A preliminary hearing to determine if there is sufficient evidence to hold Dave Stevens over for trial got underway this week in San Mateo County Superior Court.
Stevens, facing 11 felony counts in connection with allegations of misuse of public funds as water district manager, has been on paid administrative leave for the past two months.
He officially resigned from his position last week, effective June 30. The North Coast County Board of Directors unanimously accepted his resignation.
NCCWD Board President Mason Brown said the board accepted Stevens' resignation as "part and parcel of a resolution of a dispute which has arisen concerning his employment. The resolution needs to be finalized.
When this is done, the material terms of the agreement will be disclosed."
In Redwood City, Assistant District Attorney Peter Lynch began laying out elements of his case against Stevens Monday before Superior Court Judge George A. Miram.
First called to the stand Monday morning was longtime NCCWD Director May Gee, who was president of the board in 1993 when Stevens received a letter of reprimand.
That reprimand was a result of allegations of misuse of expense accounts, an unauthorized pay raise and reporting of overtime, the basis for some of the charges Stevens faces now in the criminal case.
Gee was specifically questioned because at that time she was part of the board's personnel subcommittee, involved along with Lee Forster, in investigating the allegation.
Lynch walked Gee through the detailed circumstances of how that investigation was conducted, and the degree to which the rest of the board was apprised of the specifics.
"We didn't think it was criminal, we thought it was poor judgment," Gee said, noting in retrospect the reprimand letter was "a bit harsh."
Under questioning, Gee said she tore up some of the paperwork related to the investigation once it was over and did not specifically show it to the rest of the board.
"They were addressed to me and Lee. I didn't want them to fall into the wrong hands. They were just copies anyway," said Gee. "That's what I do with all my materials I don't need." She agreed with Stevens' defense attorney, Joseph O'Sullivan that the documents were not torn up "to hide" anything.
"You and Mr. Forster were satisfied there was no intentional wrong-doing on the part of Mr. Stevens?" asked O'Sullivan. "Yes," said Gee.
Lynch also touched upon the longtime relationship between Gee, 73, and Stevens, whom she's known since the 1950s and who used to play with her children. However, as she testified later, while she and Stevens usually "found seats together and chit-chatted" at community functions, they were not really personal friends and had never been to each other's house.
Drawing upon several district personnel manuals, Lynch's questioning also focused on Gee's knowledge of the district's employee policies, or lack thereof, the scope of Stevens' authority and discretion, alleged abuses of that discretion, as well as the degree to which his actions were reviewed by the board.
The prosecutor specifically questioned Gee about Stevens' use of a district credit card to purchase a go-cart for his son, also the basis of the current charges.
Gee agreed with O'Sullivan that the district did not lose any money in the transaction, that the reimbursement was made prior to the arrival of the credit statement. She said Stevens told her he used the card only when his own did not "go through" and that he later paid back the district.
"There were no restrictions, but I told him the public perception would be negative," said Gee, relaying how she had advised Stevens not to use the card for personal expenses, even if reimbursement followed. "I didn't want to make an issue out of it.
Gee said she regularly reviewed Stevens' financial records for two years following the 1993 reprimand, noting she had not come across any irregularities.
Lynch, at one point asking if a $50 bottle of wine purchased by Stevens during a dinner out was appropriate? "We had no policy on that," responded Gee.
Gee argued that board specifically sought more visibility for the previously obscure agency, encouraging Stevens to become active in the community and avail himself of $1,500 in annual expense accounts for lunches and similar expenses.
"We wanted him to interact with all the community. We're one of the bigger employers in the city," said Gee.
"What was the purpose of that visibility given you have a monopoly?" asked Lynch.
"Then it was common sense, you presumed he would not steal from the district, that he could take out anyone he saw fit?" asked O'Sullivan.
"Yes," Gee responded. "We expected him to use his own discretion," said Gee, agreeing there was no hard and fast rules.
"During this time you were also a rate payer. If anything was handled inappropriately you would have been a victim, correct?" asked O'Sullivan.
Gee conceded early on in the proceeding she was not privy to all of his employee file. She said she had no knowledge of a reprimand issued to Stevens in the wake of a 1984 drug selling conviction that involved the use of a district scale.
"I don't remember reading it in the local paper. There was a time when I didn't subscribe," she told Lynch.
He also questioned her why she never told the board about an accusation that Stevens sought reimbursement for a lunch that was paid for by water district attorney Ray McDevitt.
The court also heard from former water board member Bob Vetter, who along with current member Tom Piccolotti first went to the District Attorney with suspicions more than a year ago.
