(01/07/2011)
By David Hedges, Publisher
thetimesrecord.net

With one investigation into the Mt. Zion Public Service District complete, a second agency is undertaking a wider look into questions surrounding the beleaguered water and sewer provider for central and southern Calhoun County.

The W.Va. Commission on Special Investigations, which answers directly to the state legislature, is looking into at least five years of Mt. Zion PSD records, Spencer Newspapers has learned.

The new investigation was first reported this week in the Hur Herald, an online publication produced by Calhoun County Commission President Bob Weaver.

Weaver has raised several questions about the PSD's operations in recent years, both as county commissioner and in the publication he produces with his wife, Dianne.

Norma Collins, Administrative Assistant for the Mt. Zion PSD, said the investigation was supposed to have been kept under wraps, before it became public this week.

"We were told to keep it hush, hush because it could impede the investigation," Collins said Tuesday, one day after the story broke in the Herald.

She said investigators with the commission had been looking at records for at least a five-year period.

"They said they are not out to get anybody, they just want the facts," Collins said. "They just want the records and we are working with them any way we can."

State law charges the Commission on Special Investigations with conducting detailed investigations into the purchasing practices and procedures of the state and its agencies.

The commission is to investigate "any matter involving conflicts of interest, bribery of state officials, malfeasance, misfeasance or nonfeasance in office by any employee or officer of the state," according to state code.

The commission is to determine whether to recommend criminal prosecution or civil action for any violation, at any level of state government. The commission makes reports to the state legislature on the first day of each legislative session and at other times as needed.

The commission has a staff of eight, including a director, a secretary/aide and six investigators.

The first investigation into the Mt. Zion PSD was requested by the Calhoun County Commission and PSD members themselves after several record-keeping problems were discovered during delays in a $5 million water line expansion project to serve the Arnoldsburg and Millstone areas.

That investigation was conducted by the W.Va. Public Service Commission, which regulates public utilities in the state including water and sewer service providers.

The results were made public at a hearing in Grantsville in late October.

A PSC attorney described the investigation as cursory and said it involved records for one year, from July 2008 to June 2009.

Auditor Troy Eggleton said the PSD records were in disarray, with many missing.

It was in late 2009 that longtime PSD secretary-treasurer Wilma Mace resigned, after serving in the capacity for about 20 years.

The Herald reported that Eggleton said there was a lack of checks and balances, with Mace obtaining pre-signed blank checks that were not authorized to known vendors.

Roscoe Gainer, one of three PSD members, who came on the board around the time of Mace's resignation, said when he asked for records, he was told there were none.

He said PSD members had to make several trips to Mace's home to request records, and the PSD's computer.

The investigation by the W.Va. PSC revealed that a box full of bills had never been mailed to customers, the Herald reported. One bill was in the amount of a customer's phone number, while another error resulted in a customer getting a bill for $35,000.

Eggleton said bank records were used to compare revenue and other data and create a general ledger. He said the result was a discrepancy of $955, which he called an "immaterial amount."

When asked by Calhoun prosecutor Rocky Holmes at the hearing if the investigation determined there was no wrongdoing, Eggleton responded, "I cannot assume there was no wrongdoing," the Herald reported.

He did say the PSD had done a "wonderful job" of regrouping. Several recommendations were made to improve record keeping, and PSD members have said those recommendations are being followed.

The request for the investigation also asked the PSC to look into the awarding of bids for the water line extension project, but there is no indication that was done.

The Mt. Zion PSD was originally a defendant in lawsuits filed by two contractors whose bids on the water extension were rejected.

Project engineer Jim Hildreth remains a defendant in the suits filed by Ron Lane Inc., low bidder on the water line installation contract, and Welding Inc., whose bid on the storage tank contract was never opened.

Although the PSD is no longer a defendant in the lawsuits, PSD members have been called to give depositions in the case.

All three PSD members, Gainer, Shirley Mace and Sharon Postalwait, have been questioned under oath by attorneys on both sides in the dispute, which is pending in Calhoun Circuit Court. Those depositions were taken last year in Spencer.

In the meantime, Collins said the PSD is continuing to work to get its financial house in order.

She said an emergency water rate increase of about 4.8 percent went on customer bills for December, almost a year after the rate request was first filed with the W.Va. PSC.

She said a larger increase to cover the cost of water purchased from the Town of Grantsville is pending. She said Grantsville passed along a 24 percent increase in August.

"That is really hurting us financially," Collins said. "But there is hope."

Collins said the PSD got the state Division of Environmental Protection to agree to waive the more than $17,000 remaining on a fine imposed for failing to submit regular water test results.

The PSD has also been approved for a state grant of $55,000 to purchase equipment needed to upgrade the sewage treatment plant to meet standards outlined following a state health department inspection. She said those funds have not yet been received.

Perhaps most important of all, Collins said the PSD's unpaid bills now amount to about $40,000, less than half the previous amount.

"We're doing OK," Collins said. "At least better than we were before."

Editor's Note: The Special Commission, by all accounts, has not done a fornesic investigation of records obtained from the Mt. Zion PSD.


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