Voting Changes on Tap for O.C. Water Board

Gov. Pete Wilson signed an Orange County lawmaker’s bill Monday requiring that directors of the troubled Santa Margarita Water District be elected by popular vote, but the new law won’t change the rules in time for a board race next month.

The measure by Assemblyman Mickey Conroy (R-Orange) will go into effect Jan. 1, meaning candidates will run on Nov. 2 under a system that the lawmaker said makes Santa Margarita the “South Africa” of water districts.

In pushing the bill through the legislative process, Conroy said the district was failing to operate democratically because directors were not elected on the principle of “one man, one vote.” Instead, the district allows landowners to cast a vote for every dollar of assessed land, meaning a homeowner with $100,000 worth of land is entitled to tally 100,000 votes. The Santa Margarita Co., meanwhile, has about 95 million votes.

Conroy argued that the system ensured that the board was more accountable to big developers than to the district’s 26,500 ratepayers.

The voting system came under attack after it was disclosed in The Times that two top managers engaged in lavish spending and took questionable gifts from firms that did business with the water district. The revelations angered many ratepayers and triggered two investigations into possible wrongdoing.

Under Conroy’s bill, which requires that all five spots on the board be up for reelection in November, 1994, each registered voter would cast a single ballot in the race, as in any other political election.

Conroy, who is visiting family on the East Coast, said in a press release that he plans to try to “influence” the race next month by interviewing candidates and making his own recommendations, with an eye toward replacing most of the current board members.

“I intend to interview the new candidates and make recommendations to the landowners on who they elect,” Conroy said in the prepared statement. “The sooner we get new faces on the board, the better.”

Diane Gaynor, a spokeswoman for the Santa Margarita Co., largest landowner in the district, said the company “will be considering (candidate) recommendations from all sources.”

One board member, Richard F. Boultinghouse, was taken aback by Conroy’s suggestion that he would try to replace sitting board members.

“I’m surprised by that, but it’s a free country,” he said.

Following stories last March in The Times, the FBI and the Orange County district attorney’s office began investigating possible conflict-of-interest violations at the water district, including allegations that then-General Manager Walter W. (Bill) Knitz and his deputy, Michael P. Lord, accepted gifts from contractors in excess of state limits.

In addition, the U.S. Securities and Exchange Commission is probing Lord’s management of the district’s $150-million investment portfolio. Knitz and Lord, who both retired in May, have denied any wrongdoing.

In Conroy’s statement, his chief of staff, Pete Conaty, is quoted as saying that the investigation of Knitz and Lord “is just the tip of the iceberg” and extends to current board members and other water district employees.

The district’s acting general manager, Dan Miller, said he is unaware of anyone other than Knitz or Lord being involved.

“From everything we’ve heard, the investigation focuses on those two (Knitz and Lord),” Miller said. “No board members have been interviewed (by law enforcement officials) since late May, early June, and no employee has been contacted here that I’m aware of.”

The district board began re-evaluating its policies this spring. By June, the district adopted a strict ethics code that essentially bans officials from receiving any gifts from vendors, including meals and entertainment, with limited exceptions.

Conroy, however, said his legislation is needed to ensure that district directors are accountable to customers in the district, which serves more than 84,000 people in Rancho Santa Margarita, Mission Viejo, Coto de Caza and unincorporated areas of the county.

Assemblyman Tom Umberg (D-Garden Grove) also introduced a bill designed to cure problems at the water district, but the legislation was shelved in the waning days of the summer session because of a technicality. Umberg has promised to revive the measure, which would toughen reporting requirements for travel and gifts, early next year.

Conroy, meanwhile, already had gotten the governor to sign a bill that converted the Los Alisos Water District to direct election in 1994 for three spots on the five-member board. Previously, the district had also elected its directors based on the assessed value of land.

A record number of eight candidates are challenging the four incumbents on the water district’s board this November. The district has not had a contested election since 1987.

The hopefuls include: Brent R. Beasley, 32, a businessman from Rancho Santa Margarita; Richard William Hintz, 40, a financial clerk from Trabuco Canyon; Bob Lay, 37, a business owner from Mission Viejo; Jim Mizell, 45, a homeowner association president from Mission Viejo; Betty Olson, 46, a water scientist and engineer from Trabuco Canyon; Bill Wachal, 52, a marketing manager from Mission Viejo, and Roger A. Johnson, 40, an environmental engineer from Rancho Santa Margarita.

The eight challengers are running against Boultinghouse, who joined the board in 1980; William F. Krasho, who was elected in 1987; James Neidert, who became a member in 1992, and Sean Barrett, who was selected by other board members this year to fill the vacancy of retiring board member John F. Van Dam.

Board Chairman Don B. Schone, who has served since 1977, is not up for reelection until 1994.

Elections at the water district are unique in that a total of 2.85 billion votes--equivalent to the amount of assessed land value--can be cast. Of that amount, about 185 million votes are in the hands of the district’s largest landowners, including the Santa Margarita Co., Coto de Caza Development Corp., Arvida Corp. and the Mission Viejo Co.