The Public Eye

The Public Eye: Rio Linda-Elverta water district paid settlement to fired bookkeeper

Published: Saturday, Nov. 3, 2012 - 11:00 pm | Page 1B
Last Modified: Sunday, Nov. 4, 2012 - 8:25 am

The Rio Linda-Elverta Community Water District has paid a $30,000 legal settlement to a former bookkeeper whom the district accused of embezzling funds.

A former general manager terminated Elizabeth Myers after receiving a report from the district's auditor saying that Myers had used a district credit card for personal expenses, including trips to South Africa and Hawaii.

Myers sued the district in federal court, saying an unknown person at the district had violated her rights by releasing the report to The Bee, which ran a story about it last year.

The Bee was unable to reach Myers this week to comment on the settlement. However, when the allegations first surfaced, her husband told the newspaper that she paid the district back for all of the charges she had made on the district's credit card.

Board member Cathy Hood said no one on the board wanted to settle with Myers. The only reason board members agreed to the settlement was to save on legal fees, which have been running high in the contentious district.

Its insurer recently pulled the water district's "employee practices" coverage, citing the district's legal troubles. Two previous general managers also have sued the district in recent years.

The current general manager, Mary Henrici, confirmed that the water district settled with Myers in July. She declined to discuss the reasons because they came up during a closed board session.

Myers' attorney, Joseph Maloney, said he couldn't comment because the settlement agreement said the parties were not supposed to discuss it.

Concern about legal fees paid to the water district's retained counsel, Ravi Mehta, prompted the settlement with Myers, Hood said.

"Everyone was complaining about Ravi's fees. No one wanted to settle" with Myers, Hood said.

In the past two years, the water district has paid Mehta almost $1 million for legal work, records show. That works out to roughly one-quarter of the district's operating costs.

The district paid Mehta additional money to serve as its temporary general manager.

Mehta has said his expenses are a reflection of all the discord and legal activity at the water district. But some board members have said that he bills for work that doesn't need to be done by him, and that his $305-an-hour rate is too high.

Had Myers' case continued much longer in U.S. District Court, the water district could easily have paid considerably more on Mehta's fees than it spent on Myers' settlement.

From October 2011 through April of this year, Mehta billed the district $51,000 for his work on the Myers case.

He has billed the district for work on the Myers case and other cases by former employees, even though the insurer has paid other attorneys to defend the district. Mehta said he has had to assist the other lawyers in the cases.

In June, board member Gerald Trautman sought to remove Mehta as the district's general counsel. He has said the struggling water district can't afford Mehta's bills.

The board voted 3-2 against the motion, with Hood backing Trautman. Other board members have expressed frustration with Mehta's contract, which would require them to pay him the same amount he made in the last year as severance.

Hood said the water district could curb legal costs if the board operated with more civility. She said former General Manager Joe Sherrill sued the district after the board dismissed him.

But Hood said it's not always easy to keep calm at board meetings.

"Sometimes my temper comes out," she said.

The water district could have a new board after Tuesday's election. Four of the five director seats are contested. Hood and Vivien Spicer-Johnson are the only incumbents seeking re-election.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Brad Branan

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