Placer County grand jury doubles down on city of Lincoln’s financial missteps

A Placer County grand jury report found the city of Lincoln mismanaged public funds and overcharged residents, echoing findings from a scathing state audit report released two months ago.

Lincoln ignored governing regulations related to water rate-setting, overcharging developers and homeowners, and collecting nearly $41 million in excess in a water connections fund, according to the Wednesday grand jury report. The city “repeatedly failed to conduct required nexus studies to determine reasonable costs” to charge, the report found.

The city also loaned money from the water connections fund to separate accounts “with no assurances that the funds receiving the loans will be capable of repayment,” according to the report, breaking the city’s interfund loan policy.

The grand jury report rehashes some of the extensive concerns raised by the California State Auditor’s office in March, which concluded that years of financial mismanagement “threaten the city’s stability.”

“It’s nothing surprising,” said Lincoln City Manager Jennifer Hanson. The city is “already working” to address concerns issued in the state audit, she said, including overhauling its accounting practices and oversight process.

The grand jury report recommended the city refund residents and developers for overcharges related to its water connections fund.

Whether the city will issue refunds will be determined by the Lincoln City Council, Hanson said, after reviewing a new fees and rates nexus study, which is set to be released by a third-party consultant in June.

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Alexandra Yoon-Hendricks covers Sacramento County and the cities and suburbs beyond the capital. She’s previously worked at The New York Times and NPR, and is a former Bee intern. She graduated from UC Berkeley, where she was the managing editor of The Daily Californian.
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