By Mark Gutglueck
A relatively unique power struggle is playing out between a majority of the members of Upland City Council and the San Antonio Water Company over the direction the company wants to take in managing its assets. The matter is complicated by the consideration that the City of Upland is a majority owner of the company’s stock, and as such is seeking to impose its will on how the company is operated.
Despite the city’s majority interest in the company, its past and especially recent-past mismanagement of its own water division operations, which have included the imposition of what many of the city’s residents consider to be exorbitant rate hikes, is leaving the city council and senior staff members vulnerable to countercharges that could expose City Hall to revelations of incompetence that would potentially have far-reaching political consequences in the City of Gracious Living.
The San Antonio Water Company was created by the City of Ontario’s founder, George Chaffey, and was incorporated on October 25, 1882. It exists today as a California mutual water company organized under the California Corporations Code.
Over the years, the City of Upland, which has two wells of its own, has accumulated more and more of the San Antonio Water Company’s stock, such that at present it owns 4,341.25 shares, or 67.95 percent, of the outstanding 6,389 shares in the company. The remainder of the company stock consists of 623.5 shares divided among slightly more than 1,300 homeowners in San Antonio Heights, 329.75 shares in the possession of the Monte Vista Water District, 295.25 shares controlled by the City of Ontario, 218.25 shares owned by Red Hills Golf Course, Holiday Rock Company’s 132.25 shares, 50.25 shares among remaining citrus grove owners, 10 shares belonging to the Red Hills Homeowners Association and the Cucamonga Valley Water District’s 4 shares. Upland’s water division relies not solely, but in significant measure upon the San Antonio Water Company as its water provider, with the Metropolitan Water District being its other primary supplier, augmented by the West End Water Company, another mutual, 90 percent owned by the city and operated directly by the city.
In addition to supplying roughly two-fifths of the water used in the City of Upland, the San Antonio Water Company is the sole water source for all of San Antonio Heights, an unincorporated pocket of county land located north of Upland.
With its wells and aquifer lying toward the eastern extreme of the foothills at the base of the San Gabriel Mountains, which includes Mount San Antonio, also known as Mt. Baldy, Ontario Peak and Mt. Harwood, the San Antonio Water Company has ready and reliable access to a substantial amount of water. The company does not import any water. Instead it is dependent on the local San Antonio Canyon watershed and groundwater basins. In this way, the San Antonio Water Company delivers an acre-foot of water, enough water to cover an expanse of one acre to a depth of one foot or 325,851.4 gallons of water, for $296, treated or untreated. In comparison, the Metropolitan Water District, which serves as the water purveyor to 19 million people in six counties, including a majority of the cities in Los Angeles County, as well as to Upland, charges $731 for an untreated acre-foot of water and $1,050 for a treated acre-foot of water. The City of Upland, which owns the conveyance system for the water that is provided to the household, commercial and industrial water users in Upland, has variable water rates intended to encourage water conservation that range from $901.75 per acre-foot at the lowest unit cost to $1,420.15 per acre-foot at the high end. Thus, unbeknownst to the vast majority of Upland residents/water customers, the city marks up by at least 304 percent the water it receives from the San Antonio Water Company before passing it along to its residents and businesses.
At present, the water company, which involves 10 wells, four steel tanks and one concrete basin for domestic water storage, four concrete reservoirs for irrigation water storage, five reservoirs, six booster stations, two surface water intakes and 25 miles of pipeline located primarily north of the City of Upland or in northernmost Upland, is headquartered in a more than 90-year-old 1,200 square-foot home sited on a 7,400 sq-foot property on Euclid Avenue between 8th and 9th streets. Its corporate yard is on a 14,000 square-foot property near downtown Upland on First Avenue. The company has been looking to consolidate facilities since 2015.
Brian Lee, the general manager of the water company since 2018, explained what is pushing the company’s move to upgrade its holdings.
