State Accuses Santa Clarita Water Co. of Wasteful Spending

Alleging that the Santa Clarita Water Co. squandered money on high pay and phantom employees, state utilities officials have recommended that the company be ordered to cut prices 20% to compensate its customers, according to an internal PUC report.

The PUC’s Office of Rate Payers Advocates said the water company, which serves about 20,000 customers in the Canyon Country and Saugus areas, pays exorbitant salaries and benefits, and some employees have “no-show” jobs.

The internal report, a copy of which the PUC provided to The Times, alleged that four employees live outside the area, are “not actively engaged” in the company’s operation and are “rarely if ever present at Santa Clarita’s office.” The four earn a combined annual salary of $170,000 and are provided with a company car to use whenever they are in town, the report said.

The company said the four were consultants on legal, tax and operational matters, but those services were already provided by other employees for far less money, the report said.

“The commission will not allow the proverbial gold-plated costs, such as luxury cars, to be reflected in ratepayer rates,” the report said.

The water company pays higher salaries than other utilities its size, including payments for pensions, medical and life insurance, the report said. Although similar companies usually pay their presidents about $90,000 a year, Santa Clarita Water requested permission to pay its president, William J. Manetta, $137,300 next year and buy him a $40,000 company car, the report said.

Manetta did not return phone calls for comment.

The allegations were contained in a report last month by the advocates office to an administrative law judge, Orville Wright, who will hold a hearing in Los Angeles on Dec. 17 on the water company’s rates and report back to the PUC, which regulates private utility companies.

A 20% reduction would cut the average customer’s bill from $57 every two months to about $44.

The case began when the water company, which has not raised rates since 1982, asked the PUC last year for permission to increase prices beginning next year, under a four-year plan that would almost double the cost of water by 2001.

In spring 1995, 61 of the water company’s customers filed a complaint with the PUC, challenging the rate increase request on the grounds that they were being overcharged.

For 13 years, the PUC has authorized the water company to earn a 13% rate of return, but the company has never made less than 14.5% and in 1989 cleared 23.36%, the report said.