LMUD meetings


January 1, 2005 to July 5, 2005


July 5, 2005



The LMUD special meeting started at 5:00 PM. Barbara France, LCT was in attendance and will sanitize the meeting in a couple of weeks. France tells public wrong date for LMUD meeting (July 23, 2005)

All Board Members were present.

Frank Cady sat in the General Managers seat. No legal counsel was present. LMUD does not have a contract with Cady Pardee Richey LLP. Cady claims that he dissolved the partnership with Richey, but he didn't.

Public Comment: Eileen Spencer was recognized and asked Nancy Cardenas if the public will be allowed to comment on "Action" Agenda item 5B. Nancy could not answer this question, so she did what she normally does...asks Frank Cady. Normally the General Manager sits quietly during the meeting.  Those days are gone. Frank will run the Board just as he always has. Frank Cady said no. Spencer reminded the Board that the public can comment on all agenda items. Cardenas responded that because they will not have any action on this agenda item that the public must speak during public comment. Spencer told the Board that they have thrown out every rule in Roberts Rules of Order and that they disregard the Brown Act at every meeting. Frank Cady then threatened to have Spencer removed.....because he didn't like what she was saying. Spencer then told Cady to "Shut up" and asked again for a decision from the LMUD President. She deferred to the panel of Directors and the consensus was that no member of the public would be allowed to speak on Agenda Item 5B. Freedom of Speech has been gone from LMUD meetings for over three years now. The Brown Act is unenforceable because the Lassen County District Attorney is told to look the other way.

Agenda item 5 B was listed as a "workshop". It was anything but a workshop. This was a marketing presentation by NCPA to promote LMUD becoming a "Pool" member at a cost of $500,000 per year. LMUD is presently an Associate member.  NCPA  The services that NCPA offers "Pool" members is presently being offered by Western at $250,000 according to NCPA Don Dame. Also, LMUD would have to hire a staff member to specifically interact with NCPA's 60 employees. Sounds like decisions were made prior to this presentation. 

Watch for LMUD Directors to sign up for this $500,000 a year membership.....soon. It's only money and this Board would never bring to the table "removing the $3.5 surcharge that they promised to remove in Jan/2001".......  

Where will they get the money? Capital Improvement Budget, Maintenance Budget, Legal fee budget ($330,000). LMUD Directors travel budget could be cut to pay for this new expense.....

Frank Cady will show NCPA that he can waste money better than anyone and will talk the Board into doubling the costs. It won't take much to convince this Board to waste more money. They do it well.

The NCPA presentation by Jim Pope and Don Dame was old and redundant information ending in a plug for LMUD becoming a "Pool" member. 


Left to Right: George Sargent, Langston, Nancy Cardenas, Fred Nagel, Frank Cady, Bill Stewart, NCPA Don Dame, Barbara France, LCT. 


NCPA told LMUD that you don't buy a power plant to make money. You buy a power plant to have power when you need it. The plant illustrated in the slide does not make any money (indicated by the red marks below the profit line) but NCPA stated that the plant could be up and running in ten minutes...... It's like buying a Rolls Royce and just using it on Sunday. It will always be there if you don't want to drive your KIA. 

LMUD Board members attend NCPA functions all over the country. The public was promised a workshop and got a NCPA marketing presentation instead.  



June 28, 2005

The LMUD meeting started at 5:37 PM. Barbara France, LCT, did not attend meeting

Darrell Wood was not in attendance

The LMUD Board approved a contract with Intermountain Computers for hardware support at $75.00 p/h. Frank Cady told the Board that they have been using Intermountain Computers and that they needed a contract with this company. LMUD used this company on a as-needed basis. Cady wrote a nine page contract. 

2005/2006 Budget

Bill Stewart presented the 2005/2006 LMUD Budget. This was typical for the Board to call a special meeting to approve the budget. Only one person attended this special meeting. Bill Stewart referred to the budget process as "using sound judgment". Sound Judgment is something that has been lacking for a very long time. 2005/2006 LMUD BUDGET



June 8, 2005

Cady accepts position as LMUD General Manager

Cady and Richey lie about their law practice 

starting salary: $10,800 PER MONTH

The LMUD meeting started at 5:30 PM. Barbara France, LCT did not attend but filed a story link



Eileen Spencer submitted two handouts to the Board. Spencer reprimanded the Board for illegally placing an ad in newspapers stating that they had applied for financing thru the U.S. Department of Agriculture (Rural Electric Services) when in fact they had not done so. US DEPARTMENT OF AGRICULTURE RESPONSE. Frank Cady attempted to move past  Phase II  without Board approval on the co-generation study that the ratepayers are paying for. Phase II is only a study. Phase III, which the Board has not approved, would then begin the process of seeking financing for a project that will save another utility $800,000 a year. (PSREC). Fred Nagel is a PSREC customer and does not "reside" within the LMUD service boundaries.  The second handout was the FERC notice that the Arrowrock license is being terminated. FERC considered KWH's concerns in it's May 27, 2005 ruling against the Boise irrigators. This project had a known history of failure when Frank Cady brought it to the LMUD Board in January 2001 as a diversion to LMUD's deep financial troubles. Everything about Arrowrock was kept secret and what information was released were lies. Lies by Frank Cady, Louie Templeton, Wayne Langston, Richard Parker and Mario Gionatti.  link

Comments were made by John Zenith.

The Public is not allowed to comment on the Business Agenda. Gross Brown Act Violation each month. 

Agenda Item 4: Business Agenda

Sharon Edwards notified the Board that LMUD employee Robert Baber had quit. 

Bill Stewart presented his monthly "smoke and mirrors" report on LMUD's financial condition. LMUD still is experiencing a cash flow problem.

No Treasurers report.

Agenda Item 5: Action Items

A. Approval of minutes. Eileen Spencer requested that the minutes be completed. LMUD failed to mention (May 11, 2005) that Ms. Cardenas requested that Barbara France, Mike Smith and Eileen Spencer for their press credentials. Both France and Smith admitted that they did not have any press identification. Eileen Spencer was the only person sitting at the "press" table that could provide press credentials and she was the only one asked to leave the press table. George Sargent's statement was omitted about his review of Spencer's credentials, "It looks good". The minutes failed to include Ms. Frances' comment to the Board that, "The Board does not have to provide a table for the press", and Mike Smith's comment, "What you did was wrong". Spencer added that the May 24, 2005 minutes stated that Les Leiber had and "existing contract" with LMUD. What the Board failed to report to the public is that the contract was for $60.00 p/h. The alleged $75.00 p/h was added in March 24, 2003 without Board approval. The Board can only pay Les Leiber at $60.00 p/h if they use his services. Les Leiber was being paid $57 as Interim General Manager. Les Leiber quit on May 12, 2005 to seek a higher rate of pay. This has become a commonly accepted policy at LMUD. 

B. Approval of contract with Porter Simon. Jaimee Richey (Frank Cady's partner) . Richey stated that the legal firm was being hired to review Frank Cady's contract. Richey stated that Steve Gross was handling matters for LMUD. KWH learned that Steve Gross is a sexual harassment attorney.  

Twitchell may be the reason this attorney was hired



The Board approved hiring Steve Gross. 

C. Amendment to AccTech contract for support services. Bill Stewart stated that this is a contract for support of their network system. The Board approved this contract amendment unanimously.

D. Presentation of new LMUD website: Theresa Boucher gave a presentation of the new LMUD website that should be on-line June 9, 2005. The LMUD website has been dysfunctional since 2002. Check it out, it's pretty cool  www.lmud.org  

E. Approval of Resolution 2005-07-Cost Containment Concepts (Larry Carter, Nevada) is LMUD's health plan administrator. In the past, LMUD has sent a monthly premium to Mr. Carter. He then would pay claims with this premium. As required by law, any excess was put into a "Reserve Fund". This fund accumulated a balance over $300,000. LMUD has now decided to pay into this fund in $25,000 increments. This was basically a "cash flow" decision rather than moving to a more "efficient" system as Bill Stewart claimed. The new system requires more of Bill Stewarts time to monitor the funds needs. The benefits are handled and distributed by Cost Containment Concepts. The Board passed this unanimously. The Board asked about monitoring this new procedure and Stewart stated that the Board could hire an auditor once or twice a year because Steve Pezzullo had stated that they are not qualified to do this type of audit.