“The primary reasons behind our efforts are the age and condition of our existing facilities,” Lee said. “The administration building was constructed in 1928. The operations building was constructed some time prior to that and housed the blacksmith and mules used to pull the trolley up Euclid Avenue. The blacksmith’s pot-bellied stove and anvil are still located at the company yard. Until a couple years ago, the pot-bellied stove was the only heating, ventilation and air conditioning unit at the operations building. The company utilizes both buildings. The administration building acts as the hub of the company, a central location for planning, organizing and strategizing. It also serves as the public face of the company where shareholders come to conduct business. Additionally, the administration building houses company hardcopy records (on paper) and our electronic records (data servers for company files and billing records). The operations building is where we store our trucks and parts for pipelines and pumps. It is our warehouse. If either one of these buildings became inoperable, service to our shareholders would be impacted. This impact will be even more dramatic in a catastrophic event such as an earthquake.”
Lee continued, “Given the age of these facilities, it should not be surprising that structural and design issues exist. Of primary importance are seismic deficiencies and Americans with Disability Act deficiencies. The administration building is a block-wall design with questionable structural steel (rebar). The technical understanding of seismic events has improved significantly since the 1920s and current building codes reflect that understanding. The operations building is a wooden structure with an unknown foundation. The company could conduct a forensic review of the two buildings, but the study would just confirm that a 100-year old building is not constructed to modern codes.”
Moreover, Lee said, “The Americans with Disabilities Act requirements are even more pressing, given that the Americans with Disabilities Act is the law and there is no ‘grandfathering’ for older buildings. If we conduct public business, which we do, then we must comply with the Americans with Disabilities Act. Ramps, steps, doors, bathrooms and hallway widths are all deficient. Modernizing the administration building to conform with Americans with Disabilities Act requirements would be impossible without giving up critical space and would require moving all administration functions to another location during construction and then back again. It is apparent to me that consolidating company functions onto a single property would serve multiple purposes; needed modernization of our buildings and increasing efficiency between staff and shareholders.”
In 2016, the company derived a preliminary budget for a new company campus combining the administration and operations functions at one site and obtained architectural renderings for what the new facility would look like. That preliminary budget was $3,184,070.
The company’s intention at present is to sell off the current administration headquarters and the company yard as well as a few other pieces of surplus property to entirely fund the facilities modernization.
The company has purchased an available 5.267 acre (229,436‬ square-foot) property on Benson Avenue upon which it intends to locate the combined headquarters and corporate yard, paying $3,440,000 for it. As it will need only half of that land for the project, earlier this year the company sold 2.6335 acres (114,718 sq feet) of that property to the city for $1,720,000.
The company believes it can sell the house which hosts its administrative headquarters for $500,000, its operations property on First Avenue for $700,000 and 2.41 acres (105,000 sq-feet) of vacant surplus property the company owns on 20th Street for $1,500,000.
“If the market holds and we are able to sell it, we believe we can get $2.7 million for those properties,” Lee said. “Combined with the $1.72 million the company made from the sale of the Benson Avenue property to the city, the company will have $4.42 million as an overall budget for the project. During our ad-hoc deliberations in 2019, I proposed a budgetary number of $4,000,000, given the uncertainty of the project. My ‘gut’ estimate was established by assuming a site development cost of $40 per square foot multiplied by a roughly 100,000 square-foot site (the northern half of the Benson Property).”
In this way, Lee said, “Funds for the project are expected to come from property sales, not rates charged to our water users. We already have sold one property to the City of Upland. The old administration and operation properties would be sold to fund the remainder. If additional funds are required, the company has additional property on 20th Street that was a potential site for the relocation. Once we have relocated our combined facilities onto Benson, that property could also be considered surplus. We want to conduct appraisals to solidify the numbers of the three unsold parcels, but preliminary budgetary numbers are that we can count on getting $500,000 for the Euclid property and $700,000 for the company yard.”
In early 2019 an ad-hoc committee composed of a subset of the San Antonio Water Company’s board of directors revisited the 2016 architectural renderings, concluding they did not align with the company’s history and future needs, and directed staff to jettison the earlier plans and issue a request for proposals for architectural services. A request for qualifications was sent to five different firms and posted on the company website. Two firms responded, including Claremont-based CEDG, which had drawn up the 2016 architectural renderings. The ad hoc committee reviewed the proposals and selected CEDG as the most qualified.
