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February 25, 2024
By Brian Hews
Los Cerritos Community News has learned that Central Basin Municipal Water’s (CB) insurance carrier has notified the Commerce-based agency that it risks losing its crucial insurance coverage for directors.
The reasons cited by the carrier were the agency’s recent spate of lawsuits and the current climate at the District, including:
The board recently paying out $2.2 million to five former employees who settled a director harassment lawsuit, as first reported by LCCN.
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Litigation with its former GM Kevin Hunt.
The extremely questionable lawsuit filed by CB Director Leticia Vasquez-Wilson against CB claiming her civil rights were violated.
The new CB board majority – President Michael Gualtieri, GM of La Habra Heights Water, appointed by purveyors; VP Juan Garza, who was appointed due to the death of Phil Hawkins; and elected Directors Vasquez and Martha Camacho-Rodriguez – possibly voting to roll back many of the policies recommended by the 2015 California State audit and implemented while CB Director Art Chacon was president.
Those new policies were responsible for, among other things, a credit rating increase saving the agency hundreds of thousands of dollars along with an increase in cash reserves not seen at the agency in nearly 15 years.
The carrier also cited the recent new board majority’s actions against General Manager Dr. Alex Rojas – where the majority violated both CB’s Administrative Code and Rojas’ employment contract by placing Rojas on leave – as additional causes for possible non-renewal.
The board used newly-hired attorney Victor Ponto’s “interpretation” of CB’s Administrative Code and Rojas’ employment contract – which blatantly contradicted the terms of both the Code and the contract -to place Rojas on leave.
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If the carrier follows through, the District in a situation with no director liability coverage, possibly putting the agency in severe financial distress.
At CB’s January Administration and Finance Committee meeting, nine potential new harassment litigation cases against the agency were discussed.
The District will learn the fate of its liability coverage renewal at its March board meeting.