F. Power Committee Report: Darrell Wood and Wayne Langston presently sit on LMUD's Power Committee. Langston presented the Board with a slide that indicated the costs of power over a six month period. Langston claimed that the data showed that power costs increased to $72 MW at peak usage times. Langston told the Board that long term contracts would "Lock in a Loss" to the District. Cathy Potter raised her hand for comment and Langston told the Board that this was not an action item and that the public could not comment but he would allow Potter to comment. Nancy Cardenas then recognized Ms. Potter.  Ms. Potter told the Board if the prices go up and LMUD does not have a locked in price this could be a bad situation. Langston concurred. Spencer told the Board that Langston is mistaken and that the Brown Act allows for public comment on all agenda items even though this Board allows only discussion on certain agenda items. 

G. Letter to Lassen County regarding the Dyer Mountain Resort EIR. The Board failed to provide a copy of this letter in the Board Packet, even though they had a copy of it. Eileen Spencer reminded the Board that if they have it, the public is entitled to a copy prior to any vote.





Sharon Edwards, LMUD's current Interim Manager, stated that she has copies available, but Jaimie Richey (Cady's partner) said that the Board did not have to give the public a copy. Richey is unfamiliar and inexperienced with the Brown Act and basically most everything having to do with a public utility. Her arrogance and immaturity was noted by the public after the meeting.   The Board voted unanimously to send the letter without allowing the public to review the document. The public was denied access and comments on the content of this letter prior to a vote by the Board. If the Board has a document they must distribute this document to the public prior to a vote.  After the vote, Sharon Edwards voluntarily passed out copies of the letter. Dyer letter This action is typical of this Board when they have something to hide. 

H. Payment of Bills: The Board voted unanimously to approve all bills presented.

Closed Session: Nancy Cardenas refused to allow public comment prior to the Board going into closed session. The Brown Act requires the Board to allow comments prior to the Board adjourning to closed session. Cardenas stated that the public had the opportunity in "Public Comment" to speak. 

A. Appointment of General Manager: The Board announced that Frank Cady has accepted the position of LMUD General Manager. Jaimee Richey (Cady's partner) said that Frank Cady's contract had been reviewed by their attorney and that Frank Cady has accepted the terms. David Williams asked who the attorney was and Jaimie Richey advised the Board not to answer this.    This was not a secret....... the Board asked Carl Mycoff to draft the contract. Carl Mycoff is not an attorney. Richey stated that "their attorney has reviewed the contract". The Board then voted to give Frank Cady $10,800 a month and to review this salary in 12 months. Eileen Spencer asked when Cady's contract will be signed because LMUD must terminate Frank Cady's legal contract immediately. Frank Cady can not give legal advice to himself and the law states that Cady Pardee & Richey cannot represent LMUD due to a clear conflict of interest. 

Frank Cady filed for a Limited Liability Partnership with the Secretary of State in January 2005 for "Cady Pardee & Richey" CADY, PARDEE, RICHEY LLP

No other action was reported by the Board. LMUD has announced another "Significant exposure to litigation" but reported no action. 

The Board adjourned the meeting 

Nancy Cardenas was asked after the meeting why she changed her vote. George Sargent and Nancy Cardenas previously voted against hiring Cady. Nancy said "The Board wanted this". ????



May 24, 2005

The meeting opened at 5:35 with all five directors present. Two Susanville police officers made their presence known as they walked through the meeting. 

Public Comment:  Eileen Spencer gave the board a list of things that Frank Cady has brought to LMUD. (Arrowrock, Enron and sundry "back-room"  deals, etc.) 


Agenda item 5B. The Board voted to hire Mycoff & Associates to look for a Director of Engineering. The fees will be a minimum of $30,000 or $28% of the annual salary the candidate, if any, is selected by the Board. 

Agenda item 5C. Ratification of the use of Lester Leiber to do consulting work. The Board was asked what they were ratifying. The public was not given a copy of Liebers contract and apparently the Board was not given a copy of this "alleged" contract either.

However, Frank Cady read from an "alleged" existing consulting contract with Leiber OR WAS HE READING.....Cady was writing while speaking about this existing contract?????The Board of Directors had no idea what this "alleged" consulting contract said and voted to approve "ratification" of Les Leiber as a consultant.  

Why?  Because the Board never approved the $75 per hour in 2003. 


No action was was even needed, since Frank Cady claimed that a contract already existed and was open ended. This was a typical dog-and-pony show. The Board will pay Leiber $75 an hour for undisclosed work. Leiber was making $57.00 before he suddenly quit and wanted to be a LMUD consultant.    



Unfortunately Frank Cady did not bother to give the Board a copy of this "alleged" contract and the Board did not ask for a copy before they voted on hiring Les Leiber. They voted on a "pig-in-a-poke"   

The Board was paying Leiber $57 p/h for the General Manager position but Leiber quit suddenly to become a "consultant" at $70.00 p/h. Leiber's tasks will remain secret as the Board will be directing the work of Leiber. 

Agenda item 5D- The Board voted to spend $1,000 to Cooperative Benefits Financial services to determine if the present wage scales are appropriate. 

Agenda item 5E- The Board approved the payment of bills. 

Carol Forbes attended the LMUD meeting for the second time in a year. Jim and Carol Forbes filed a lawsuit against LMUD for the the February 18, 2003 assault. The lawsuit was dismissed by the courts. The couple has filed lawsuits against LMUD, KWH, Eileen Spencer, Jack Helsel, the City of Susanville, Police Chief Gallagher, Bill Noonberg and the Lassen County Times They have lost the lawsuits against LMUD, KWH, Eileen Spencer & Jack Helsel. David Williams represents the Forbes in all of the actions.  It appeared as though Forbes may have been trying to stage another incident for a future lawsuit. She was escorted from the LMUD meeting by two Susanville Police Officers. 


Left: Sharon Edwards was hired as the Interim General Manager. Keri Richards is trying to ignore Carol Forbes

The Board adjourned to closed session and reconvened at 7:00 PM to report that they had hired Sharon Edwards to be Interim General Manager. Sharon Edwards retired as the LMUD Office Manager. They will pay her $10,000 a month. Sharon will do exactly what she is told to do, exactly. 


 Edwards contract

There was no report of hiring Cady.  

Frank Cady removed closed session items 6C (appointment of Director of Engineering) and 6D (Significant exposure to litigation). 

The Board adjourned at 7:05 PM

May 11, 2005 

Standing room only at LMUD meeting and an angry public did not get to comment on Frank Cady's appointment. 



Langston was instructed by Cady to object to Spencer sitting at the Press Table. 


Spencer was asked by the LMUD Board to move away from the press table. The LMUD Board said that they would not recognize Spencer as a reporter even though she was the only reporter with press credentials???????

LMUD cannot require any reporter of any media to show proof of their media status and then discriminate against them because they simply do not like what they write. 


Barbara France, Mike Smith & Eileen Spencer sat at the press table. Spencer was asked to leave???


Cady had coached the LMUD Board members on how to violate the First Amendment. (Cady is the little boy that appears to be praying that the Board members were still ignorant enough to do it.). They didn't disappoint the "Exhaulted King and Ruler" of LMUD. 


The LMUD meeting was called to order by Nancy Cardenas at 5:30 PM. There was standing room only. The public came out in response to the Lassen County Times urging the public to take their utility back. 

The first order of business was Wayne Langston objecting to Eileen Spencer sitting at the press table. Langston insisted that Spencer provide credentials to the Board (violation of the First Amendment).  Nancy Cardenas asked the other board members if she should ask each of the reporters sitting at the press table for credentials. Langston expressed only concern for Spencer. 

Nancy Cardenas asked Barbara France for her press credentials and Ms. France said that she did not have any. Mike Smith was asked for his press credentials and Mr. Smith did not have any. 

Eileen Spencer was asked to produce her credentials for "inspection". Nancy Cardenas did not look at the credentials, Wayne Langston asked if he could take the cards out and was told "no he could not" by Spencer. Spencer then handed the cards to George Sargent and he said they were good. Nagel and Wood refused to look at the cards and Spencer then asked the Board members if they were going to discriminate against her. Spencer told the Board that they cannot do this that this was a violation of the First Amendment. 

Spencer told the Board they could not require accreditation from one person and not the other two. 

The comment from Langston was that he knew the other two people  and we should allow only local media to sit at the table. (Spencer is from Westwood) 

Langston sniped childish remarks to the public throughout the meeting. 

