Dec. 18, 2007 — Three new members may take seats on the Lassen Municipal Utilities District Board of Directors on Thursday, Dec. 27. The Lassen County Board of Supervisors voted unanimously to interview applicants for the three vacant LMUD board seats at an open public meeting at 6 p.m. on Dec. 27 in Jensen Hall at the Lassen County Fairgrounds.

The supervisors voted to accept applications for the three seats until 5 p.m. on Friday, Dec. 21. Applications must be turned into the county clerk’s office at the Lassen County Courthouse.

At Jensen Hall, the board of supervisors will interview all applicants or pick the top candidates to interview during the Dec. 27 meeting. Applicants must be registered voters and live in LMUD Wards 2, 4 or 5 to apply for a seat.

Those interested in applying may simply write letters expressing interest and detailing whatever background and qualifications they have, the members of the board of supervisors agreed.

The vacancies were created by the Oct. 26 resignations of Ward 2 LMUD Director George Sargent and Ward 5 Director Nancy Cardenas and the Dec. 3 resignation of Ward 4 Director Darrell Wood.

Wood’s resignation left the LMUD board one member short of the three members needed for the quorum legally necessary to conduct business.

The state Public Utilities Code gives the board of supervisors the authority to fill all three vacant positions, according to a memo County Counsel Craig Settlemire’s wrote. The memo said the board has 90 days to fill the vacancies by appointment or order LMUD to call a special election. If the supervisors don’t fill the vacancies, the law requires a special election.

LMUD General Manager Frank Cady urged the supervisors to appoint one member to the LMUD board giving it the quorum needed to vote on agenda items. Cady said the utility needed to get back to business immediately.

He claimed at the supervisors’ Tuesday, Dec. 12 meeting the delay was costing ratepayers money.

“For example, Dec. 7 was the drop-dead date to acquire $1.5 million worth of transformers for $80,000,” Cady said.

The transformers were used and needed to be adjusted, Cady said.

“They may have had to be rewound which would have cost $600,000,” he said. “But now that opportunity has passed and the new transformers that LMUD will need will now cost $1.5 million. Those are the types of decisions that the board needs a quorum — at least a quorum — to make.”

Cady also said the ratepayers paid for the election of inexperienced board members after the recall of March 2002. Four LMUD board members were recalled in response to the utility’s announcement of a 40 percent rate hike.

“When you get a new quorum in that does not have this you lose five years worth of experience,” he said. “That five year’s worth of experience has cost the ratepayers two to three cents in not taking advantage of available long-term power supply contracts and other projects that were available at the time that the board wasn’t comfortable in getting involved in because they didn’t know enough about it.”

Cady cited the Idaho Arrowrock Hydroelectric project, saying an Oregon city has contracted with the irrigation districts near Boise to construct the project. Once construction bonds are paid off, Cady said the hydro project will provide power for about one-half cent per kilowatt hour, lower than any of LMUD’s current contracts to receive power.

“If you appoint ... a board that needs to be brought up to speed, we will probably miss out on a number of these items,” he said.

Since he became manager in 2000, Cady said the district is more open and transparent, has more diversified power supply contracts and has moved from the fifth highest utility rates in California to the 10th highest rates.

Ag rates
“I know all the ag people want lower power rates,” Cady said. “It doesn’t happen and it ain’t gonna happen. You saw what happened last time. It didn’t go down; it went up and it’s going to go up again if you do the same thing.”

District 5 Supervisor Jack Hanson objected to Cady’s reference to agriculture rates going up.

“I almost took that as a threat, to be honest with you, and I don’t appreciate it,” Hanson said.

Hanson and the other four members of the board of supervisors agreed they should appoint three new members to the LMUD board. They spoke of overwhelming public lobbying on the issue.

District 3 Supervisor Lloyd Keefer said the LMUD appointments produced the most public interest he’s ever seen in the time he’s served on the board of supervisors. More members of the public have commented than all other issues combined, including the Dyer Mountain Four Season Resort, he said.

Keefer said he’s had more phone calls than he can ever remember and one person flagged him down on the street.

“Saturday morning, a guy sees me drive down to the store, so he follows me all the way to the store to make sure that he was able to express his concerns about the issue,” Keefer said.

The one common thread through all the public comments was “the public wants us to appoint all three,” he said. Keefer suggested accepting the seven existing applications, taking new applications for two weeks and holding a special meeting to make the appointments.

“I had one individual last week who called and indicated that since this board was going to be making the appointments that they would submit an application,” Keefer said, adding the board received an additional application the day of the Dec. 12 meeting.

He added a special election would cost between $30,000 - $60,000.

“I think we need a clean slate,” said District 1 Supervisor Bob Pyle, adding all three LMUD board members appointed by the supervisors will be up for election in November 2008.

He said the situation has totally changed since seven people applied to the LMUD board for appointment to two seats. Pyle added more people might apply now and he wanted to give the public as much opportunity as possible to get involved.

“It’s totally changed now,” Pyle said. “Instead of one or two, it’s now up to three, which makes a big difference being done by us and three new members would be a quorum and three new members could run the board.”

Supervisor Jim Chapman agreed, saying the board of supervisors needed to act independently of the current management and governance crisis at LMUD.

Cady thanked the supervisors for recognizing the urgency and taking quick action “whatever the action is.”