Under questioning, Vetter recounted his role as the newcomer to the board during that early investigation that led to the letter of reprimand.
He said as a board member he was never given details about the allegations against Stevens, but that it was dismissed as "sloppy bookkeeping."
Also appearing Monday was Piccolotti, who was questioned about allegations relating to the inappropriate sale of water meter boxes to Chuck Gust.
O'Sullivan probed the reliability and basis of Piccolotti's suspicions as well as the credibility and accuracy of his initial testimony to the D.A.'s investigator.
He also accused Piccolotti of having an "ax to grind" with Chuck Gust as a result of an incident in which he was allegedly "thrown out" of Nick's Restaurant while he was drunk.
Piccolotti denied that characterization, saying although he did have a "wrestling match" with a buddy that got out of hand, he walked out voluntarily and never had any problem with Gust. The court ruled the incident "irrelevant."
O'Sullivan's questioning also touched upon Piccolotti's personal trip to Gust's Pescadero property to photograph the alleged water boxes, but that line of testimony was cut short by the judge on grounds it is the subject of a civil suit pending against Piccolotti by Gust. Gust has charged Piccolotti with trespassing and slander in his suit.
Monday's testimony drew to a close with testimony from the D.A.'s investigator, Tom Paulin, who recounted his conversation with the clerk and owner of a Pacifica convenience store who relayed an alleged shoplifting incident involving Stevens.
That allegation, which Stevens faces as a single misdemeanor charge, revolves around the contention he left the store with a bottle of Gatorade without paying.
"I know your boss, you're in big trouble," Stevens is alleged to have said to the clerk, Paulin testified. Later, he allegedly told the store's owner he would "ruin him," and also allegedly threatened to "strike down the clerk if he saw him again or words to that effect," the investigator testified.
O'Sullivan noted that Stevens' young son was with him at the time and that he had, in fact, paid for the drink, twice, although reserving the right to recall the investigator later.
Tuesday morning started off with testimony from two former NCCWD employees - Patricia Hazen, clerk; Cynthia Bauer, bookkeeper; and current operations manager, Cari Lempke.
Hazen testified, under questioning by Lynch, that she saw Stevens retrieve luncheon check stubs from a garbage pail near the cashier's desk at the Sharp Park Restaurant.
Hazen said she was at the restaurant for lunch when Stevens came in and went to the cashier's desk and pulled out the stubs. She said she reported the incident to Finance Officer Roberta Bechtel because she "thought it was illegal."
O'Sullivan asked whether "you knew that Roberta Bechtel and Dave Stevens were enemies?"
Hazen said "not exactly...there was tension."
"You knew," O'Sullivan continued, "she wanted his job?"
Hazen said no, she did not know.
Hazen acknowledged that she had resented a comment Stevens allegedly made to her one day as he paused at her desk to say, "I'd like to fire all you broads and get some younger ones."
Bauer, the district bookkeeper, testified its policies and practices in handling overtime and qualifications for overtime or "comp" time for employees, including extra pay for attending board meetings and various seminars.
She also agreed with Lynch that use of petty cash funds increased somewhat after Stevens became manager.
She acknowledged, as O'Sullivan suggested, that it was her obligation to see if "anyone was overpaid" and that she had not found any major inconsistencies to report to the board.
Lynch questioned her about Stevens' relationship with board members. Bauer said Gee, Forster and Russ Conroy "appeared to be friendly" but added that perhaps it would have been "better not to be quite so personal."
O'Sullivan asked, "if you are aware the board wanted Mr. Stevens to be more proactive" in general?
Operations Officer Lempke was asked about the report that Stevens gave water boxes to Chuck Gust "before it was a full-blown controversy?" She said she had learned of the matter "from conversations in the office."
That and other district business was discussed, she testified, at a luncheon at the Moss Beach Distillery with Stevens and Diane Martyn on Martyn's birthday. She said it was possible for water customers to be extended credit when it is pre-arranged and, usually, when customers were experiencing difficulty in making payments currently.
A preliminary hearing is an opportunity for the D.A. to make the case before a judge that enough evidence of a crime exists that a defendant should stand trial.
Witnesses testifying are specifically called by the D.A. in an attempt to strengthen the prosecution's case, with the defense given a chance to cross-examine. At the end of the hearing, the judge will determine if Stevens should stand trial.
Stevens' preliminary hearing, which ran through yesterday, Tuesday, is expected to run at least four days, although due to scheduling conflicts with witnesses will not resume again until next week. However, on Tuesday afternoon, Lynch indicated he had only a few more witnesses to call, including Bechtel and McDevitt.
- Bill Drake contributed to this report.