Now that LMUD has shown how backward they are, can you imagine if a reporter from the Sacramento Bee or the San Jose Mercury attempted to sit at the "press" table and were asked to leave because they were not "LOCAL". 

Langston only gets into trouble when he opens his mouth to speak. You won't find a better example of a walking talking idiot then Langston. 

Barbara France told the Board that they do not need to provide a table for the press and Mike Smith told the Board "What you did was wrong".

The worst run utility in the State of California-"CASH POOR LMUD"


Outgoing GM, Les Leiber, George Sargent, *Langston, Nancy Cardenas, *Nagel and Wood. The little boys acted like they were fighting to see who could sit on the toilet first. Langston won. *You just add Cady and you have the makings of the LMUD Mafia.

 The Board moved on to Public Comment:

Eileen Spencer reminded the Board that a closed session item is illegally on the Agenda and recommended that they table or remove the item for another meeting. Spencer told the Board that closed session item 6 (A) cannot be heard in closed session until it has been discussed in open session    

 54956.8- Negotiations for sale of public property

Cady was attempting to put the sale of LMUD property with Dyer Mountain Associates in closed session. 

One HUGE PROBLEM....Dyer Mtn. Associates did not know about this action by the Board. Cady lied to the public and the LMUD Board

Frank Cady knows better, but he always hopes that no one else will know the law. Spencer told Cady that he was wrong and that it had to be agendized in an open session first.  Spencer told the Board that once this "Real Property" was discussed in open session, that it must be agendized in "Pending litigation" rather than the Brown Act exception of "real property negotiations".  Frank Cady told the Board that Spencer did not know what she was talking about. 


CADY was deliberately attempting to usurp the law. Cady gets caught in these lies often (Cady Law 101) Spencer told the board that if they do not take this off the closed session agenda that a Brown Act violation will be filed. 

 NOTE: Frank Cady's comment was that it will be talked about on the agenda. It never was because it wasn't on the open session agenda.  Cady very softly asked the board to remove 6 (A) from the closed session just before going into closed session.

Agenda item 4 A, B. No reports

Agenda item 4 C-General Managers Report. Nancy Cardenas thanked Les Leiber for stepping in again to help them. Les Leiber reported only that PAR Electric is almost finished. 

Agenda item 4 D- Controllers report- Stewart attempted to tell the Board that everything was fine. The financial reports indicate again that LMUD is "CASH POOR".  They are having difficulty paying day to day bills. 

Agenda item 4 E-Treasurers report- Nagel was out of his element. He provided the Board with a slide that he apologized for because he didn't really understand it. It appeared to be....well.....it appeared to be an attempt to show that....well like Fred Nagel stated..."It's difficult to understand". 

Agenda item 5 A (1)- Approval of minutes. Fred Nagel moved and Sargent seconded that the April 13 and May 3 minutes be approved. It was approved unanimously. 

Agenda item 5 B- Consideration of commitment and contributions to the Western Contract No. 96-SNR-00110. This was a routine annual item and was approved unanimously.

Agenda item 5 C-Approval of the Master Agreement with Cooper Power Systems "Protection upgrade". Who runs LMUD. Les Leiber requested permission from Frank Cady not the elected Board members. link  This was approved unanimously.

Agenda item 5 D-Consideration of Resolution 2005-06- Environmental Assessment findings for Notice of Exemption for High Sierra-Gas generation project.

Frank Cady told the Board that he had done one of these a few years ago and that this is required to move forward with the study.

Eileen Spencer reminded the Board that most of the people in the audience are not aware of this "Arrowrock II" project. Spencer said that Frank Cady indeed did one a few years ago. It was never agendized and no proper resolution was presented to the board for approval. It was done secretly. Spencer said that she requested this document and other filings by LMUD for the transfer of LMUD customers to PSREC. Frank Cady said that no documents existed. Spencer said that she went to the reporting agencies (CPUC and CEQA and the CPUC Administrative Law Judge DeBerry) and obtained the documents that Cady said did not exist. LMUD gave away 10% of LMUD's customers and has still to report receiving the $155,000 a year that PSREC was required to submit to LMUD annually. 

Spencer asked the Board if they somehow have slipped into Phase III of this scam because they were over $13,300 of the Phase II spending limit. Spencer told the board that Resolution 2005-06 is a Phase III event. Phase III obligates LMUD ratepayers to finance a loan through NCPA for 40% of a 10 million dollar project that has a 80% likelihood to fail in the first two years. Phase III has to be approved in open session. 

The Board passed Resolution 2005-06 unanimously. 

Agenda item E- General counsel vacancy- tabled. 

Agenda item G- Appointment of interim or acting General Manager-tabled

Although the Board did discuss hiring Sharon Edwards until July 1, as needed.  Spencer reminded this Board that on January 24, 2005, Langston, Wood and Nagel hired Les Leiber because the LMUD employees could not function without a General Manager for one day. Cady had instigated this sudden need for a General Manager after the sudden departure of Evelene Twitchell. Sargent and Cardenas were not contacted about this special Sunday meeting. 

Now Langston told the board that the employees will be okay for the six weeks until Cady arrives. Confused......you should be. Rose  Mooney asked if the Board had $100,000 to spend on a person that had resigned. She told the board that this is a poor community and that the Board should be thinking about the ratepayers first. Ms. Mooney wanted to know why Twitchell left and Cardenas said that subject was confidential. 

Agenda item H-Appointment of Engineer- tabled

Agenda item I- Hiring a Search firm for Engineer- Board decided to ask for a bid on finding a new Director of Engineering & Operations. 

Agenda item J- Dyer Mtn. EIR AD HOC committee report- Fred Nagel had nothing to report but stated that the committee (Sargent & Nagel) would have something to submit by May 27. 

Fred Nagel told the Board that LMUD could expand their customers to include providing water and sewer services to the Dyer Mountain Resort. The Westwood Community Services District will be interested in this proposal, since they provide water and sewer services to the Westwood area.   

Frank Cady was the attorney for Dyer Mountain Associates. Coincidentally, Frank Cady annexed the Dyer Mountain area in 1997 into the LMUD district. The voters passed the Dyer Mtn. resort in 2000. The DMA is not obligated to use LMUD as their electric provider. PGE services most of this area presently. 

Agenda item K-Payment of bills- all bills were approved for payment.


Frank Cady told the Board that they could remove 6 A, B, D and E. The only item that remained was "Public Employee Appointment. Title-General Manager". 

The Board adjourned to closed session and returned at 7:55 and reported that they took no action.

The meeting was adjourned. 


May 3, 2005 


LMUD hits bottom


Frank Cady bullied KWH member Eileen Spencer before the meeting started. Spencer had a tape recorder on the Press table and Cady picked it up and said that this table is reserved for the press. Spencer told him that she had a Press Pass and then put the tape recorder back on the empty table. The Lassen County Times did not send a reporter. Cady picked the recorder up again and threatened to call the police and have her removed. Spencer then put the recorder on the table in front of the Board and Cady again picked it up. Spencer told the Board that she had a Press Pass and was entitled to record the meeting. Cady blurted out that all recorders must remain in the public seating area. NEW RULE ?????  The tape recorder was on the entire time. 

The public thought that the Langston tyranny was bad.....you ain't seen nuttin'


Spencer gave the Board documents in regards to the Board failing to release public documents, 700 Forms not being complete (Cardenas, Nagel, Langston) and a copy of Resolution 90-02. This resolution states what the Board members can charge for their services. This Board is in violation of Resolution 90-02 every single month. Langston charges for e-mails. This is not an event of services. Nagel and Wood charge for two or three events that are on the same day. CPUC Code 11908 link and LMUD Resolution 90-02 link and LMUD Resolution 90-02 link prohibit this. 


The Board adjourned immediately into closed session with Carl Mycoff (headhunter for new GM). Les Leiber, Bill Stewart, Frank Cady and Cady's assistant left the meeting.

When the Board returned from closed session at 6:55, Nancy Cardenas announced that they are offering Frank Cady the position of General Manager. The Board members looked as though they had been asked to kill their first born. There wasn't a happy face on that board. Langston in particular looked distressed. The vote was unanimous to hire Cady. 

The upside: Cady, Pardee & Richey LLP goes away. New legal counsel for LMUD will be a good thing......we'll see...this board doesn't make too many good decisions. 

