Tuesday, Jan. 8, 2008 • Cady terminated as LMUD general manager

One final struggle over who really runs the Lassen Municipal Utility District — the board of directors or the general manager — played out  with the posting of two conflicting LMUD meeting agendas on Thursday, Jan. 3.

Members of the public and many Lassen Municipal Utility District employees attend Friday’s LMUD board meeting led by three newly appointed directors despite snowy weather conditions

The first agenda, approved by a quorum of the board members and posted by LMUD General Counsel Jaimee Jones, announced a special board meeting at 1:30 p.m. on Friday, Jan. 4.

Then a second agenda, posted by LMUD General Manager Frank Cady about an hour later, added a couple of items and called for a special meeting to be held at 2:30 p.m. the same day.

A little more than 24 hours later, the dispute was settled once and for all.

When the dust finally settled, three new directors appointed last week by the Lassen County Board of Supervisors had been elected to leadership positions on the LMUD board and Cady, the district’s embattled general manager, had been terminated, effective immediately.

All three of the newly appointed board members — Bud Bowden, Jay Dow, Jr. Matthew Lavacot — and Fred Nagel voted 4-1 for Cady’s immediate termination. Wayne Langston cast the lone dissenting vote.

The 1:30 p.m. meeting began with a 30-minute public comment period in which a number of ratepayers complained about Cady’s leadership of the publicly owned utility district over the past two years.

The ratepayers grumbled or asked questions about the lawsuits facing the district, the number of outside law firms the district retains and the amount of money they are being paid, the firing of an LMUD employee on the golf course (then operated by Cady), the recent revelations regarding the allegedly improper time cards filled out more than a year ago by some LMUD employees and allegations Cady and former LMUD General Manager Don Battles, now an LMUD consultant, frequently play golf on company time.

Susanville attorney David Williams, one of the leaders of the 2002 recall of four LMUD directors, made a short and simple statement.

Lassen Municipal Utility District General Manager Frank Cady listens to his critics one last time during the public comment period at Friday’s LMUD board meeting.

“I’ve been waiting six years to say this,” Williams said when he reached the podium. “Goodbye, Frank.”

John Richards urged the directors to “take back the district” after noting Cady has “hurt us all as a community.”

But it was Keri Richards, LMUD’s office manager, who delivered the most stinging criticism of Cady’s behavior on Thursday afternoon when the conflicting agendas were being posted out in front of the publicly owned utility district’s office.

“Mr. Cady’s actions were absolutely inappropriate,” Richards told the directors, “and they need to be handled. We had an employee who had to go home because she was crying and other employees who were shaking because they were scared. This is just another episode of what we’ve been going through this whole period. Whatever action you take or don’t take today, I would ask that no matter what happens, the employees who work in this building are protected from his outbursts and future activities. It’s unprofessional. It’s intolerable. It’s unacceptable.”

Richards did not describe the nature of Cady’s behavior.

Cady defended his leadership of the district after the public comment portion of the meeting and said there was a difference between facts and opinions.

He said when took over as general manager in July of 2005 the district was losing $200,000 to $300,000 per month and now the district was operating in the black and building up its reserves to meet its bond covenants.

Cady said one power purchase deal he had made saved the district and its ratepayers $850,000 per year.

He added the golf course was a good place to network, meet people and get deals.

At the end of the public comment period, the board moved on to the election of officers.

Langston, the board’s former president, said the public wanted new leadership on the board, and the three new directors moved and seconded their own nominations. The new officers were elected unanimously.

Bowden will serve as president, Dow will serve as vice-president and Lavacot will serve as treasurer.

Then a little after 2 p.m., newly elected president Bowden cleared the room and the board went into closed session. Just before 5 p.m., the board returned to open session and invited the public back in the room.

Bowden said the board took no reportable action on the public employee performance evaluation of Cady, the general manager.

The next item the board considered in closed session was a public employee discipline, dismissal or release.

Bowden delivered the news of the board’s action with a short statement.

“The board has voted to terminate the general manager’s employment agreement pursuant to section 11.2 of the agreement,” Bowden said, “that being the employment agreement Mr. Cady had with LMUD, effective immediately.”

Many of those in the room responded with applause and cheers, but Bowden immediately admonished them.

“This is not a cause for celebration,” he said, quieting the room.

Ray Luhring, LMUD’s assistant general manager, is expected to lead the district until the board names a new general manager.

Bowden also said the board took no reportable action in its conference with legal counsel regarding three lawsuits against the district — Steven and Amy Trevino, David L. Jenne and Eileen Spencer.

He also announced there would be no 2:30 p.m. meeting as posted on the second agenda because “that meeting does not exist.

“Thank you all for coming,” Bowden said. “Thank you for the interest you’ve shown in LMUD. For the employees who are here, this is not a contest between you and the previous manager. I hope that you will continue the good work, and in that vein I hope the board will indulge me, it was reported to me by a citizen that when it was about 7 degrees, he passed an LMUD truck on the side of the road with a cherry picker up in the air and a man working on the line in the wind, a pretty strong wind. So I want to commend that kind of dedication and hope it will continue.”

Langston, the lone director who did not vote for Cady’s termination, stood by the former general manager and his vote.

“If you know in your heart you did the best job you possibly could, you have no reason to back down and no reason to quit,” Langston said. “I gave my heart to this thing. I took all the information that was given to me, and I made the best decision I possibly could. And I didn’t back down.”

Still, Langston said he would support the board’s decision even though he disagreed with it.

“It’s the majority of the board and I respect their decision, and I will uphold it, and I will back it,” Langston said. “But I couldn’t vote for it. I don’t vote politically.”

Despite being terminated immediately, Cady will draw a full year’s salary — nearly $169,000. When he was hired on July 1, 2005, his salary was about $130,000.

According to section 11.2 of Cady’s contact, “The district may terminate this agreement at any time, without cause by giving written notice of termination signed by the president of the board (after being authorized to do so by the board), to Cady. In such case, the district shall be obligated to pay Cady 12 months base salary only, payable on the next pay period following the effective date of the notice of termination.”