Other O.C. Water Boards Rethinking Ethics Policies : Public trust: Santa Margarita revelations suddenly cast doubts on practices they’ve always followed.

Leaders of the Tri-Cities Municipal Water District recently began to wonder aloud if having part-time General Manager Ramon D. Woodside also oversee the district’s engineering work might constitute a conflict of interest.

After all, they reasoned, someone could argue that Woodside has tremendous discretion over the amount of work the district gives to Barrett Consulting Group, the Tustin engineering company where he also works as vice president. As water district general manager, Woodside can make recommendations to the five-member board that benefit his firm.

Now the board is leaning toward restructuring Woodside’s duties and putting its engineering work out for competitive bid.

“I’m not sure we can continue to do business the same way we did in 1959” when the district was created, board President Lawrence James Lawson said Tuesday. “Our engineering work has been good but the perception is that the person who is advising the board is doing the engineering, and is that proper? In today’s climate, that’s a legitimate question.”

Today’s climate is one in which leaders of almost every Orange County water district are questioning their rules and regulations in light of disclosures that two managers of the Santa Margarita Water District charged ratepayers for tens of thousands of dollars in questionable expenses and accepted expensive gifts from firms that won district business.

From per-diem limits on out-of-town dinners to whether consultants can pick up lunch for staff members, water districts are looking inward at business practices that haven’t changed in years.

“Why not take a look?” asked Alexander Bowie, a Newport Beach attorney whose law firm represents several of the county’s 17 water districts. “It’s appropriate for every water district, whether they have guidelines or not, to pull them out and take a look. Everyone should be reviewing what they have in place.”

Some of the water agencies have no rules whatsoever governing the amount of money a staff member or board member may spend on a business-related meal or under what circumstances meals can be charged to the district. Other agencies are trying to determine whether they have properly reported gifts received by contractors and consultants.

At their April 20 meeting, Santiago County Water District directors are scheduled to consider guidelines for employees who file expenses and accept gifts. Although the board must give prior approval for all out-of-town and in-county expenses, the regulations are less clear about how much a board member or staff member may pay for meals.

As it now happens, a consultant may pay for a staff member’s lunch, for example. The board might discuss whether to prohibit outsiders from paying for lunch altogether, district officials said.

“In light of what has occurred at the Santa Margarita Water District, we need to determine whether or not to rewrite our guidelines,” said Charlie Cron, the general manager of the Santiago County Water District for the past 18 years.

The Santa Margarita district, faced with disclosures in The Times that General Manager Walter W. (Bill) Knitz and his assistant, Michael P. Lord, used district funds for car detailing, sheepskin seat covers, expensive hotel rooms and even a limousine ride around Manhattan, have suspended both men with pay and cut off their spending privileges.

Both will also be unable to authorize contracts or use their district cars. The Orange County district attorney’s office and FBI are conducting a joint investigation into whether Knitz and Lord used their influence to recommend contracts to companies that gave them thousands of dollars in meals, trips, tickets and other items.

Knitz and Lord have strongly denied any impropriety.

News reports about the expenses prompted Lloyd Woerner, a board member of the South East Regional Reclamation Authority, to ask last week that the agency draw up its first-ever guidelines for business expenses. Knitz is a board member of SERRA, which oversees waste water treatment in south Orange County.

The Times reported Saturday that William P. Becker, SERRA’s general manager, spent $18,460 between August, 1991, and February of this year. Becker said the expenses, most of which included meals and travel, were a reasonable cost of doing business.

The recent spate of publicity about various water districts has been the talk of the industry, said Peer Swan, the longtime president of the Irvine Ranch Water District, a sprawling agency that covers not only Irvine but parts of Newport Beach, Lake Forest and Laguna Beach.

“The (articles) have gotten the industry’s attention, absolutely,” Swan said. “The people who need to are tightening up and they should be. I think we have been lucky we have straight shooters in our district.”

In light of the recent headlines, Swan said he will recommend that his district institute a new policy for the approval of all expenditures generated by the district general manager and director of finance. If accepted by the rest of the board, the new policy would require that directors on the district’s finance committee approve the managers’ expenses, rather than have the managers approve each other’s expenses, as is done now.

“It’s not that I think anyone has abused this procedure, but I think it’s just something we should do on a periodic basis,” Swan said.

Swan said his district often reacts to news reports of abuses in other public agencies by checking their own procedures. For instance, when the top financial officer of the Newport-Mesa Unified School District was found last fall to have embezzled nearly $4 million in district funds, the IRWD had an audit done to check their own financial controls, Swan said.

“It’s a topical thing,” Swan said. “You try and learn from other people’s mistakes.”

Another water district may make it easier for the public to attend meetings, which are held during the day. Water agencies often are criticized for operating in relative obscurity anyway, and daytime meetings make it that much more difficult for the public to get involved, said Ronald E. Kennedy, a former director and now general manager of the El Toro Water District.

“I think that’s something we should consider, meeting when it would be more convenient to the public,” said Kennedy, whose board now meets during business hours on the third Thursday of each month. “Water boards have never considered access to the public to be an issue, but clearly this is changing. I think this would be an appropriate time to shift the meetings to off hours, perhaps at nighttime.”