Tuesday, September 9, 2014

Interview with Dennis Mills - CCWD Candidate District 4

Why are you running for the CCWD Board?

I have been a rate payer of CCWD since 1987. Over the past twenty
years, how many missteps has CCWD taken costing the rate payers
millions? This includes building a new office, defaulting on bonds,
losing lawsuits, risky investments, revolving door managers, etc. I
continued to live here but had to leave the county, as so many others
have done, to secure a career. I am now retired and think we can do

What are your qualifications?

I recently retired from a very successful national corporate career.
I am trained in problem solving techniques such as ISO9000 and
CQI/TQM and Six Sigma. I was the developer of training courses for
customer relations skills and technical disciplines. As the western
states training coordinator, I not only trained those syllabuses but
taught others how to do the same.
I am a certified mentor and facilitator, which has been valuable in
teaching others how to duplicate success. I was responsible for
profits with a nearly $40 million yearly budget and line item
accountability. I am not a politician; I come from the private sector.

What, if anything, will you do to protect our water rights?

I will work to set in motion the means to show everyone we will be
able to fully utilize our water rights based upon our current and
future needs. With the drought, we could easily be out muscled and
lose further rights to larger agencies or the state where they can
show greater need. To protect what we have requires the directors to
work with staff to clearly identify current and future uses and show
we can support those uses with the distribution systems we have in
place now or are planning to improve. I will work to develop a
positive rapport with other entities that serve the public.
Currently, CCWD has a reputation of being “inept” and “a bully” when
talking with other agencies about their negotiating skills. An
attitude change is in order. We have to be better negotiators.

Do you support the wild and scenic designation of the Moke River?

In its current form, I do not support the designation. Who stands to
benefit as the single largest user of water flow on the Moke?
Rafting. Additionally, Native Americans object to those using the
river in such ways that trample on their sacred lands. There is
nothing “wild” about the Moke. Scenic, yes it is beautiful, but we
need to not close the door to any future water needs for this county
and be locked out of the process. We had the same effort of wild and
scenic on the Stanislaus back in the early ‘80s, trying to stop New
Melones from being filled. The effort lost and as a result we now
have options in the future on the Stan.

What is your stand on fleet gas cards and accountability of CCWD
vehicle use via GPS or other means?

I am shocked to find some recent months CCWD spent nearly 1/3 of
their fuel expense at Chevron. I required WEX card use only, tied to
GPS phones, in my business. Employees were disciplined for using
major national brands when fueling company vehicles. The WEX card
system provides (at no additional charge) tools in the reports to
verify accuracy of fuel purchases, non-fuel purchases, over fueling,
fueling other vehicles, or maintenance issues. CCWD was not aware of
the option from WEX in my recent meeting with them.
I asked Mr. Perley, during the rate hike hearings last year, why they
did not have company cell phones linked to GPS reporting. His
response was they needed to install radios first. No, you just link
up the phones to a GPS reporting system. These are phones provide by
CCWD after all. There are many positive reasons for doing so. Can we
say efficient use of assets? The savings is immediate as it requires
accountability and prevents misuse.

Will investigation into the alleged depletion and/or disappearance of
the reserve funds be a priority?

YES! I still have no clear answers as to why we had $45 million
investments in 2005 depleted to $21 million in 2012. My own 401k took
a hit in 2008 but was back in positive territory by 2012. When you
look at the last two rate increases, they don’t begin to cover the
investment losses. In other words, sound conservative investment
policies could have prevented the need to raise rates recently. I am
also concerned about what happened to the reserve fund that was in
place back in 2003.
Think for a moment, if we had $45 million invested in 2005 when the
stock market was about 10,000 and the market today is currently
17,000, what should our investment portfolio look like? We need
different brokers and consultants, as you can see they did not have
our interests in the forefront. Just the Lehman investment alone will
only recover about 27 to 30% of the value. Why were we so heavily
invested in General Motors, for instance? The handwriting was on the
wall long before the bankruptcy.

What new programs/policies would you like to see implemented?

