As schools, cities and counties throughout California lay off workers and cut basic services to close historic budget gaps, a little-known mosquito control agency based in Sonoma County is awash with cash.
The Marin/Sonoma Mosquito and Vector Control District started the budget year with more than $10 million in the bank. That figure far exceeds its annual operating budget of about $7 million, which is covered by the amount the district brings in each year in property taxes.
Remarkably, the size of the district's surplus grew by 50 percent during the economic downturn. In 2006, the district listed $6.7 million in unrestricted net assets.
The district is one of more than 50 mosquito and vector control districts statewide created to stop the spread of diseases borne by such pests as mosquitoes and ticks. A homeowner pays on average about $20 a year in property taxes to fund the agency, which is one of a growing number of little-noticed special districts that are coming under increasing scrutiny.
The districts operate with scant financial oversight, an issue that has prompted board members and critics to question the way districts spend taxpayer money, and which the state controller is tackling through legislation and increased reporting on a website.
Jim Wanderscheid, general manager of the Marin/Sonoma Mosquito and Vector Control District, said the $10 million is not a surplus. About $3.2 million is set aside to temporarily fund operations while the agency awaits its bi-annual property tax collections and about $3 million is earmarked for capital improvement projects, he said.
But Craig Hartzheim, a partner at the firm Moss, Levy & Hartzheim, LLP, which prepared the district's annual financial report, said the district has a $10 million surplus.
"If you're talking about all mosquito abatement districts, I don't think it's very unusual," Hartzheim said about the district's surplus. "If you are a school district, they usually have between 3 and 8 percent of their budgets saved as reserve. Cities have about 8 to 10 percent."
The Sonoma-Marin district's cash stockpile amounts to about 140 percent of its operating budget.
By comparison, Petaluma has an annual budget of about $32 million, faces a potential deficit next year of $4 million and has a reserve of about $240,000.
"Since I've been here, we've had a surplus each year," Wanderscheid said. "One of the reasons we have an excess is because we are conservative. We don't go out and buy something we don't need."
Not everyone on the district's board thinks its spending habits are conservative.
Board member Frank Egger, who served on the Fairfax City Council for about 40 years, questioned the generosity of early retirement packages for two employees that the board approved last month. The agreements boosted pension benefits for the retirees and cost the district an estimated $142,000.
Wanderscheid said the packages save the district money because the retiring employees wouldn't immediately be replaced. However, one full-time employee's responsibilities will be handled by a contractor.
Wanderscheid's proposed retirement package also was challenged because it included a payout of 100 percent of his unused sick days, which some board members said was too generous. In the end, that benefit was reduced.
"You spend money that you wouldn't normally spend if you didn't have a huge surplus," Egger said. "That's the problem. They don't know what to do with the money."