Water District Chief Staying on Job After All : Utilities: After saying he would take private job, Santa Margarita’s Schatz sticks with troubled agency.

The general manager of the Santa Margarita Water District, who told his board of directors March 16 that he would be leaving to work for a Riverside County developer, has decided to stay with the district after all.

In a letter to all employees dated March 24, John J. Schatz said he would be staying despite “a financially significant offer of employment in the private sector.”

Schatz said that despite the “attractiveness of the offer” as manager of Cox-West Properties in Riverside County, he would remain in charge of the South County water district.

“I believe this commitment is particularly important to the employees and the organization as we continue to emerge from, and move past, the events of last year,” Schatz said.

The district has been embroiled in a scandal involving conflict-of-interest allegations against several employees, including its two former managers, who were indicted last week on criminal charges of failing to disclose gifts from companies they helped recommend for lucrative contracts.

A former board chairman and the district’s current chief engineer are still under investigation, officials said.

Board member Betty Olson said she was gratified that Schatz was staying.

“My only comment is that it certainly helps the continuity of the district not to have to replace the general manager after such a short period of time,” she said.

Schatz did not return several calls for comment.