MISSION VIEJO : Water Board Picks General Manager

Seven months after its general manager was relieved of his duties and then retired under the cloud of a criminal investigation, the Santa Margarita Water District’s board of directors has picked the head of a tiny water and sewer district in western Riverside County to replace him.

After culling through 138 applications, the board selected John J. Schatz, 39, the general manager and attorney for the Jurupa Community Services District, which provides water and sewer service to a population of 40,000.

The Santa Margarita board decided to offer the position to Schatz last Thursday, and Schatz informed his bosses Monday night that he was resigning. The South County district announced his hiring Wednesday.

Schatz replaces Walter W. (Bill) Knitz, who left his job in May along with his assistant general manager, Michael P. Lord, after a series of articles in The Times prompted a criminal investigation of possible conflict-of-interest law violations.

The investigation, being conducted by the county district attorney’s office and the FBI, is still continuing and is expected to last until the end of the year.

With a law degree and undergraduate degree in business, Schatz was chosen for his broad knowledge of water issues, the law and finance.

“He seemed to have very good, strong leadership qualities,” said Dan Miller, the district’s acting general manager. “He is thought of very highly within the water industry.”

The board chose Schatz over Diana Leach, the assistant general manager of the Chino Hills Municipal Water Basin.

Schatz comes to the troubled Santa Margarita Water District amid criticism that he has been a domineering, developer-friendly manager who fought bitterly--and successfully--against efforts by grass-roots organizers to create a city in Jurupa, which would have absorbed his district.

Schatz has also been at the forefront of efforts to build a $20-million desalination plant, which community activists say will make dairy farmland more valuable to developers.

“My gut feeling is that he is very friendly with developers,” said Curtis Hummel, a member of the Jurupa Community Services District board and a Los Angeles County firefighter. “He has led an effort to provide as much development as any developer would want.”

Hummel also said that though he respects Schatz, the manager sometimes tries to run the board, rather than take direction from board members.

“Sometimes he leads the board and tends to give you information as he feels you need to have it,” Hummel said. “He’s very aggressive in pursuing things that are important to him, and he’ll definitely let you know when you are angering him.”

Schatz said that Hummel is his lone critic on the five-member Jurupa board and that he has followed the direction of the four others.

“You have to remember, different members have different agendas,” Schatz said. “I march to the tune of the majority. It’s not possible to please everyone at once.”

Schatz’s salary will be near the $113,292 that Knitz was making at the time he retired but will not include the annuities that the former board had approved for Knitz. Schatz was earning $105,000. He is to start work Jan. 17.