West Bay manager hired illegally, ratepayer charges

**Resident takes first step in possible legal action to dismiss manager of West Bay district.
By RENEE DEAL

With the threat of legal action hanging over their heads, members of the West Bay Sanitary District board are meeting in closed session this Wednesday to decide what to do about a legal challenge to the September 1997 hiring of the district manager, who was on the board when he was hired.
Menlo Park resident Ronald Shepherd on March 23 filed a "ratepayer's demand for action" with the district, demanding the firing of district manager Carl Schrader. The papers, drawn up by Redwood City attorney Tony Tanke, maintain that Mr. Schrader's appointment was illegal because he was a member of the board at the time he was hired for the $90,000-per-year job as head of the district, which provides sewer service to a large local area.
The papers cite state government code section 1090 in maintaining that district officers "shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members."
Mr. Schrader remained on the board last year after applying for the position, resigning only after his fellow board members gave him the top job. The board did not conduct an outside search for a manager, considering only the applications of Mr. Schrader and then-acting manager Tim Clayton. Mr. Clayton withdrew his application some time before the board's decision. He declined to comment on the reason for his withdrawal.
Mr. Shepherd's demand for action also claims that Mr. Schrader is required by law to return any salary and benefit payments made to him by the district.
Mr. Schrader and board president David Knight said last week that board members believe the appointment was legal and proper, and noted that Mr. Schrader did not participate in any discussion of the hiring process. "I was excluded, and forced to leave the room when any discussion began," Mr. Schrader said.
'Willful' violation

Mr. Shepherd, a certified public accountant who has managed insurance pools for public agencies, alleges that the board and district counsel William Esselstein knew that the action was illegal, but went forward with it anyway, "causing the district to make illegal and unauthorized payments of public funds for salary and benefits. ..."

Attorney Tony Tanke said that assertion is based on the fact that in January 1991, Mr. Schrader applied for the same position, but resigned from the board when he made his intent to apply known.

"Why didn't he do that this time?" he said, referring to the 1997 application. "I think he didn't do it because he needed to have his influence."

In 1991, Mr. Schrader was competing with four other candidates for the job, including Charles "Sandy" Thomas. Mr. Thomas was hired, but resigned in March 1997, a month before he was indicted on 36 felony counts of stealing and other crimes against the district. His trial is set to begin May 26.

Three of the four board members approving Mr. Schrader's hiring in September remain on the board: David Knight, Finn Halbo and Don Van Creveld.

Also on the board was longtime member John Inglis, who lost his bid for re-election last November. He was replaced by John Carcione, who made Mr. Schrader's hiring a campaign issue. Mr. Carcione harshly criticized the appointment, saying that it was not proper to hire someone who was a member of the board overseeing the district when Mr. Thomas allegedly stole more than $300,000. Mr. Schrader was treasurer of the board for the last few years of Mr. Thomas' tenure.

20 days to respond

Mr. Shepherd demanded that the board act on the matter within 20 days. Copies of the demand for action were sent to the county district attorney and the state attorney general.

Mr. Tanke said he and his client will go to court if the board refuses to comply with the demands. He said he is confident his position would be upheld. "I don't think they're going to be able to get around this," he said.

He and Mr. Shepherd attended the March 23 board meeting to orally present the demands, and, he said, to remind the board that "this is not a fiefdom -- this is a public trust."

Mr. Shepherd, who said he has been following reports of recent sanitary district business in the local press, said he decided to take the action after talking about the matter with board member Carcione, whom he knows personally. He said he is concerned that public officials remember that "there is a certain code of conduct they must live up to, but unless someone takes a stand, it doesn't mean a whole lot."

Referring to the allegations of Sandy Thomas' theft from the district, he noted that "if that were to happen in private business, there would be a real housecleaning." Instead, he complained, the board hired someone to replace Mr. Thomas who should have been keeping better watch on the district's business as a board member.

"I'm not a vigilante or anything," he said. "I'm just a nice guy who got fed up."