Where do we start? Let’s start with operations for this question.
Inventory control, centralized purchasing, asset identification,
random process verification, GPS tracking; minimize windshield time,
efficiency reviews, and more. There is very little of the current
daily operations model that makes sense to me. All I have been
hearing is excuses as to why things are being handled the way they
are. How quickly everyone rallys to defend the current methods within
the district.
Next, when has the policy and procedure manual or the operations
manual been reviewed and updated? Many policies seem to be cast in
stone rather than consider some latitude for managers to “do the
right thing” and find common ground in solving issues.
Third, we need to review our investment, borrowing, and bonding
policies. There should be clear direction within those policies to
handle most issues. We cannot afford to sell bonds and pay an
estimated 6% interest, when we can borrow money at under 2%. This has
been going on for decades. And, in the case of AD604, we defaulted on
the bonds and are still paying decades later. CCWD paid out $500,000
last year against AD604 bonds in default.
We need to begin an austerity policy within the district. The private
sector has been doing this since the market crash of 2008 and very
innovatively found ways to provide quality products or services at
reduced costs.
I feel it should be a requirement for every director to have some
formal training in problem solving skills and analytical analysis.
Without these skills we will continue to spend too much money hiring
others to do studies, where they have no vested interest in the
results, rather than do it ourselves. And, without these skills,
directors will accept information from outside sources as fact,
rather than take the time to do their own investigation and verify
the information presented is accurate.
When the board has minimal agendas, study sessions should be
incorporated with public involvement. And the General Manager should
not be the one dictating whether the board will meet or not.

What do you feel is working within CCWD well and would leave alone?

I see the whole organization needing attention with the exception of
customer relations as being on the right track now that Mr. Metzger
has been hired. Looking at the accounts payables for the past six
months, you begin to see a pattern and a management style or
personality. I cannot justify the lack of inventory control, asset
protection, or the current daily spending policies. All I have been
hearing is defensive responses and reasons for not wanting to be
accountable. Every decision has to pass the test against the mission
statement. One part of that statement, “while maintaining cost-
conscious, reliable service” doesn’t seem to be followed. If you
don’t like the mission statement, then change the mission.
To put up a 180 page budget in a format that looks at most parts of
the business from different perspectives is confusing. I can work
Excel programs with much larger budgets and I have never seen so much
paperwork to explain how money is spent. Yet CCWD throws so much data
into the “other’ category, rather than be transparent with the
details almost feels like we aren’t supposed to know the specifics.
I reorganized businesses in trouble over the years; we had to decide
if the organization would be willing to change or resist all effort
to improve. Currently, this organization has minimal checks/balances
in its current operational model. So, we should review the whole
package. Right now CCWD doesn’t need a General Manager, they need a
crisis coordinator.
When another General Manager is hired, the directors must direct and
not micro-manage the operation. This requires coaching and mentoring
but mostly requires the directors to allow the staff to make mistakes
and learn from them. The problem with directors micro-managing goes
back to Grand Jury reports starting in 2000. Directors with no middle
level management experience often fall into this trap. This also
means the General Manger should have the latitude to deal with toxic
employees without directors’ intervention.

Will you or will you not, push for the completion of the sewer line
on Little John Road? Why?

Yes I will want this project completed.  It was part of the original
concept for Copper Square. It is part of expanding the infrastructure
and assuring future needs will be met. I would have some concerns
though if the current rate payers would be responsible in the future
to have this project done.

Do you support or oppose groundwater regulations?

Oppose! The state’s push for the monitoring of private wells has
property rights issues tied to it and the next logical step would be
to meter private wells. Who would the state mandate handle this
effort? The county water districts. What the state is really trying
to deal with is water subsidence within the San Joaquin basin and
includes some of the west county but they want to lump everyone into
their decision. Groundwater is different here in the foothills as we
are in fractured geologic formations and water flow or depth can vary
greatly over just a few hundred feet. In downtown Vallecito, for
instance, we have artesian water flowing right now in the middle of
the drought.

Please explain your understanding of the North Fork Stanislaus River
Hydro Electric Development Project.

