Government / Politics

Second Tres Pinos Water District director resigns, accuses board of mismanagement

Having served six months after being appointed, Mike Howard resigns, following the path of his predecessor

For the second time in six months, a Tres Pinos Water District board member has resigned. Mike Howard, whom the county board of supervisors appointed in Oct. 2016 to replace Mike Sargeant. Sargeant had left the post under a cloud of accusations after serving just one year.

Howard’s appointment was not without its own rancor, when Mary Ann Hughes, a member of the water district’s finance committee, challenged it. She said that even though Howard has owned and operated The Inn at Tres Pinos for 26 years, the fact that he did not actually reside in the town should disqualify him from being on the board.

During the supervisors' meeting of Oct. 25, 2016, Hollister resident Marty Richman warned the supervisors that an appointment would not solve the water district’s problems because of its dysfunctional issues. It would seem that after just six months, Howard agreed with Richman as he faced the supervisors again—minus retired supervisor Margie Barrios, who originally nominated him. Howard appeared on April 25 to officially resign and read a lengthy statement outlining his grievances and claims of mismanagement against the water district. He had notified the water district board members of his departure the previous week.

Howard said that it was his duty to report his observations to the supervisors as a board member and long-time customer of the water district. His complaints were wide-ranging, from it not have a website or any other means for the public to determine when meetings are conducted, to how or why it made decisions that affected its customers. A call to the district found that three days prior to meetings, notices are posted in three locations in town. Howard claimed further that there was no attempt to ensure proper record-keeping or the ability to reference ordinances or resolutions.

“Access to information is limited to what you are told at the meetings with very little documentation to support it,” he said. Howard suggested that he was being purposely denied access even from the district’s building. “For six months, I was never issued keys, although requested on several occasions. This felt odd because all other directors had keys, as well as several long-term volunteers.”

Howard claimed the “old-guard mentality” discouraged new ideas and ruled through intimidation. He said that it was dysfunctional and had no clear vision.

“This group has operated with no budget,” he charged. “There is no long-term capital plan; there is no preventative maintenance plan. This group operated without directors’ insurance because no insurance company would cover them.”

Howard claimed there was a 20-year, self-imposed improvement moratorium and that water rates for the 115 mostly low-income customers have increased some 90 percent. He made the accusation that late fees and property liens comprised the largest part of the district’s income and that it would be detrimental to the district if customers actually paid their water bills on time.

“The majority of operating revenue is from state and federal grants,” he said. “If these agencies were aware of the financial committees’ incapability of preparing a budget, would they have issued these grants? It is a fact that this organization is non-compliant regarding generally accepted accounting principles.”

In addition to claiming the district is untrustworthy regarding its financial statements, Howard said the district's water delivery infrastructure is antiquated, though manageable. He further stated there is no preventative maintenance plan or long-term capital plan, which he said he discussed with the hired engineer and claimed the board president, Edward Schmidt, told the engineer not to answer his questions.

“At the February board meeting I asked why,” Howard said. “I was told my questions would cost too much money to answer. We pay them over $40,000 a year; you’d think they could answer a few questions from a new director.”

Howard did offer a few suggestions about how to improve the situation by either combining with the Stonegate residential area just north of Tres Pinos for shared revenue or melding it into Sunnyslope Water District. He said an additional water tank could be built, which would double the water storage capacity. He further suggested that the county board of supervisors or the Regional Water Quality Board in San Luis Obispo step in and take charge. He also asked to whom the Tres Pinos Water District Board answers.

Howard finished his statement by claiming that he resigned because he and his family had been threatened, though he did not give any specifics.

“Opinions are entitled and I respect that,” he concluded, “but bullying and close-mindedness are intolerable. I was not elected to this position. I was appointed by you. It is my intention to bring this to your attention and is [in] no way to undermine my peers, but to bring light to a very obvious dysfunctional entity.”

The board offered no response at the time, nor did it publicly advise staff to act on Howard’s comments.

District 4 Supervisor Jerry Muenzer, who represents Tres Pinos, said on May 1 that he had not read Howard’s written statement in its entirety. He would not comment on any of the specific accusations, stating that his view has always been that the water district is being run by an elected board of directors that is answerable to its members. Other than Schmidt, he wasn’t sure who the current board members were. The county clerk’s office identified the board as Edward Schmidt, who is president, Jason Finstad, Mary Ann Hughes and Cassandra Spencer.

“Being dully elected, the board of supervisors do not oversee it, at all,” Munezer said. “They are answerable to their constituents, which are the residents of Tres Pinos.”

The supervisor has said this before and Richman indicated last October that this was not true.

“We’ve got to straighten this out and I will point again to the General Plan that says when there is a critical utility that’s not getting fixed, the county shall jump in and work with that board to get it solved,” he said.

Muenzer confirmed what Shawn Novack, from the Water Resources Association of San Benito County, said that neither the association nor the county water district were responsible for the Tres Pinos Water District’s operations, though he did say he believed it did answer to the regional water quality board in Santa Barbara. In fact, San Benito County comes under the jurisdiction of the Central Coast Regional Water Control Board, District 3.

Even though he said the board is not answerable to the county, Muenzer said the supervisors appointed Howard because the district water board could not come up with a majority vote in order to appoint Sargeant’s replacement. He compared the situation to what Hollister just went through in appointing Jim Gillio as a city councilman, rather than hold a special election.

“They (water district) could not afford a special election, so they chose to ask the board of supervisors to make an appointment,” Muenzer said. “That was one of their options under state law. We have no say in how they run their day-to-day business.”

Former supervisor Margie Barrios, Muenzer said, had wanted the water district to report to the board of supervisors, but he did not think it was a proper course of action.

Conflicts are not new with the water district. Local resident and landowner John Eade has come to a loggerhead with the district on two separate occasions since 2005; once when he attempted to construct a 44-room hotel, and when that failed to pass, a 21-home subdivision in 2013.  Eade claimed then that Schmidt, in his role as a trustee for the Tres Pinos School District, engaged in several discussions in order to influence other trustees’ decisions regarding his property.

In a Dec. 2015 article in the Free Lance, Christine Breen, the attorney who represents the district, said it has only 110 customers and is designated as a “disadvantaged community” because most users are renters with “very low socioeconomic” backgrounds.

What was not mentioned, though, was the socioeconomic standing of those who actually own the homes and if they were capable of paying for improvements. Breen also pointed out that the district is served by a single well, dug in the early 1960s. She also said the district is “perennially” out of compliance with regional wastewater quality control board standards and that its equipment is old.

“Because of the size and the socioeconomic makeup of the district, making any capital improvements to infrastructure has been extremely challenging,” Breen said in the article, adding how the district raised rates in 2014, but the revenue doesn’t go far with so few customers.

Calls to Schmidt, Breen and the Regional Water Quality Board in San Luis Obispo were not returned as of publication time.

John Chadwell

John Chadwell is a freelance photojournalist with additional experience as a copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]