much, but we know we need to do more,” said Jim Zay, chairman of the commission. “We're working on ethics, procurement and all of those other policies that were brought up. We know it's there. We're getting to it.”
When all the Crowe Horwath reports are completed, officials will consider ways to improve efficiency, streamline operations, share services and increase transparency. Cronin has said there also might be ways to consolidate or eliminate agencies. In reports released last month, the consultants examined a street lighting district near Naperville, two mosquito abatement districts in West Chicago and Wheaton, the DuPage Board of Health and the DuPage Fair and Exposition Authority.Copyright © 2014 Paddock Publications, Inc. All rights reserved.