Panoche Water District taking steps to address 'failures,' manager says

Workers discovered unexpected storage barrels during routine construction and cleanup work at a site owned by the Panoche Water District.
Workers discovered unexpected storage barrels during routine construction and cleanup work at a site owned by the Panoche Water District.

Panoche Water District officials want to rebuild public trust in the embattled agency in the wake of criminal charges accusing former district leaders of embezzling thousands of dollars and illegally dumping hazardous waste.

Ex-General Manager Dennis Falaschi, former Office Manager Julie Cascia and the district's San Luis River Improvement Project Manager, Atomic Falaschi, were arrested Wednesday by FBI and California Department of Justice officials after they were alleged to have used the water district's credit cards to pay for personal items or services, according to a criminal complaint filed in Fresno Superior Court.

"Throughout the entire time I've been here, the district has cooperated and is continuing to cooperate with any official investigation," said Ara Azhderian, who has been the general manager for the water district since October.

Atomic Falaschi, who is currently the water district's director of maintenance, was placed on paid administrative leave following his arrest and the agency is conducting its own investigation on his status, Azhderian said.

Azhderian said along with a change in executive management, the water district has changed its policies and procedures to address the "failures" in prior financial practices.

The criminal complaint states that Dennis Falaschi and Cascia approved using the water district's funds for dubious loans, items for personal use such as kitchen appliances and personal car repairs. They also reportedly paid the water district's employees for performing landscaping services on private properties on district time.

Dennis Falaschi also signed off on transporting 1,500 pistachio trees owned by the water district to private property owned by Atomic Falaschi, his son, according to the complaint.

Court records indicate former shop supervisor Dubby West and part-time employee Jack Hurley have been charged with illegal dumping of hazardous waste after the DOJ and California Department of Toxic Substances Control last year found 86 drums of chlorine, caustic soda, iron chloride and mixtures of used antifreeze buried on the water district's property.

That discovery happened about two months after a audit report by the Office of State Controller Betty Yee that raised serious questions on how the water district was managing its finances.

That discovery also started an investigation into illegal dumping that branched into a probe into the district's finances and led to Wednesday's arrests, according to court records and news releases.

The water district has taken several steps to address findings detailed in the State Controller's audit report, Azhderian said.

Those include ending the practice of personal loans to employees, setting up more adequate review and oversight into credit card expenses and hiring a new director of finance and administration with experience from the corporate banking world and non-profits.

Azhderian said the water district also created a compliance officer position to make sure new, written policies and procedures are being followed within the agency.

The contaminated site of the hazardous waste also has been cleaned up, Azhderian said.

A new computerized time-keeping system will keep track of work hours, and board-meeting minutes are now being recorded and kept by a dedicated individual., Azhderian said, adding that there was still more work to be done.

"What happened (Wednesday) is very much about the past," Azhderian said. "The Panoche of today is not the Panoche of yesterday. The board is progressive in addressing, adopting and implementing new policies."