The Fox is in the henhouse

The Board formed an Ad Hoc committee (George Sargent and Fred Nagel) to review the Dyer Mountain EIR and report back to the Board on May 11, 2005. 

The Board approved all the bills. Spencer asked why the Board is paying Tahlia Media another $650. The Board has paid this company over $3,000 to fix the LMUD website, with no results to-date. Bill Stewart announced that this company is "redesigning" the LMUD website to be more user friendly. The LMUD website has been dysfunctional for three years. Stewart said that it would be ready very soon. 

The meeting was adjourned at 7:00 PM.



April 13, 2005


March 29, 2005 

LMUD's four minute meeting to pay bills that have not even been prepared...COST.....over $500.00

Real Cost Effective Management ?

LMUD called a special meeting to approve "unpaid vouchers". The payment of bills changes every month. It is proof that Bill Stewart and the LMUD Board have no idea what they are doing....still ? 

The meeting opened at 5:30 PM. All Board members were present. There was no representative from the Lassen County Times. Frank Cady was not present (Frank Cady's retention includes his attendance at LMUD meetings)

Item 2: The Agenda was approved

Item 3: There was no public comment.

Item 4 A: No staff response to public comment

Item 4 B: Fred Nagel reported that he did not attend the NCPA conference because of snow. 

Item 5 A: None

Item 5 B: Bill Stewart reported that the accounts payable checks did not get prepared and offered the Board "unpaid vouchers". There appears to be no normal procedure for paying LMUD's bills anymore and maybe there never was. Stewart is out of his element and the LMUD Board tolerates his incompetency? Why?

Fred Nagel questioned the Joshua Osteen claim ($1,485.23) and whether the insurance paid for this claim.  Bill Stewart reminded Nagel that LMUD has a self funding insurance program. 

No one questioned the Westwood rent check for "Railroad Management Co. LLC ($459.00) or the $28,123.54 for computer maintenance. 

A motion was made and passed, to pay all of the bills.

The meeting was adjourned at 5:34 PM. 

Darrell Wood and Wayne Langston were seen going to Cady's office with Richey after the meeting. Nagel was seen driving by Cady's office and Keri Richards showed up a Cady's office. Hmmmmmmm? 


March 10, 2005 

Public Comment: KWH member, Eileen Spencer asked to give a brief update of the "Enron" agenda item, since the public is not allowed to comment on any LMUD business agenda items. 

"The LMUD minutes show that on December 23, 2002  link, Wayne Langston and Jaimee Richey painted a pretty picture for ratepayers on ENRON. LMUD was out of ENRON without penalties or fines. There was no Agenda item to hire a law firm for any ENRON issue. ENRON had cancelled their contract with LMUD. No harm no foul. 


However, on December 20, 2002, Frank Cady had hired the law firm of Cohn,Khoury, Madoff & Whitesell LLP, without any authorization from LMUD for the purpose of  addressing ENRON's bankruptcy. link   Les Leiber signed this contract.    This was a pointless and frivolous waste of ratepayers money given the known devastation that ENRON's bankruptcy caused. In 2002/2004 this cost the ratepayers $4,537.47. 

Frank Cady puts ENRON back on the LMUD closed session agenda on April 3, 2003 (Agenda item 10 a) link  This was not a closed session agenda item. The public had a right to know if they had a chance to recover any money from the bankruptcy. The public was deprived of this informational update. The public had not been informed of ANY ENRON ACTION by LMUD. This was wrong THEN and it is wrong today.

Cady put this on the closed session agenda on February 25, 2005, Agenda item 7 2. I filed a Brown Act Violation for Abuse of Closed Sessions on March 2, 2005. 

Frank Cady put ENRON back on the March 10, 2005, but in open session, after the Brown Act was filed on March 2, 2005.Cady has offered this ENRON document link   

A source has told this website that they were told that the Enron issue was about PG&E and was a legitimate closed session issue. That turned out not to be true. 

The subject matter of the Enron document offered, at the March 10, 2005 meeting, does not appear on any LMUD Agenda from April 3, 2003 to February 24, 2004. 

LMUD does not have a contract with the Limited Liability Partnership, Cohn and Whitesell. Research confirms that LMUD has made no payments to this firm. However, Frank Cady could have hidden payments in his invoices to LMUD. 

The ENRON Bankruptcy documents state that ENRON has $63 Billion dollars of debt and has $12 million dollars in assets. You do the math ?????

Cady alleges that LMUD has been involved, on this action from October 11, 2002, link    even tho a contract wasn't signed with Cohn, Khoury, Madoff Whitesell until December 20, 2002 link  There now exists questions as to this documents authenticity. No payments to the law firm Cohn Whitesell LLP, no Judge's signature, no signature of any Enron rep., the October 11, 2002 date is in question, no court stamp.............


Board/Staff Items:

Nancy Cardenas reported that she attended the Science Fair in Redding, California. Cardenas stated that the Lassen entrants placed in the top 8 and received the "Best Sportsmanship" award.

Wayne Langston attended the CMUA conference in Coronado. He said that it was a "doom and gloom" conference. He also reported that out of 500 legislative matters supported by the CMUA only 6 were defeated. 

Les Leiber reported that he had spoken with the executive search company, Mycoff Associates and told them that Chuck Lusky had quit. Mycoff said that this might be a good thing. This way the new general manager can have input in replacing him. Leiber told the Board that he would be attending the NCPA Manager's Breakfast retreat on April 13, 2005. 

Agenda item 4 F

The Board agreed to move Agenda item 4 F, so that Tom Lee, from NCPA could give his presentation. The presentation was done via modem. The slides illustrated what energy prices would be under different scenarios. The LMUD Board voted unanimously to spend $15,000 to have NCPA write their RFP (request for proposal) for their 2006 energy needs. Tom Lee told the Board that prices are now at $65 and could go up or down. Lee said that he expected prices to go down. 

Les Leiber stated that a $65 peak price could effect LMUD's rates.

 Frank Cady asked Tom Lee if NCPA could handle this power purchase. Tom Lee said, "No, that Western Power was LMUD's counter-party (representative). (Frank Cady is LMUD's attorney).  Frank Cady asked if there was an advantage of being a "Pool" member versus an "Associate Member" as far as getting a break on the prices. Tom Lee replied "No". The Board instructed NCPA to go ahead and prepare a RFP and NCPA agreed to have a draft by the end of next week. NCPA REVENUE DOWN 66%

A power committee was formed. Wayne Langston asked to be on this committee. 

General Managers Report

On July 2, 2002, Les Leiber asked the LMUD Board to join NCPA. Les Leiber told the Board that he did not know how much the annual  membership was. Board members told Leiber that LMUD was only an associate member and they thought it was $2500 a year. 

There was a discussion on how much it would cost to be a Pool Member (a pool member is six or more members that NCPA has authority over in a joint project). Les Leiber suggested that it might be $100,000. An Associate members participates in regulatory and legislative issues. Wayne Langston said that they may qualify because of the Co-generation project LMUD is involved in with NCPA. 

Les Leiber stated that Chuck Lusky gave his resignation on February 28 and his last day will be March 15. Leiber said that Steve Trevino would help with the work and that Chuck has pretty much laid out the work already. 

Controllers Report

Bill Stewart asked that the "list of bills paid" report be included with Action item 5 F. There was no check listed for Evelene Twitchell for $100,000 on the A/P report handed out. 

General Counsel Report

Frank Cady said that ENRON had no assets and the LMUD claim was withdrawn


Agenda item 5 A 1 Approval of minutes: 

February 23 and 25, 2005 Special Board Meeting minutes were approved unanimously. 

Agenda item 5 B Consideration of Resolution 2005-04

A resolution to establish a new meeting date for the "regular" meeting. It was decided that the Board will meet on Wednesday in the second week of the month. The next regular meeting will be April 13. The Board agreed that they will continue to meet on an as-needed basis for the purpose of paying bills. Freg Nagel moved to accept this schedule, George Sargent seconded and the motion passed unanimously.

Action item 5 C- Consideration of Resolution 2005-05

A resolution of the LMUD's Public Benefit Policy. Theresa Boucher asked the Board to remove the percentages from the policy. Presently 61% is available for residential customers, 12% to Commercial programs, 16% for Community projects and 11% for the Administration. 