The company’s board of directors consists of San Antonio Heights residents Martha Goss and Bob Cable, Upland residents Jose Sanchez and Will Elliott, along with current Upland City Councilman Rudy Zuniga and former Upland councilmen Tom Thomas and Gino Filippi.
Word reached the city as to the company’s progress toward its facilities consolidations. Over the summer, the city reacted to the discussions relating to the company’s proposed action. On July 9, 2019, Upland Interim City Manager Rosemary Hoerning wrote Lee, saying “The city has concerns about the construction of the new centralized office headquarter building, given the existing maturity of the service area and limited growth of the San Antonio Heights Community. Upland is concerned a new office headquarter facility may be perceived by the public as not an essential facility in comparison to other physical plant structures, which are needed for the delivery of water to your various customers. This perception may be further heightened, given the recent significant rate adjustments that were implemented last year.”
Hoerning’s reference to rate adjustments relates to ones that were imposed on Upland’s residents and businesses by the city in 2018. The San Antonio Water Company had at that time increased the cost of the water it was selling to customers. The company’s adjustment accounted for 39 percent of the city’s 2018 rate increase.
“I believe the implementation of this new facility could present strong and critical responses within the Upland community,” Hoerning’s letter continued. “Sufficient public outreach and project marketing should be undertaken to understand the climate and project acceptance by the community. The city has expressed verbally our concerns regarding the subject project and understands the funding used will be one-time money and not rate revenue. However, the concerns do include the recent significant increase to water rates, which contributed to the city need to increase its customer rates to ensure there is adequate revenue to meet operational and capital investment requirements. I believe it is essential to demonstrate the need for the investment of these funds in a new office versus applying the money to needed capital improvements to reduce the need for future rate adjustments. At this time, I believe most of the discussion has occurred internally and with the board on office design elements and project costs. I am not sure how much public outreach has been undertaken to determine whether there will be potentially negative public concerns over the proposal.”
Hoerning’s letter continued, “I believe it is important to ensure the company’s capital improvements and facility rehabilitations are well documented and appropriately addressed. Finally, I think the San Antonio Water Company should develop a business case demonstrating that this is the best use of funds on behalf of the shareholders versus investing in other needed company assets.”
Lee shared the city’s communication with the company’s ad hoc committee. He responded to Hoerning and the city council by letter, indicating the company would address the city’s expressed concerns. He similarly responded to inquiries from the company’s shareholders.
In October Lee met with Upland City Councilwoman Janice Elliott, Upland City Councilman Bill Velto, San Antonio Water Company board members Martha Goss, Tom Thomas and Jose Sanchez and three shareholders. In the course of that meeting Lee provided the city’s representatives with a scope of work for the facility replacement project, which he said, “clarified the company’s needs and tightened our budgetary numbers. In effect, we proposed to do exactly what the city asked us to do. I shared the proposed scope with all those who attended the October meeting and received only positive comments in return. The company moved forward and approved the scope at our November board meeting.”
At the November 25 Upland City Council Meeting, at the instigation of Councilman William Velto the council held a discussion relating to the company’s plans. Velto questioned the necessity of the company constructing a new facility, suggesting it could store its equipment at the City of Upland’s corporate yard and have its management, administration and business operations function out of a trailer parked at the city’s corporate yard as well. Councilman Ricky Felix proved more aggressive than Velto.  Felix suggested that the city, which based on its majority ownership of the company’s stock appoints the members of the San Antonio Water Company Board of Directors, replace the board wholesale. Velto stated he was not prepared to make that radical of an adjustment, but propounded the belief that the company’s stated intent was if not profligate, extravagant. Members of the public who spoke in general questioned the expense of the construction of a new headquarters. Councilmembers Janice Elliott and Rudy Zuniga, the latter a member of the San Antonio Water Company Board of Directors, were less dismissive of the company’s statement of need with regard to both consolidating and modernizing its facilities. Zuniga, in particular, sought to temper the rising fervor against the company that Velto and Felix were whipping up, suggesting that it is the city rather than the company which is responsible for the higher water rates Upland’s residents are now chaffing under. The San Antonio Water Company is selling water to the city for $296 per acre-foot, while the city is delivering water to its residents at prices between $901.75 an acre-foot and $1,420.15.
