Special thanks to Kathryn Santos-Reed, Don Flesch and the Rio Linda News.
Reprinted here with permission.
The Rio Linda Elverta Community Water District held a special meeting, August 30, 2010. Within less than a minute of saying the Pledge of Allegiance, Board president Mary Harris, with the assistance of district general legal counsel Ravi Mehta, moved Agenda Item 6 until after the planned closed session.
Because these closed sessions can run a long time, many public members will leave and not return; however, there are several public members who have arranged to be telephoned when the open session is recalled. This did not happen on August 30th, even though it was discussed.
The Agenda Item 6 was a discussion of the general counsel’s hourly rate and contract. It is clear now why the item was moved to be heard after the closed session and why no public members received a telephone call to let them know the public portion of the meeting was back in session.
The contract, presented to the district by Ravi Mehta and voted on by the directors to be accepted, is one which will create numerous problems for this board of directors and for future directors as well.
The contract raises Mehta’s hourly rate from $250 hrly. to $305 hrly. and runs through June 30, 2014. The contract may be reviewed and the rate increased on July 1st of each year. Additionally, Mehta wrote into the contract “District is desirous of seeking and obtaining grants, loans and other funding from federal and state sources. District recognizes that Attorney has special expertise, skills, experience and resources in this regard and wants Attorney to assist with seeking and obtaining funds for District Capital Improvements and other projects that will benefit the District. In order to minimize its costs, District does not wish to pay Attorney an hourly rate for this service, and in consideration of forgoing an hourly rate and taking a substantial risk due to the fact that grants, loans or other funding may not be available or the District may not be awarded such funds despite significant time and efforts put forth by Attorney, District will compensate Attorney for such services by awarding a commission of 30% of all funds obtained by District due to the direct or indirect assistance of Attorney.â€
Could an attempt to profit from the State Revolving Fund Loans be more clear? This attorney has only worked for the water district since March 2010, but he has managed to bill the district approximately $83,000 in legal fees. Contact was made with the California Department of Public Health and they will not fund the loan to the water district until the terms of this contract have been revised.
What were the board of directors thinking when they voted to accept this contract?
This contract contains a cancellation clause giving Mehta an early termination clause of $75,000 per year OR the equivalent of the total monthly billing for the previous 12 month period prior to cancellation of the contract. As Mehta has billed an approximate $83,000 over the previous six month period, $75,000 would be unlikely as a buy out amount of his contract. It could run closer to $166,000 at his current rate.
The Rio Linda Elverta Community Water District is cash strapped and operating at less than needed to secure the State loans for the necessary wells. The District will need to put through a rate increase before the first of the coming year to secure the loans, but you can be certain it won’t happen before the election. A contract for legal services such as presented are beyond the District’s finances and should not be signed by the board of directors.