KWH member, Eileen Spencer, told the Board that there is over $880,000 in the Public Benefit Fund. The balance never really moves because the fund is replenished each month from 2.85 % of LMUD's gross revenues. There is not a true picture of what is spent each year. Spencer said it made since to remove the percentages because the annual needs change, but asked the Board if they would put some type of cap on the administration costs. This fund was not intended to have the administration costs skyrocket because there was no way to control costs. The Board said no and voted to take all of the percentages off. (This account will continue to be monitored very very closely).

Agenda item 5 D Consideration of approval of Staff Augmentation and Equipment Lease Agreement with PAR Electrical Contractors. 

Fred Nagel made a motion to accept, Langston seconded and the motion passed unanimously

Agenda item 5 E Consideration of Contract with Martin Security to move Video Equipment.

Eileen Spencer complained that a NINE PAGE CONTRACT was prepared by Frank Cady and the contract was for $1348 to move equipment in the LMUD office. Spencer suggested that Les Leiber certainly had discretionary funds for the maintenance of the LMUD office. Spencer also suggested that this now included "legal fees" for simple maintenance work and that this type of management decision makes them look bad. 

Does this mean if the toilet plugs up they have to call a Board meeting to have Frank Cady write a nine page contract that would then need to be approved by the Board?


This LMUD Board continues to engage in unsound business practices

Frank Cady's response was that it took him an hour to complete and that it was about $100.00.

This was a "Template" form that could have been filled out in about ten minutes by a secretary. The point is that Frank Cady keeps "re-inventing himself" at a HUGE COST TO THE RATEPAYERS. 

The Board approved this contract unanimously. 

"Lord love a Duck"!!!!!!!

Agenda item 5 F: Consideration of paying bills

The Board approved paying the bills unanimously

Board adjourned to Closed session.


March 3, 2005 

Meeting cancelled


February 25, 2005 

The LMUD meeting started promptly at 3:00 PM. All Directors were present.

Frank Cady tells the Board that he wants to delete closed session items 7(1) and 7(3). 2/25/05 Agenda     Amended  2/25/05 Agenda

Public Comment: Eileen Spencer gave the Directors three handouts. GM Recruitment   Facts for General Manager to Know General Manager Qualifications    

         General Manager authorizes power purchase           Assist. General Manager Position   


The representatives from Mycoff & Associates were introduced. This company is being paid a minimum of  $30,000 to find another General Manager.

Mr. Mycoff asked the Board what they are looking for in a General Manager.

Wayne Langston told them "Customers aren't so much concerned about how much it costs, but if they get it"

The Board was asked what the potential of growth was. 

Wayne Langston said "We are destined to be a residential growth community and that doesn't pay the bills." 

Nancy Cardenas went into a lengthy discussion about the need for a General Manager that has very good financial skills. She told the public that LMUD is in need of cash and  "very soon THEY WILL need to add to their debt by trying to find more COP's."  






Abuse of Closed Sessions

The Agenda also includes new "exposure to litigation" and a discussion of the Enron Bankruptcy, which LMUD is not a party and the appointment of a General Manager.  Cady added this later in the day. 


Frank Cady has placed the Enron Bankruptcy for closed session discussion.  If the Board hears this in closed session, this is a Brown Act Violation. Since LMUD is not a named party to this litigation it becomes public information. Information that the public is entitled to hear in open session. 

It turns out that Cady just put those closed session items on the Agenda to impress the Head Hunters.  Pure immaturity..........

Cady quickly took 7(1) and 7(3) off the agenda, but his arrogance wouldn't let him take the Enron issue off 7(2). 

 KWH has sent a warning letter to the LMUD Directors. The constant and deliberate mistakes that this Board is making, on the advice from Frank Cady, is unacceptable. 


To further show his arrogance, Cady invited the two Mycoff gentlemen to stay and meet with the Board after the meeting adjourned. 

Unfortunately, a Brown Act Violation will be filed, but the game-playing will be duly noted. 

February 23, 2005 

Board Attendance: George Sargent, Nancy Cardenas, Fred Nagel

The LMUD Board of Directors discussed giving Al Vazquez some type of "recognition" award. Fred Nagel told the Board that Vazquez was recently moved to the Lake Almanor district. Al Vazquez worked at the Eagle Lake District in the Lassen National Forest as a forest ranger. 


Bill Stewart stumbled thru a quick report that he is still looking for a place to invest the Districts funds for a higher yield. He said that one year Treasury Notes are now yielding 1.85% and he has contacted the bondholders for approval. Stewart told the Board that the District holds only 10% in reserve ($785,000) of the COP fund. Stewart claimed that the rates are going up and that a longer term would not be wise.  In the meantime, he has done nothing.

Les Leiber's contract is for $10,000 a month with full benefits. Les inappropriately submitted an expense report after only working one day. link

Les Leiber told the Directors that he was not going to the NCPA conference because there was nothing of interest on the meeting agenda. Les Leiber told the Board that LMUD is only an Associate Member.  So ?    There is only one thing that this means, Frank Cady, not Leiber,  is pushing to upgrade yet another expensive redundant MEMBERSHIP. LMUD JOINS NCPA

Les Leiber told the Board that there wasn't enough money to complete the projects scheduled for this fiscal year. 


TRANSLATION:  They can't use the COP money that is earmarked for these projects (COP fund is being used to stay in compliance with the bond covenants) and LMUD DOESN'T HAVE THE CASH..............

The Board was reminded that there will be a Special Meeting on February 25, 2005 at 3:00 PM   The executive search firm that LMUD hired will be flying in to take a tour of the District (?). 


 5 A 1.  The Board approved the January 24 and February 9, 2005 minutes.

5 B. Cost Containment Concepts Agreement ( LMUD Health Benefit Administrator).  Eileen Spencer asked the Board if they had read this 1/2" thick document. George Sargent said that he had "scanned it briefly", Cardenas and Nagel just stared and did not respond.  Nancy Cardenas asked Bill Stewart how the payments would be made in the new contract.  If Cardenas had read the document and for that matter had any of the Board members read the document: page 7 states:

" Every week, the Claims Administrator will notify the Plan Sponsor of the amount of processed claims. This notice will identify the funds to be deposited to the Claims Payment Account to pay the Claims liability as these Claims occur. The Plan Sponsor will fund maximum liability monthly." 

Bill Stewart told the Board that the account "transfers" will be made through U.S. Bank. 

LMUD, prior to any contract with Cost Containment Concepts (Cady failed to obtain a contract in 2001), paid a premium of $80,000 a month. Claims were paid from this amount. A $300,000 reserve account existed. LMUD and the Administrator had full knowledge of the legal requirement to have a reserve account. The $6,000 Audit was a ruse.  The Auditor said that there were irregularities and that claims submitted had been overpaid or paid incorrectly.........This needs to be investigated. 


The Board approved this contract   WITHOUT READING IT. 

The Auditors reprimanded the Board for expenditures without executed contracts and for the $1.2 million of spending in excess of the budget (Operating Expenses). 

5 C. Issue Request For Proposal for new Auditor 2004/2005.

Nancy Cardenas informed the Directors that she had received an e-mail from Wayne Langston requesting that the Board consider "rescheduling" this Agenda item until he and Darrell Wood could attend.  

Frank Cady was trying to influence the Board by telling them that Steve Pezzullo could sue LMUD for Breach of Contract. 

Eileen Spencer asked the Board if they had a copy of the "unsigned" three page letter from Steve Pezzullo that Cady was representing as Pezzullo's contract. They said that they did not have a copy. Spencer reprimanded the Board for not having a copy of this document. Spencer asked why they weren't provided a copy of this contract by Frank Cady. Spencer offered her copy of Pezzullo's contract but the Board was not interested.

 Pezzullo & McKenzie  11/15/01 "contract"

Frank Cady gave the Board a 20 minute dissertation of the three page "contract" with Pezzullo & McKenzie but never offered copies to the Directors. This Board should be able to be trusted with interrupting three pages of simple descriptions of services and fees. Nancy Cardenas asked Cady how much money was left on the five year "contract". Cady misspoke and told the Director "around $26,000 a year". Bill Stewart corrected Cady and said that the 2004/2005 year was $30,100 and the final year 2005/2006 was $31,600.

At no time did Frank Cady offer the Board a copy of the three page contract ?

Frank Cady over-emphasized that Steve Pezzullo would file a lawsuit if LMUD reneged on this agreement. Cady said "If you breach a contract you pay the consequences".