I was in the meetings when North Fork Project came to life between
1985 and 1990. This nearly one billion dollar project is ours, NCPA
is the operator. NCPA is a consortium of cities in northern
California. We hold the FERC license. But we will have to spend
millions to relicense the project in the near future. The initial
payment of $19.2 million and subsequent yearly payments by NCPA to
CCWD have not been kept “stand alone” but used to offset budget
shortfalls, investment missteps, lawsuits, or simply given away. We
receive approximately $500,000 annually from NCPA. We should have
been using it to improve our storage (such as the redwood tanks in
Arnold?) and distribution systems over the years, maybe even cover
the flume/ditch system when part of the UPA. Sadly, we are spending
our future to take care of today.
NCPA now has a foot hold in our county water rights, thanks to CCWD’s
negotiations with NCPA when the PG&E Utica project was purchased.
NCPA negotiated to take their water “off the top”, in a drought year,
which means the priority is their needs first, not ours. NCPA now
holds 1914 water rights to Alpine, Utica, and Union reservoir in the
high country, which is the upper part of the PG&E Utica project sale.
NCPA can send about 200,000 acre feet of water yearly through the
Collierville power station on Camp Nine Road near Vallecito. CCWD
owns the water rights to all water exiting that generation facility
until it reaches New Melones. If we just let it flow and not use it
or plan a use, then we lose it, which may become permanent.
How CCWD exited the UPA is also part of this issue as the UPA
represents the lower part of the PG&E Utica Project. As CCWD walked
away from the UPA, they left Hunters reservoir, the McKays tunnel
tap, and structures behind with the UPA. UPA per agreement has 28
cubic feet per second available. UPA is currently taking 20 cubic
feet per second flow from McKays to serve the residents of Murphys,
Douglas Flat, Angels Camp, Vallecito, Carson Hill and the
agricultural users. UPUD (Murphys water) and the city of Angels Camp
have their act together in handling the UPA. But, if CCWD does not
show need for their full allocation from the McKays tap, in the
Arnold area by 2015, some water may be lost in a challenge, most
likely to NCPA. To regain lost water rights is nearly impossible in
today’s political climate.
As many may know, CCWD is running a high pressure main from Hunters
reservoir to serve Arnold. How many times has it broken and now in
need of major replacement? How many leaks are in the lines now and
how much water is being lost into the ground? I remember years ago,
the option of placing the tunnel tap around Fly-in Acres was
discussed with the reservoir there being the initial storage point.
Water runs downhill, after all, without pumps or high pressure. It
would have required installation of piping to supply the required
water to Hunters for the lower part of the Utica Project. Again, did
we just take the easy way out and now continue to pay for the


I have lived in Vallecito for over 35 years with my wife Vickey.  We
raised our kids here and a third generation part of this area. I
built my own home and operated an independent business in the county
for many years. My wife and I have been active as volunteers in our
community, including the fire system. However, the economics of the
county caused me to seek employment somewhere else, as so many others
have done. This meant commuting long distances daily.  I recently
retired from a successful national corporate career, gaining many
friends and experiences along the way.

I believe what defines successful people is the willingness to set
aside personal things to help others achieve their goals. Many times
when faced with challenges, all I had to do was ask my staff to meet
an objective and it was done. That comes from trust and
accountability that you will do what is needed to help them along the
way. We have to have the integrity to be accountable.

Last year, I attended the rate hike hearings in Arnold, Copperopolis,
and Valley Springs so we could listen to the concerns of those that
would be affected by higher monthly costs. I heard the anger and
disgust from all corners. And, I heard some great suggestions. When
is the last time CCWD sent out a feedback survey with their monthly

I believe this is an opportunity to give back and I oppose being paid
for doing it. How many other districts have directors that serve for
no pay, not even gas money and have done so for years? I see raising
rates while directors take more money/benefits is selfish.
Unfortunately, I don’t see any other candidate sharing that view.


Dennis Mills   PO Box 165  Vallecito     Lakota@bigvalley.net