Zuniga’s citation of the price the city was charging did not sway his colleagues from the position that the water company’s intent was untenable. The upshot of the discussion was that the council voted to send the company a ‘cease and desist’ letter, enjoining it from all activity related to the acquisition of a new campus.
The fashion in which Velto and Felix have cast the issue and the rhetoric used to steer much of the public conversation about the water company has portrayed the company’s board and management in a comparatively negative light. An element at play is a possible move toward a merger or takeover of the company by the city. Both Felix and Velto are believed to have political aspirations beyond the city council, including what many perceive as Velto’s ambition toward becoming mayor, or in Felix’s case, a publicly stated desire to move on to Congress. Thus, portraying the water company as an entity that has squandered money, resulting in rising water costs, appears to be in both men’s interest, conditional upon the city being able to effectuate a takeover in which it is perceived that a vital public asset – water – is preserved, and customer/ratepayer/resident interests are being well looked after. A real question, however, attends whether the council’s portrayal of the circumstance matches reality, and indeed whether it has been the city and not the company that both historically and within the last several years is responsible for residents being gouged at the water tap.
Specifically, the Upland City Council in 2018 increased water rates 17 percent effective April 1, 2018; 9 percent further effective January 1, 2019, 9 percent on top of that January 1, 2010, 5 percent more as of January 1, 2021; with a 3 percent hike to come on January 1, 2022. The initial increase upped the cost to $1.76 per 100 cubic feet of water unit used in households or businesses up to the first 20 units; thereafter that below-threshold unit rate increased to $1.91 on January 1, 2019, will go to $2.07 on January 1, 2020; $2.18 on January 1, 2021; and $2.34 on January 1, 2022. Water used beyond the 20 unit threshold and up to 50 units will thereafter cost $2.32 per 100 cubic foot unit beginning April 1, 2018; $2.52 as of January 1, 2019, $2.73 as of January 1, 2020; $2.87 as of January 1, 2021; and $2.96 as of January 1, 2022. Cost on water use beyond 50 units increased to $2.78 per 100 cubic foot unit as of April 1, 2018; $3.01 on January 1, 2019; and will rise to $3.26 on January 1, 2020; $3.43 on January 1, 2021; and $3.54 on January 1, 2022.
The fixed bi-monthly charge for those using the system with 5/8s inch pipe, the type used by virtually all of Upland’s domestic water users, went to $46.90 as of April 1, 2018; then $52.25 as of January 1, 2019; it is to escalate to $57.85 as of January 1, 2020; $60.80 as of January 1, 2021; and $62.75 as of January 1, 2022. As a comparison, the San Antonio Water Company charges a $20 bi-monthly fixed cost for a 5/8” service.
With Upland’s residents sore over those increases, city officials, including Velto and Felix, have not been reluctant to divert that discontent toward the water company, despite the consideration that the city is the deliverer of water to its residents, the rate increases are the city’s doing and not that of the water company and the water company had no veto power over what the city has done with its water once it sold it to the city.
“I have not indicated nor spoken that I believe that the San Antonio Water Company has squandered money,” Velto asserted. “My contention is that due to the City of Upland’s past leadership and the economy, the city failed to accurately increase costs for water gradually to assist in the maintenance required to keep the water delivery system updated. I do believe that the San Antonio Water Company and Upland should investigate a potential agreement whereby the city’s public works department takes over the operations for the San Antonio Water Company.”
City officials are loath to acknowledge, generally and specifically, where and how the San Antonio Water Company’s operations have proven more efficient than those of the city’s water department, despite available documentation to that effect.