A complaint has been filed with the District that Frank Cady has breached his contract with the District


Frank Cady told the Board that they have to be concerned with an Auditor that is up to-date with current laws, as though he was questioning Pezzullo & McKenzie's skills and qualifications. 

Cardenas asked Bill Stewart if he was comfortable with his knowledge of the new accounting laws and requirements.  Stewart told Cardenas that he was a member of AICPA.....but did not answer the Directors question. 

In 2002, this Board was more than pleased and satisfied with the performance and skills of Pezzullo & McKenzie. 

December 3, 2002 Audit Presentation

The Board moved and seconded,  that an RFP would be issued for an Auditor for the 2004/2005 fiscal year. Nancy Cardenas instructed Bill Stewart to write the RFP. 


Eileen Spencer told the Board "that this was a vindictive act and that just because they faced the truth about their total screw up in managing this utility they wanted to fire Steve Pezzullo. You all are to blame. You never had control over the finances and you have a Controller that doesn't have a clue what he's doing. You just don't seem to care"

5 D. Consideration of issuance of RFP for 2006 power purchase.

Les Leiber told the Board that the prices of energy are now moving up. He told the Board that he would like to go shopping for the Districts needs of the 2006.

Frank Cady began telling the Board that they should authorize Leiber to sign power contracts. 

Eileen Spencer told the Board that Darrell Wood, Wayne Langston and Cady have done this song and dance before. 


It was dejavou. Resolution 2001-4 authorized the General Manager to sign power contracts.  Cady also brought this up at the April 3, 2003 meeting and the Board passed a motion that allowed the General Manager to sign power contracts. Frank Cady told the Board that Spencer  was wrong  LMUD meeting 4-3-03

The Board passed a motion to allow the General Manager to issue an RFP, not to exceed $15,000.

5 E. Consideration of Resolution 2005-02-A resolution to establish a policy regarding the payment of routine salaries, wages, and demands for power purchases. Recinds 2002-03 



It was moved and seconded to approve this resolution. Eileen Spencer questioned the ability for this Board to make good decisions and asked the Board to look closely at the person who suggested the recent changes that caused complete chaos in paying the Districts bills in the last few months. 

Consideration of Resolution 2005-03: A resolution to establish a policy and procedure for signing checks,  was combined with this motion. 

The Board passed this motion unanimously.

5 G. Approval of payments. A motion was made by Fred Nagel and seconded by George Sargent. This motion was passed unanimously. 

The Board adjourned to closed session.

6 1. No reportable action.

6.2 The Board reported that Evelene Twitchell has been released and that the terms of this release will be available to the public. 

Meeting adjourned


February 9, 2005


Nancy Cardenas reconvened the meeting at 6:05 PM and immediately wanted an explanation why the, Sunday, 1/30/05 meeting was held. She told the Board that she felt that George Sargent and her were intentionally left out and she saw no urgency to holding this Sunday meeting. George Sargent expressed his "disappointment" in the decision to hold this meeting on Sunday when they knew he and Nancy would be gone.

Cardenas wanted to know who called this meeting. She was told that Frank Cady had called the meeting. Wayne Langston stumbled through a weak excuse that the employees were upset about not having a general manager. 


Fred Nagel offered the fact that "the Board would have hired him anyway"............  No one bought into that excuse and it was not even a relevant excuse. Individual Board members do not have the right to speculate on other Board Members future votes. 

Wayne Langston then  apologized for their actions.  

The Board was reminded, by a member of the public,  that when the General Manager is ill or takes a vacation that business goes on as usual. There was no believable excuse, for what Langston and Wood tried to do.  


Bill Stewart again presented slides on the financial condition of the District. LMUD is having a very definite cash flow problem. This equates to....they are having trouble paying their bills. It is really unfortunate that the public cannot comment on this agenda item. Bill Stewart makes comments on items that are simply not accurate. Two comments stand out, " Some bills are paid because we loaned money to customers"....????     "The Operating Assets are bumped up and are not accurate".  Now true, this is out of context, but honestly.....there was no context.  

Fred Nagel answered a question from Darrell Wood. Wood was concerned with the labor used for capital improvements after the project was completed. Fred Nagel explained that LMUD was paying for these capital improvements with unrestricted funds (cash available from daily receipts) and once the project was completed LMUD continues to pay for this labor from the cash received each month. ..... STUPID, STUPID, STUPID. 

The Board approved meeting minutes for 12/29/04, 12/29/04, 1/6/05, 1/18/05, 1/20/05, 1/30/05.  


There was no mention of 1/24/05 meeting. This was the last meeting Evelene Twitchell attended or was last seen

The Board approved renewing the Agreement with Hunt Technologies. A copy of the contract was included in the Meeting packet. 

The Cost Containment Concepts Agreement was pulled from the Agenda. Bill Stewart stated that they are using up the Reserve Account by not paying the bill (average monthly health benefit premium $80,000).

A member of the public, Eileen Spencer, asked that the Board be more consistent in presenting contracts to be approved. The Board was told that discussing a contract with the intent to approve and sign, without providing a copy to the public should be discontinued. Legal counsel is responsible for the inconsistency of "what" contracts are not presented and what contracts need to be kept from public review. (i.e., Arrowrock MOU and the PSREC/LMUD transfer of customers)


The Board approved an Agreement with DMV to continue an "Employer Testing Program. Paul Glau has been in charge of this program and is required by law to continue with it. 

Nancy Cardenas told the Board that they may not continue using Pezzullo & McKenzie as their auditors. Frank Cady gave  Cardenas  a copy of the Sarbanes Oxley Act (inacted July 30, 2002).

This is a Federal Act that requires stringent financial controls on publicly traded companies. The Act is named after the architects, Senator Paul Sarbanes and Representative Michael Oxley and came about after the Enron scandal.  The Sarbanes-Oxley Act itself is organized into 11 sections. Sections 302,404, 401 802 and 906 are the most significant sections with respect to compliance with internal controls. 

Ms. Cardenas pointed out that, although we are not under the Sarbanes-Oxely Act, it is becoming the standard. Ms. Cardenas pointed out that the District should not have a "contract" with Pezzullo & McKenzie but a "Letter of Engagement".  She stated that a contract with an auditor creates an environment of "non-independence".   Frank Cady disagreed with her and said  "A rose is a rose of a different color". ????? 

While it would be nice to give Cardenas credit for coming up with a reason TO FIRE STEVE PEZZULLO, it seemed that the LMUD Board had clearly rehearsed this.   She told the Board that they had to do something because of the "BAD AUDIT" they received from Steve Pezzullo.  

Steve Pezzullo took quite an exception to the term "BAD AUDIT", and demanded that Ms. Cardenas resign.    Pezzullo angrily told Cardenas that she was the Treasurer during this period and that she should resign. He also told the Board that just because they had to deal with the  huge mistakes they have made, that doesn't make the audit BAD just TRUTHFUL. Steve Pezzullo then left the meeting. 

Eileen Spencer was recognized and complimented Steve Pezzullo on his honesty and courage to give a true picture of LMUD's lack of management and financial controls. 

The Board continued the discussion of canceling the remainder of Pezzullo & McKenzie (now Pezzullo & Gusset) five year contract. Frank Cady made an inane comment concerning the fact that he did not include "a back door" for the LMUD Board to get out of their contract with Pezzullo & McKenzie.

Nancy Cardenas suggested that the Board release an RFP for an Auditor for the 2004/2005 fiscal year.  It wasn't a coincidence that Frank Cady would bring to the Board's attention a conflict with the Pezzullo contract. 


The Board moved on to approve Resolution 2005-01 whereby they are eliminating the General Managers' signature on checks. Eileen Spencer asked if they will continue to require approval from the General Manager for accounts payable checks & payroll checks prior to the Board signing the checks. Frank Cady suggested that the Board could reduce the required signatures to one..................   So much for checks and balances........    The Board is attempting to continue to tighten the exposure of their spending. 

Eileen Spencer had an opportunity to ask Bill Stewart about the failure to disclose wire transfers since October 2004. Bill Stewart responded that it must have been an "oversight".    

The Board approved the paying the bills. 

The last Agenda item was a discussion on scheduling a "second regular Board meeting each month".   Each Board member relayed their preferences but no decision was made to go forward. Comments from Herb Grutgen were allowed. Mr. Grutgen explained that..... having a moving date for an additional regular meeting would not be fair to the public. He told the Board that the public would not be able to calendar a roving date. Cardenas basically tabled the discussion until a Resolution could be written. 

