Water District Official’s Tips Lead to Inquiry : Government: D.A. is investigating director’s claims of mismanagement, improper spending at Capistrano Beach agency.

The Orange County district attorney’s office is investigating allegations of mismanagement and improper spending of public funds at the Capistrano Beach Water District.

The probe, which was confirmed by district attorney and water district officials, is based on claims made by an elected member of the district’s board, Director Bonnie Rae Streeter.

Streeter alleges that the district’s former general manager and one of her colleagues on the board purchased personal items with district funds, although the money was later repaid to the district. Another director, Streeter contends, falsified insurance forms and collected refunds.

The personal items range from a $250 filing cabinet to $3,200 in computer equipment, according to Streeter. In all, at least $6,000 in district funds were allegedly misappropriated, she said.

“There has been a pattern of misusing public funds and other illegal activities,” Streeter, a three-year board member, stated in a letter earlier this year to the district attorney requesting an investigation.

An official from the district attorney’s office acknowledged this week that an investigation was underway.

“I can confirm there is an investigation concerning the Capistrano Beach Water District,” Deputy Dist. Atty. Sheila Hanson said. “It is something that is being actively pursued. . . . Beyond that, I’m not inclined to discuss the investigation or the nature of the allegations.”

Steven DeBaun, an attorney for the South County water and sewer district, said the probe is based on Streeter’s charges.

“The DA did contact us about an investigation, not of the district, but of some individuals,” DeBaun said. “I don’t want to get into the particulars. . . . That is something for the DA’s office to do. . . . I have been told that it is based on the complaint by Bonnie Streeter.”

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All three of the people Streeter has accused of wrongdoing--Director William Morison, former General Manager Benton Price and Director Donald Simpkin--have denied her charges.

Morison said the allegations are “bogus” and part of a personal vendetta Streeter has waged since a board majority fired a district employee she liked. “I feel secure that the investigators will come up with nothing,” he said.

Said Price: “I’m not sure these charges even warrant a response.”

Both Morison and Price say they have not been contacted by investigators.

The Capistrano Beach Water District was created in January, when the 66-year-old Capistrano Beach Sanitary District merged with the Capistrano Beach County Water District.

The two five-member boards of directors now make up a 10-member board for the district, which has about 5,200 customers in the Capistrano Beach area of Dana Point, throughout Dana Point Harbor and in small parts of San Clemente. The district’s annual operating budget is $6.3 million.

Streeter contends that Price, a consultant who was general manager of the sewer district in 1992-93, purchased $3,200 of computer equipment for his personal use with district funds and reimbursed the district only after staff refused to pay the bill.

She also alleged that Price billed the district an unspecified amount for work performed, even though he was on vacation in Europe. He denied the allegation.

While Morison and Price say they have not been interviewed by the district attorney’s office. Grace Harwell, who was bookkeeper for the district for 10 years before retiring two years ago, said she was interviewed within the past two weeks.

She said investigators asked her about Price’s purchase of a computer, which she said he had delivered to his home, and the work charged to the district while Price was on vacation.

“They were particularly concerned about the computer purchases,” Harwell said.

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Morison, who has served as a director of the sewer district for five years, was singled out by Streeter for allegedly ordering the district staff to buy a file cabinet for his home and paying for it later, when the district staff raised questions.

Streeter said Morison also approved Price’s pay invoices for the time he was in Europe and withheld documents regarding Price’s pay when they were questioned by a local resident.

Another of Streeter’s charges is that her colleague Simpkin was unjustly given a $1,270 refund from the district for medical insurance that covered district employees. Simpkin acknowledged that he received the refund but that it was because “an error in accounting” and that he overpaid his premium.

Simpkin, a director of the sewer district for 16 years, called Streeter’s charges “unfounded.”

“There is no reason at all for them,” he said.