Hidden, as well, is a darker secret city officials are keeping. By California law, municipalities which run their own water divisions must utilize the revenue generated in those operations for obtaining water, delivering the water and the construction of further water-related facilities or their upkeep. Rules are exacting relating to how water operation money is to be accounted for, including its deposit into sequestered accounts so that it is not used for other purposes or municipal operations unrelated to its water system. In Upland the tracking and accounting of water department operations over the last decade or more has been slipshod at best. No purely sequestered account for water operations exists, and the money has been pooled with funds used for other operations. Indications, unofficial because documentation and strict accounting information is unavailable, is that water department revenue has on multiple occasions been diverted to other city programs.
Since shortly after he was elevated from the planning commission and appointed to the city council, Velto has resisted repeated calls for the city to undertake a comprehensive auditing of its finances. During the tenures of former City Treasurer Dan Morgan and current Treasurer Larry Kinley, who was elected in 2016, senior administrators have isolated them and limited their function. Domineering city administrators in recent years, faced with financial challenges and focused on day-to-day operations that not infrequently have required that they rob Peter to pay Paul and juggle city finances in ways that are less than fully kosher, have burned through several finance managers who wore out their welcomes by constantly remarking on how funds were being transferred or applied toward unauthorized uses.
Velto said it was “factually incorrect” to say he is opposed to a comprehensive audit, but indicated he wanted proof in hand of misfeasance at City Hall before consenting to a forensic audit.
“I have always been in favor of audits,” he said. “The city has had numerous audits. A call for a forensic audit has been requested by a small group of residents, and if during any of the required audits a discrepancy was found that could not be explained or corrected and a potential crime was discovered, then I would agree a forensic audit would be needed.”
It is apparent that the threshold of preliminary proof city officials feel is needed to trigger a searching inquiry into certain elements of the public’s perception of the irregularities in the use of Upland’s water department funding has not been met. That, however, represents a Catch-22 situation, many residents feel, because without an audit there is no way to show that the city is upping its water rates and then diverting that money to the general fund to help balance its books. At that same time, the diversion of the water department’s revenue is an issue city officials would obviously rather its residents not focus on. The San Antonio Water Company’s move toward selling off its existing premises and moving into new ones provided the council a welcome opportunity to divert the public’s attention away from at least some of the uncomfortable reality at City Hall.
Deriding the administration building the company wants to construct as a “Taj Mahal,” and the water company board’s determination to hold meetings on its own premises as an unnecessary vanity, Velto said, “They don’t need a $4 million facility. They can use City Hall. Theirs is an operation of 11 people. Our water department has 25 people. Their billings and whatnot should be handled by the City of Upland’s water department. They need a 60-seat auditorium for what? They can continue to use City Hall. We can lease them land at out corporate yard where they could build a smaller building there and put an office in it. We have facilities there for storing equipment.”
Velto rejected contentions that the company has outgrown its current grounds. “There is no need to build a $4 million facility,” he repeated. “If they want to sell their house on Euclid and sell their yard on Second Street, they should invest that money in reservoirs in case of a catastrophe. There is no need for them to create a new campus on Benson. To spend the money for that would be a violation of their fiduciary duty to their shareholders.”
The councilman dismissed as irrelevant comparisons between the city’s past misadministration of the city’s water department and the San Antonio Water Company’s more favorable and successful management of its assets. Velto acknowledged neglect of the city’s water delivery system but seemed to suggest there was no carryover from that circumstance to the way the city is currently being run.
“The city in the past deferred maintenance,” he conceded. “Over the last 20-to-30 years, rates have gradually increased. The past leadership did not take care of the problem. Why that is, I have no clue. I cannot apologize for what happened in their time on the council. I’m not interest in dwelling on the past. What I am interested in is moving forward.”
By the same token, Velto said, the San Antonio Water Company’s ability to deliver water at anywhere from 28 percent to 40 percent of the cost charged by the Metropolitan Water District softens no soap with him.
“Water rates are not the issue,” Velto said. “This has nothing to do with water rates. It is fiscally irresponsible to build a $4 million building they do not need, or a $2 million building they don’t need or a $1 million building they don’t need. If they want to buy something, they should buy an existing building downtown. Those brick buildings can be easily retrofitted. When someone doesn’t want to look at other options before they spend this kind of money, they are being irresponsible. It is reasonable for the city to not let the San Antonio Water Company, in which it is the supermajority stockholder, spend that kind of money. That money could be used for other systems and to build other resources instead.”