Eileen Spencer was recognized to make a comment before the Board went into closed session.

Ms. Spencer stated that she would file a Brown Act Violation if the 

Board discussed Frank Cady's performance in closed session. The Brown Act does not allow "independent contractors" status to be discussed in closed session. Spencer told the Board that Frank Cady is not an employee by the very definition of his contract and tax laws.

The Board placed an evaluation of Frank Cady as "Public Employee Performance Evaluation" on the 2/9/05 Agenda. 

The Board has exposed themselves to years of unpaid employee and employer taxes. An independent contractor can be an employee only if they receive a paycheck with the proper tax deductions withheld.  Frank Cady has never received a paycheck and therefore is not an independent contract employee as stated in the Attorney General's Opinion. 

Frank Cady advised the Board that he was a public employee and could have his contract and evaluation done in closed session. 

The Board then recessed into the closed session without excluding Frank Cady from a Public Employee Performance Evaluation. 


February 3, 2005



January 30, 2005

Les Leiber is asked to be LMUD Interim General Manager


Lassen County Times did not send a reporter,

The highly unusual Sunday LMUD meeting did not seem to have a quorum. It appeared that Langston and Wood were going to hold the meeting without a quorum. They absolutely did not expect anyone from the public to attend this meeting. They waited a half hour, hoping that the public would leave. They didn't. It was a very awkward half hour. Langston was heard saying. "We'll wait until 5:30 if we have to, they won't wait that long."

When Les Leiber arrived he quickly turned down the hall and went into the lunch room. He appeared startled that anyone from the public was there. 

George Sargent and Nancy Cardenas were out of town and Langston said that he thought Fred Nagel was in Reno. Finally, Frank Cady gets up and leaves the room. When Cady returned he announced that Fred Nagel would be there in ten minutes. Fred Nagel finally arrived looking like he had just been awakened from a nap. The meeting started at 4:30. The meeting immediately adjourned to the closed session. 

The Board announced the appointment of Les Leiber as the Interim General Manager.


The Grand Jury determined in the 2000/2001 report that LMUD cannot discuss and determine an appointment in closed session. 

Page 33, "The LMUD Board of Directors appointed a member to fill a vacancy resulting from a resignation. Initially, the discussion and selection of the new member was conducted in a closed meeting, which the Lassen County District Attorney determined was a violation of the Brown Act."

"Once the DA notified the LMUD Board of his determination, the LMUD Board acted quickly to void the original determination and then reconsider the filling of the vacancy at an open meeting. The Grand Jury determined that the Lassen County District Attorney acted properly in the way this issue was resolved."






LMUD will hold a special meeting on SUNDAY, January 30, 2005. There is no urgency that warrants a meeting on a Sunday, so it is speculated that they have another agenda for this 4:00 PM meeting. 

If the catering truck rolls up and the beer kegs are brought in, then everyone is invited to A PARTY.

The Agenda Item:  Appoint an Interim General Manager LINK

Twitchell said that she was leaving March 15

There are odds that this Board will bring back Les Leiber because he is a "Good Ole Boys" player.  



Twitchell's "SECRET" departure was not decided on Monday, January 24, 2005. The LMUD Board has had her "separation agreement" on three separate meeting Agendas. Twitchell contract history

The Board went into closed session for one hour, but announced that it had no reportable action.   Meyers/Nave Brown Act Seminar  

Agenda Item 5. Closed Session. "Public Employee Release Pursuant to Government Code 54957.  "No reportable action"


The Brown Act, 54957.1(a)3 A states: "If the legislative body accepts a settlement offer signed by the opposing party, the body shall report its acceptance and identify the substance of the agreement in open session at the public meeting during which the closed session is held".

The Board reconvened to open session, but skipped over Agenda item 6 (Twitchells separation agreement)  Agenda 6 B. "Consideration of Approval of General Manager's Separation Agreement and authorization for President to sign. 

The Board moved to approve the contract to hire a firm to search for a new General Manager. LMUD will have to pay 28% of the new GM's salary or a minimum of $30,000. In addition, LMUD will pay for all of this firm's expenses. There didn't appear to be "cap" on those expenses 

The Brown Act, 54957.1(a)3 A states: "If the legislative body accepts a settlement offer signed by the opposing party, the body shall report its acceptance and identify the substance of the agreement in open session at the public meeting during which the closed session is held".


The Board has no right to offer Twitchell ANYTHING. 

The Board then moved on to the last order of business, paying a few bills.  The Board approved the payments. 

The LMUD Board won't have to ask to be paid for phantom  meetings  this month. They are calling special meetings every other day. 

Langston has charged the District for e-mails (not a legal event). Cardenas has charged the District for meetings with other Directors that didn't exist. Nagel is now charging for two events in the same day. (Not allowed under CPUC, Division 6). Twitchell approves these payments to the Directors. 

Will the LMUD Directors still try and find a way to buy her silence?



January 20, 2005

The LMUD Board calls for another special meeting to conduct the General Manager "separation agreement",  but removes this Agenda item, at the opening of the meeting. 


Agenda 5 C:

"Consideration of Approval of General Manager's Separation Agreement and authorization to sign" 

Evelene Twitchell submitted her resignation at the December 29, 2004 LMUD meeting. The Audit Report was released the week prior revealing evidence of severe mismanagement on Twitchell's part.  The report severely criticized the LMUD Board of Directors for their handling of the Districts finances.

The Brown Act (54957.1 (a)(5) states that any action to appoint, employ, dismiss, accept the resignation, or otherwise affect the employment status of a public employee in closed session shall be reported at the public meeting during which the closed session is held

The LMUD Board of Directors violated the Brown Act by not announcing her resignation after reconvening.  They are trying to change her contract in order to try and give her three years of compensation plus benefits.  Twitchell contract history

         Pay her $388,800 for her complete failure....................not a chance. 


If the Board even tries to change her contract now, this will be a clear case of  >Gift of Public Funds and Abuse of Discretion<

The Board also discusses hiring an executive search firm. Two firms were considered, Mykoff & Associates and Shannon Executive Search (now CPS Executive Search).  This will cost the ratepayers over $50,000 in fees. The ratepayers must remember the cost to find and hire Twitchell two years ago. 



Twitchells Original Contract

(Les Leiber showed up at the 1/6/05 meeting?  Leiber will "co-operate" with the "old ways")

The Brown Act;54957 states- Closed sessions held pursuant to this subdivision shall not include discussion or action on proposed compensation except for a reduction that results from imposition or discipline.

Has compensation been discussed prior to this appointment. If so, there has been no public disclosure of such compensation nor any disclosure of hiring a new general manager.   

Twitchell doesn't get run out of town on a rail..but quietly leaves..and LMUD sneaks around to hire new General Manager.  Five in four years...could there possibly be something WRONG with the Boards decision making ability....? 

Closed session appointment      KWH OBJECTIONS      

NO CHANGES TO TWITCHELL'S CONTRACT- SHE GETS $0 WHEN SHE LEAVES. Anything else is "a gift of public funds"   link   


January 18, 2005 Agenda                      January 20, 2005 Agenda

The meeting was delayed due to Nagel, Wood and Langston coming in late. Nagel came in and told Cardenas that Wayne and Darrell were still with Jaimee Richey and that they would be right over. Jerri Kresge was asked to call Richey to see how much longer they would be. Fred Nagel told Cardenas that they will go over to Cady's office after the regular session is recessed and then reconvene in the LMUD Board Room.

KWH handed out a letter to each Board member and asked that Jerry Kresge be informed that she must release the Boards closed session action to the public. Ms. Kresge has refused to release the Boards announcement after closed sessions in the past. The Board left and walked over to Cady's office. 

There was a woman waiting at Cady's office and she was asked if she was the new General Manager. She responded, "No, I am here on another issue". She knocked on Cady's door but no one answered. Her name was Stacey.  She said that she had driven from Reno. A few minutes later Richey and all five Board Members arrived. Richey lobbed a few vulgar remarks and slammed the door.  Richey is not known for her maturity or sophistication..........






January 6, 2005-Regular Session




Closed Session 


LMUD held a closed session  meeting , at 5:30 PM, prior to the regular meeting.  There was never a proper meeting, but what is a Brown Act Violation among friends. The meeting was never opened properly. The public was asked to wait in the Break Room. 

