REPORT CALLS FOR 20% CUT IN WATER RATES : FINDINGS: AREA FIRM'S `ABSENTEE' WORKERS EARN NEARLY $170,000 EACH.

Byline: Sherry Joe Crosby Daily News Staff Writer

Santa Clarita Water Co. should slash its rates by 20 percent, cut the salaries of its highest-paid managers and eliminate four absentee employees who each earn nearly $170,000 a year, state officials say.

The recommendations, termed ``jaw-dropping'' by one activist, are included in a report by the Office of Ratepayer Advocates, which advises the state Public Utilities Commission. The PUC is considering a request by the water company to nearly double its rates during a four-year period, starting in 1997.

In a report issued last month on the company's operations and finances, the advisory agency said it found evidence of four nonworking employees on the payroll. Rather than increasing rates, the agency said the water company should lower the amount that customers pay for water.

``Upon investigation, the water division recommends the commission should order a decrease in rates of 20 percent in the first test year and deny any recovery from the balancing, memorandum and other special accounts,'' the report said.

President William J. Manetta did not return calls seeking comment.

The water company, which has 20,000 customers in Saugus and Canyon Country, last raised rates in August 1982. According to its application, it is seeking higher rates to recover the cost of equipment damaged in the January 1994 Northridge Earthquake and in anticipation of rate increases by the Castaic Lake Water Agency, which sells water to Santa Clarita and three other local suppliers.

Under its proposed rate increases, the company would raise its total revenues by $2.6 million in 1997; by $859,300 in 1998; by $796,600 in 1999; and by $720,800 in 2000.

The average monthly residential bill would increase from $32.67 to $41 during the first year of the proposed rate hikes but still would remain among the lowest rates of the valley's four water retailers, Manetta has said in the past.

The request first must be considered by administrative law Judge Orville Wright, who will submit his findings to the PUC, which has the final say. While the company is private, as a utility it is subject to public review.

Customers of the company said the report supports their claims that they are paying too much for water.

``It's just unbelievable all the stuff in here about how they operate,'' said Allan Cameron, one of 61 customers who filed a PUC complaint last year, complaining about the price they pay for water. ``Almost every page has a jaw-dropping disclosure. It's just really amazing.''

Among the agency's findings are four employees who drew monthly salaries despite little evidence of work. According to the report, the employees did not live in Santa Clarita and were ``rarely if ever present'' in the local office.

The report recommends that the employees' stated duties - advising on legal, tax and operational issues - be handled by existing staff.

``Such duties overlap those of Santa Clarita's president, vice president and chief financial officer, and other resident employees,'' the report said. ``Their duties can be accomplished by the full-time staff for far less than the $170,000 (including benefits) that the absentee personnel would cost.''

The report also said Santa Clarita needs to cut the salaries of its three highest-paid employees, including Manetta who earns $137,000 a year, $47,000 more than his counterpart at Valencia Water Co.

The company's vice president makes $92,000 and its engineer, $73,300. The report instead recommended that Manetta's salary be reduced to $90,000; the vice president's to $80,000 and the engineer's to $70,000.

The report also criticized the company for including Good Friday as one of its 11 paid holidays.

``Members of the public are denied access to Santa Clarita's offices during that day and ratepayers are required, through the rates they pay, to support an inappropriate entanglement with religion.''

Santa Clarita's request was prompted by a PUC complaint filed in April 1995 by 61 customers who claimed that they paid for state water - at a rate of $145 per acre-foot - but received well water, which costs $95 per acre-foot.

An administrative law judge ruled that the valley's largest water retailer must file a rate proceeding, which it did in July. A public hearing is scheduled for 10 a.m. Dec. 17 at 107 S. Broadway, Room 5109, Los Angeles.