Velto said the water company should put whatever money it has accumulated into refurbishing its infrastructure.
“It is my understanding some of the pumps are from the 1930s,” Velto asserted. “There is so much more that they can be doing with the four million than building a new headquarters. We have let them know we are not in favor of this and that they are showing no accountability to the residents.”
The attitude among the water company’s leadership is generally out of step with what he and other members of the council expect, Velto said. “[Company Board Member and former Upland City Councilman Gino [Filippi] was the only one who voted no,” Velto observed.
During the November 25 meeting, Councilman Felix sought to usher his colleagues toward cashiering all or most of the members of the water company’s board and replacing them with ones who will carry out the council’s dictates. The council receded from putting such an action on a future agenda, with Velto suggesting the board as it is currently composed should be afforded the opportunity to amend its course of action first. But Velto said the board member replacement remedy is an option. “The mayor appoints the company’s board members and the council approves or confirms them,” he said. “We’re not at the point where I want to replace the board. That’s a little premature.”
Velto said he and other members of the council were working to “build a consensus” on how the city can best employ the water company’s assets and he was dismayed and miffed that the company’s board was “being irrational” with regard to an unnecessary expansion of its facilities.
Without saying so explicitly, Velto, who makes no secret of wanting to be able to exercise more influence by guiding the entire council in its policy determinations and setting managerial objectives, hinted that the city’s eventual direct takeover of the water company is not out of the question.
“There is some redundancy with our water department and San Antonio,” Velto said. “I think it is wise to consider how those overlapping responsibilities can be consolidated, how those resources might be consolidated to one organization. That is the direction I am proposing. My take is, my position is, there are overlapping functions.”
Velto bristled somewhat at the observation that given the city’s past poor management of its own water department and the efficiency with which the San Antonio Water Company has conducted its affairs historically, if a merger were to take place, the water company absorbing the city’s water department would be the more logically appropriate acquisition than the other way around, and that the construction of a modernized and more substantial centralized facility for the water department now rather than later when the price will further escalate falls in line with that.
“If you or anyone wants to say the city has botched its water operations, bring the evidence,” Velto said. “That’s easy for people to say.”
Such evidence is slim, given the city’s reluctance to audit its own books.
Velto, as does everyone on the council, has an investment in demonstrating the competence and proficiency of city staff functioning under his watch. He earnestly sought to propound that the city has turned a new leaf with the elevation of the city’s public works director, Rosemary Hoerning, to the role of acting city manager. He sounded genuinely wounded that someone would suggest that others are less sanguine than he about the city’s situation or that some think his confidence is unwarranted and his trust in the overarching competence of city staff might be misplaced.
“We will always have those that believe otherwise,” he lamented “We have someone [Hoerning] right now who has a strong background in water.” He suggested Hoerning can ensure as city manager that future water department functions are competently carried out in accordance with vectoring revenue from water operations back into the water department rather than to fill funding shortfalls elsewhere in Upland’s municipal monolith.
Confronted pointblank with suggestions that doubt about the city’s reliability in handling its own affairs is much more widespread in the community than Velto is prepared to acknowledge and the suggestion that the water company’s directors might have been seeking to assert independence and thereby construct some insulation to protect the company from a dysfunctional city government that is looking to cannibalize the company and its assets to balance its red ink-hemorrhaging books, the councilman momentarily sounded a note of conciliation. “I don’t think it was the water company’s intent to create any kind of controversy,” Velto said. He then said that it was the nonchalance in San Antonio Water Company General Manager Brian Lee’s approach to expending a significant amount of the water company’s money that provoked the general alarm.
“Some people at the October meeting were taken aback when he acted like it wasn’t important that he was spending $4 million,” Velto said. “He didn’t think there was going to be any repercussion to that. The people in Upland want leadership, they want transparency and they want fairness.”
