Investigations Still Roil Pine/Strawberry Water District


Investigations of Pine Strawberry Water Improvement District Board members continue to agitate customers — and roil relations on the board.

That may change with the abrupt resignation of five of the seven board members. None of the resigning board members faced investigations, but four faced an increasingly bitter attempt to recall them based on rate increases and budget decisions.

In a statement, the resigning board members said they quit to save the district the cost of a recall election, give the district a fresh start, turn the management of the district over to the county board of supervisors and devote time to their jobs and families instead of the conflict-ridden, time-consuming volunteer position on the water district governing board.

But Thursday night’s meeting involved a couple of parting shots — and continued conflict.


Sam Schwalm

The meeting touched on complaints board member Sam Schwalm has violated the state’s open meeting laws. The meeting also reviewed changes auditors recommended in handling district credit cards and purchase orders. That issue made headlines when then-board member Mike Greer failed to provide receipts for credit card purchases and sometimes used a district credit card for personal expenses.

The first issue involved alleged violations of the state’s open meeting law by Schwalm, a longtime critic of the board whose wife has played a leading role in the recall movement against his fellow board members.

Board Chairman Ray Pugel at Thursday’s meeting read a letter from the Attorney General’s Office that came in response to Pugel’s complaint Schwalm had violated the open meeting law when he attempted to discuss the budget during a portion of the meeting reserved for board reports and comments. On that occasion, other board members cut off Schwalm’s report on the grounds that the agenda hadn’t listed a budget report.

The letter from the Attorney General’s office to Pugel said that an investigator reviewed the agenda, minutes and an audio tape of the meeting. The investigator concluded Schwalm’s comments would have violated the open meeting law if he had continued. But since the board chairman cut him off, no violation of the open meeting law had actually occurred.

Schwalm responded, “Just to clear the record, you’re the one who told me to discuss it.”

Pugel snorted, started to speak, then stopped himself.

Schwalm then continued mildly, “but now I know.”

Board member Gary Lovetro, who has since resigned, interjected that he and other board members have made at least 10 complaints to the Attorney General’s Office claiming violations of the open meeting law.

“There is an investigation by the Attorney General of open meeting law violations by Sam Schwalm,” said Lovetro. “This is not over.”

On previous occasions, Lovetro has complained to reporters that Schwalm has violated the open meeting law by posting discussions of issues coming before the board on a Web site managed by a watchdog group that has been critical of the board.

The open meeting law requires board members to make all of their decisions in the open at properly advertised meetings the public can attend. That means boards and councils must post agendas in advance and stick to the topics listed. If a member of the public or a board member brings up a topic not on the agenda, the board can’t discuss it or come to a decision.

Elected officials can also violate the open meeting law by meeting privately to discuss how they’re going to vote — if that discussion involves a majority of the board members.

They can even violate the open meeting law by e-mail. For instance, imagine that a board member e-mails another board member to say how he’s going to vote on an issue. Now say that board member forwards it to a third board member with his endorsement. Once that e-mail chain reaches a voting majority of the board, it could constitute a violation of the open meeting law.

However, the open meeting law doesn’t prevent a private discussion of issues before the board so long as it doesn’t involve a majority of the governing board, either at the discussion or through subsequent talks.

Schwalm in a subsequent interview said he thought that Lovetro’s complaints involved emails Schalm had sent to other board members when he first came on the board seeking to have items added to the agenda. He said Lovetro had also complained about discussions of budget actions already taken Schalm had posted on the Water for Pine/Strawberry Web site, with notices sent to board members.

Later in the evening, a report from the district’s auditor at least briefly revived the controversy that for a time swirled around then board member Greer’s alleged misuse of a district credit card. Another board member revealed the questionable charges without receipts, stirring up a flurry of charges, counter-charges and denials. Greer eventually resigned.

At the time of his resignation, the Gila County Attorney’s office allegedly opened an investigation into whether Greer’s use of the credit cards broke the law. Investigators now will not confirm or deny whether that investigation continues. On Thursday, the district’s lawyer said he’d received no update on the alleged investigation.

However, the district’s auditors recommended a variety of changes in its procedures to avoid such problems in the future. The auditor found no “material” weaknesses, but found a number of less crucial “significant weaknesses” relating to internal controls on spending. The auditors’ recommendations included:

• Limit the number of credit cards and require receipts for all purchases. The auditors reviewed 10 credit card purchases and found no receipts for two — a $20 charge at the Early Bird Café and a $50 charge for gas at a Circle K.

• Tighten up on providing invoices and purchase orders. The auditors found a lack of documentation for three of 25 disbursements reviewed, including a $600 payment to Concrete Coring without an invoice.

• Adopt a written policy to require purchase orders for any purchase over $2,500. The auditor found no purchase order in the records for one of five payments reviewed. That included a $39,796 payment for a year’s worth of consulting services to Verde Engineering. The auditors recommended the board re-designate Verde Engineering or some other firm as the engineer of record at least once every three years.

• The auditors also concluded the district should get competitive bids for some contracts above $25,000. The board failed to do that for two of the contracts reviewed, including a $68,000 contract with JB Construction and a $113,990 contract with Aero Drilling.


Deb Schwalm 3 years, 1 month ago

RECALL PSWID BOARD Committee consists of: Ric Hawthorne - Chairman, Pam Mason - Secretary and Forest McCoy - Treasurer. As a member of the recall, I am mostly the art department.


Deb Schwalm 3 years, 1 month ago

Several of the recent articles and comments on the blog refer to volunteering. Anyone donating their time and effort for free as volunteers, should be commended. Most volunteering is a thankless job but it's a higher calling with the purpose being for helping a person, place, cause, etc. Volunteering isn't just helping others, it is really an exchange. Volunteers often say they get back so much more than they give. That being said, it should not be used as a vehicle for gaining power, influencing people or situations, control, personal gain and saying "I'm a hero" or whoa's me, no one appreciates me for volunteering.


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