Two CSD board members and one former director have been asked by town legal council to return to the district a total of more than $8,000 they received for attending meetings that did not qualify for stipend payments.

According to Town Attorney John Stovall, since 2006, CSD President Ray Tetreault was overpaid $1,900, Director David Piepho $6,563.21, and former Director Patty Knight $502.48. The stipends were paid following inclusion on expense reports filed quarterly by the directors.

Stovall said Piepho has already repaid the amount in full, and Tetreault is reimbursing the amount by refusing a stipend check owed to him and paying the difference with a personal check. Stovall has asked the board for the authority to request repayment from Knight.

Stovall addressed the stipend issue during the regular CSD meeting on Dec. 16. The subject of inappropriate payment for meetings attended by CSD directors was raised more than a year ago by resident Bob Mankin, who expressed concern over the legality of CSD directors being paid for attending the Sheriff’s Municipal Advisory Committee (SMAC) meetings. The CSD board has never authorized directors to attend SMAC meetings as representatives of the town.

In a letter addressed to the board and town general manager dated Dec. 16, Stovall concluded that CSD directors can attend the SMAC meetings as individuals but not as representatives of the town’s board, and therefore cannot be paid a stipend.

However, in reviewing Mankin’s letter to the town regarding the SMAC issue, Stovall said several other issues were raised, the primary one being the question of which meetings directors can be paid for attending. Stovall reviewed payments made to directors since Jan. 1, 2006, when the state government code defining stipend payments went into effect.

“I have reviewed summaries of all payments made to all directors,” Stovall read from his report, “and I find that directors were in fact mistakenly paid for meetings for which, pursuant to the change in the definition of “day of service,” which occurred in 2006, they should not have been paid for.”

According to Stovall, the mix-ups are the result of inadequate modifications to the town’s internal accounting procedures as the result of the 2006 changes in the law, and the complicated interaction of those laws. The three laws, known as the “Community Services District Law,” the “Ralph M. Brown Act” and “AB 1234” were enacted in 2005 and made effective in 2006.

The confusion, maintains Stovall, lies in the interpretation of these overlapping laws as they apply to stipends and expense reimbursements.

In Stovall’s opinion, the issue of stipends is controlled by the “Community Services District Law” which states that the board of directors may receive $100 a day for each day of service for any meeting conducted in accordance with the Brown Act, approved by the CSD board and followed up with a written report at the next board of directors meeting. Such circumstances include public meetings or public hearings conducted by another public agency, representation of the district at a public event, public benefits for nonprofit corporations on whose board the district has membership, and participation in training programs on a topic directly related to the district.

The time-consuming and costly investigation came with a legal counsel price tag of between $12,000 and $14,000, a figure Stovall said his law firm would credit back to the district.

“It was shocking to me, too,” Stovall said of the cost. “This town is a very valued client and I would like to credit that back to the town.”

Mankin applauded Stovall’s gesture and said he had never intended the issue to go so far: “To a degree I want to apologize to the board … this is not what I intended, and you’ve gone over and above my expectations. I don’t think the board needs to take any further heat for it.”

But others, like resident Don Flint, aren’t as satisfied with the results. “I am pleased the Board has begun to resolve this issue,” he wrote in a recent e-mail to the Press. But he believes more should be done by the directors who received the improper payments: “Now I believe each director should thank Mr. Mankin for raising this issue, publicly acknowledge their mistakes, and provide a detailed accounting of their stipend restitution claim for the public to review.”

Stovall’s report did not specify how the amount each director must repay was determined.

Tetreault said that while he didn’t necessarily agree with the resolution, he would certainly comply. “I’m not sure that I agree, because all of these meetings were for district business, but we have to do what the law says and so we are complying. I hope this puts the issue to bed.”

Stovall’s 14-page report also addressed issues including what director expenses qualify for reimbursement, improvement of the town’s accounting procedures, and a recommendation that the CSD work to change state law on stipends and reimbursements.

He also suggests adopting a resolution to charge residents for expenses related to advisory council (AC) functions assigned to it by the County Board of Supervisors. Those expenses cannot be paid for with the town’s sewer, water and landscaping revenues, and there is no other dedicated fund from which they can be paid.