Previously, Velto said, he just had questions about the water company’s proposal to transition out of its current facilities.
“I just thought they should have had members of the board of directors present it to the city council,” Velto said. “What I wanted at that point was transparency. I thought if we had the relevant information there would not have been any public backlash. But with what I now see, I want this stopped and want the city council to direct that it be abandoned. There is nothing they could do or say to justify spending $4 million on a 4,000 square foot office and a 60-seat auditorium.”
Lee told the Sentinel the company had been upfront with both the public and the city council from the time the concept of consolidating and modernizing its facilities was first broached in 2015.
“All of our meetings have been conducted in the public forum and all agendas and minutes are available for review,” Lee said. “City staff and councilmembers attended some of them.”
He further clarified that some of the company’s wells date from the 1930s but that all of the pumps servicing them are modern and up-to-date.
For many Uplanders, the issue is complicated by a tangle of considerations, not the least of which is a succession of city scandals, followed by political instability at City Hall. In 2011, former Mayor John Pomierski was indicted by a federal grand jury on bribery charges, along with two of his business associates and one of his appointees to the Upland Housing Authority. All four were convicted. In 2012, Pomierski’s hand-picked city manager, Robb Quincey, was charged by the San Bernardino County District Attorney’s Office with three felony political corruption/abuse of public office counts. He too was convicted, albeit to a reduction in charges. Hoerning is the city’s ninth city manager since 2005. As of Pomierski’s resignation from office a day before his indictment, there has been a complete changeover in the membership of the council, with 12 people serving as mayor or councilman since that time. In the last election cycle in 2018, three members of the city council were displaced.
The degree to which the San Antonio Water Company is restrained from acting with autonomy has led to confusion among locals as to precisely what type of entity it is. While some believe it to be a private company, it is perceived by others to be a public entity and by some to be a quasi-public agency/quasi-private company or some order of public/private entity. In actuality, it is a private entity, a mutual water company that just happens to be slightly under-70 percent owned by a public entity.
Velto told the Sentinel he wanted to make clear that his concern about the water company’s facilities modernization plan is unrelated to his personal political issues. “I have no ambition to run for mayor,” he said. “I have been asked, but that’s not something I am thinking about at this moment. I am flattered that people have suggested I could be mayor but I have no aspiration to become mayor. It’s not on my bucket list. If I said something that gives anyone that impression, it was something taken out of context. I’m not interested. To tell you the truth, I was surprised when I was appointed  to be on the city council. I know I ran before and I did apply but I was happy serving on the planning commission. I have no clue as to why they picked me. All I can say is that while I’m here I want to make the right decisions.”
In a roundabout way, Velto let on that he sees his role as a city councilman to be an enabler of the city’s authority and action, and less as a watchdog who is critical of its function and continually hamstringing city employees in their efforts.
“Showing confidence in city staff is a part of leadership,” he said. “The job of the city council is to govern and set policy, not to manage. The city council can hire and fire the city manager and the city attorney. Beyond that, the running of the city is all on the city manager. I have no choice but to trust the city manager. That is my job, to govern. Governing is a lot different than managing. I don’t care how much experience you have, in your role as a councilman you are there to oversee the city manager but not to do the managing yourself and certainly not to micromanage. You allow the city manager and senior staff to use their judgment and run things – that’s why they were hired – until something is discovered and then you say, ‘Hey, it’s time to look into this and investigate.’”
Velto’s position is that he has not seen anything grossly amiss at City Hall. “We’ve had audits and they haven’t shown anything criminal. If they do come in with something suspicious, then we act.”
At the same time, he said, as a councilman he has license to jump in when his overview of the city gives him an inkling of something heading down the wrong track.
“If I am going to be up there on the council, I can sit there and do nothing or I can make sure I hold the water company accountable to the constituents,” he said. “Now, if the water company holds a shareholders meeting and the shareholders agree to build this building for $4 million, then even though I might personally see it differently, I would agree that the company and the board have the right to proceed. But until that occurs, I am here to say they need to stop. My questions are, ‘Why do you need this?’ and “What are the other options?’”