The LMUD Board reconvened at 6:30 PM to announce any action by the Board. 

 Nagel announced that there was no reportable action......and then proceeded to tell the public that Frank Cady had been instructed to prepare "separation" papers for Twitchell.  This announcement lends a new meaning to "no reportable action". 


The regular meeting was delayed one hour, due to the previous meeting by the LMUD Board to discuss "HOW" Ms. Twitchell will leave. Her contract states that she is not entitled to compensation or benefits if she resigns......Now why would LMUD consider adhering to a signed, executed contract.....they haven't done it in the past. They will make some under-the-table deal with her, as they did with John Baxter.

Les Leiber attended the meeting. It would be typical to bring back an old General Manager. Typically, LMUD hires ex-General Managers as "CONSULTANTS" so that compensation can continue. Les Lieber may resurface........ he simply wasn't as bad as Twitchell. She may very well be the worst of the worst. 


Herb Grutgen asked the Board to be honest and report the truth. He asked this Board to report all of the costs of Arrowrock, including all legal costs which were the biggest portion of the Arrowrock project.  link  Mr. Grutgen told the LMUD Board that by buying all of the Hot Water Heaters, that they created an unfair competition for local merchants. He suggested that the Board should have just given ratepayers rebates to buy the Hot Water Heaters. All Susanville merchants would have benefited. Mr. Grutgen also gave the LMUD Board a list of questions that he wanted answered about this public utility and requested that they be answered at the February meeting. Mr. Grutgen was thrown out of a meeting because the LMUD Board refused to answer questions about Arrowrock. Those were the "Bully" Langston days, where Langston threw anyone out that called him on illegal procedures....... 

INFORMATION ITEMS (public not allowed to participate)

Agenda Item 4 A- Board & Staff Response to Public Comment- None

Agenda Item 4 B- Board & Staff Items: Twitchell asked if anyone was planning on attending "Legislative Day". Langston said that he had "calendared it".... No one else was planning on going. 

Agenda Item 4C- General Managers Report 

            1. Report on Operations Update: Twitchell gave the crews a "well done" for their work during the storm. She reported that she had hired an apprentice.  George Sargent added that he had someone in mind and if this person could submit an application. Twitchell then repeated that she had hired someone and that pending a drug test and physical, he had been hired.

            2. Report on Meetings Attended: Twitchell said that she had attended no meetings.

            3. High Sierra Generation Project Update: Twitchell said that the project should produce 5-15 MW of power. The power would heat the prisons hot water and the remainder of power would be for LMUD and PSREC (?). A $10,000,000 investment for ....maybe...5 MW of power to LMUD ratepayers. Does the Lassen College co-generation debacle ring any bells. Same Same.  She stated that LMUD can spend up to $44,000 on this "FEASIBILITY STUDY". Problem: They have spent over $60,000 to-date.  IS THIS WHY SHE IS NO LONGER THE GENERAL MANAGER?

Agenda Item 4D- Financial Report- You will no longer see "Bills Paid" under this agenda item. The Auditors said this is a NO NO. Nancy Cardenas chimed in that she didn't like it there in the first place. PLeeeeeese. Ms. Cardenas never said anything when a member of the public was thrown out of the meeting because they objected to the BILLS PAID put on the Agenda as an "INFORMATION ITEM" so that it wouldn't be an ACTION item where the public could comment on LMUD's reckless spending. NOT A WORD FROM CARDENAS and she was the Treasurer at the time. Go figure. Has she put her hat in the ring for "PRESIDENT OF THE BOARD"? 

Wayne Langston asked Bill Stewart if he had found out what the erroneous entry was ($1383-Land and Land rights).  Bill Stewart said that it was corrected and that it was just an incorrect entry by an employee. Where was the supervision and checks & balances? Where was Stewart? Why did it get in the Financial report? 

Agenda Item 5 A 1- Approval of 12/8/04 & 12/22/04 minutes.

Wayne Langston said that there was a typo on page 5. He stated that it should be Nagel that called a recess not him. There was a motion and second before the Board and ....but they never took a vote.  Frank Cady, LMUD parliamentarian and $300,000 a year attorney never blinked an eye to correct it. 

Agenda Item 5 B- Receive and Accept Report of Election Results.   A motion was made a seconded.

PUBLIC COMMENT:  KWH Member, Eileen Spencer, stated to the Board that KWH has asked the Lassen Superior Court to convene a Criminal Grand Jury for the purpose of looking into the Boards activity five days prior to the November 2, 2004 election and other irregularities. 

The motion was passed unanimously. 


Agenda Item 5 C. -Issuance of Certificate of Election and Administration of Oath of Office.  

Agenda Item 5 D- Selection of Officers for 2005. To be effective at the next Board Meeting. 


Fred Nagel was nominated to continue as President. He declined and said that it was a lot of work. Wayne Langston was nominated and declined and said that he couldn't spend the time. Darrell Wood was nominated and declined. George Sargent was nominated and declined. Well, then there is Ms. Cardenas. Who said that she would take it but couldn't attend all of the meetings required. 

This was soooooooooooo rehearsed. It was your classic dog and pony show.   You have to know the characters to appreciate fully this performance.  The December 22, 2004 meeting was a clear indicator that Cardenas had already positioned herself for the Presidency. She was yelling at the Auditors, she had opinions about every issue......even tho nothing she said made in sense or had any intelligent revelation or direction and must have been embarrassing. She was going to look presidential......no matter what !!!!

Predetermined Results:  President, Nancy Cardenas; Vice-President, Wayne Langston; Secretary, George Sargent; Treasurer, Fred Nagel and Director Darrell Wood. 

Agenda Item 5 E-Receive Public Comment on 2003/2004 Audit.

PUBLIC COMMENT:  KWH member, Eileen Spencer, read a list of issues that LMUD ratepayers have faced for the past two years.  The list had been derived directly from the Auditors opinions. She asked that the Board let her finish without interruptions. The Board granted this request. 

Wayne Langston asked Ms. Spencer if these were comments from KWH or her. Ms. Spencer responded that it was KWH.

Wayne Langston jotted this response down authoritively as tho Spencer's comments were reprehensible. Langston simply did not realize that the comments came directly from the audit documents. How sad that Langston has no comprehension of the severity of this Audit Report. 

Agenda Item 5 F-- Discussion and possible action regarding Auditors findings and Managements response. 

Wayne Langston wanted to talk about the four page "qualified" opinion and LMUD's response to these opinions.  He wanted to know why the LMUD Management responses were not addressed by the Auditors. Julia Gusset, responded very clearly: Because we did not agree with your responses. 

It was unfortunate that the comments by Bill Stewart, with regards to the Cost Containment Concepts account, were totally false. It was unfortunate also that the Board would not allow comments from a member of the public that had direct information on the false statements made by Bill Stewart. The Board has decided to not pay Cost Containment Concepts the monthly $80,703 (this represents a premium on 46 LMUD employees and Frank Cady, for dental and health insurance claims). Stewart told the Board that the premium was $89,000 which was incorrect. Stewarts story about the way this account was handled was justifiable because if he hadn't come up with this ridiculous lie, ....he would have been blamed for mishandling LMUD account. Bill Stewart has committed such gross incompetence it is hard to believe that he, is in fact, still employed. 

Agenda Item 5 G-Consideration of (1)Execution of the WSPP Agreement and authorization to sign (2) Issuance of a check in the amount of $25,000 payable to WSPP; and (3) Selection of LMUD's member and alternate member representative to the WSPP Executive and Operating Committee.

This was highly objected to, on December 22, 2004. This was nothing but an extremely expensive and "useless" membership. This was approved after the LMUD Board was told that they had overspent their operating budget by $1.2 million dollars. This $1.2 million was simply.....irresponsible and reckless disregard for the financial stability of LMUD

Frank Cady bent all rules, in order to get his foot in the door and start pretending to be "THE BIG MAN"  LINK

............and also, Bill Stewart complained about a cash flow problem. This is a utility that will have a bad ending for the ratepayers. 


Twitchell explained that the Susanville Indian Rancheria will receive 20% off their utility bill under this tariff if their utility bill remains under $5,000 per month. Twitchell reported that their bill is well under this amount. Langston made a motion to adopt this, Cardenas seconded.


Motion passed unanimously.