Ramona's Nuevo Memory Gardens, a 10-acre cemetery, is one of 58 special districts in San Diego County. Small governmental bodies like this rarely have community watchdogs.
But this district has one, Pete Smith, a 42-year resident of Ramona.
In 2023, Smith tipped KPBS to an unusual agreement between the district and its governing board. Records showed board members Daniel Vengler and William Biggs had voted in favor of the district paying their health insurance coverage beginning in 2011. This arrangement cost the district a total of $402,163 over the 12-year period. None of the other San Diego cemetery districts pay their board's health benefits.
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In a surprising move during a district board meeting in August 2023, Vengler paid the district back for his insurance coverage with two checks totaling $303,658. There is no record of Biggs paying the district back for his benefits. The board also voted at that meeting to terminate their health benefits going forward.
But Smith is now saying the story didn't end there.
In January, he was appointed to the cemetery board by the San Diego County Board of Supervisors, along with two other new trustees. Among his first actions was to confirm that board members were no longer having their benefits paid by the district. Smith said John Vargas, the cemetery district’s general manager, told him that the benefits had indeed been terminated in August 2023.
However, Smith found records showing the health insurance premiums for Vengler continued to be paid by the district from September through December 2023. And, Smith said, records showed $10,652 in insurance premiums were never paid back.
It wasn’t an easy search. "I had difficulty when I got there discovering the facts because they were, in my opinion, hidden in the financial statements,” Smith said.
Smith also said he asked Vargas "for a breakdown by employee as to who was getting paid what benefit.” Vargas refused to provide any information, saying the records were protected by Health Insurance Portability and Accountability Act (HIPAA) privacy rules and couldn't be released, Smith said.
KPBS asked long-time San Diego employment law attorney Josh Gruenberg about Vargas’ claim. Gruenberg called it “absurd.”
“HIPAA protects medical records and diagnoses and medical notes and medical information, not the payment of health benefits from a public organization," he said.
Smith also turned up an unusual employment agreement between Vargas and the prior cemetery board. Records show it was signed off on by Biggs and Vargas.
“It happened after they knew they were being replaced in January,” Smith said.
The agreement said Vargas was in line for a $45,000 severance payment if he quit or was fired for any reason. Gruenberg said he has reviewed thousands of employment and severance agreements during his 32-year career, and that an agreement worded like this is “unheard of.”
“I've never seen one that allows an employee to receive $45,000 in severance if he is terminated for cause, and specifically these very serious for-cause issues like bribery, perjury, fraud." Gruenberg said.
There is no evidence Vargas acted in any way improperly, nor is there any evidence that he was fired. Instead, records show, he quit suddenly in June without giving notice. And he had his new assistant sign the approval for issuing the severance check — something she was not authorized to do at that time, Smith said.
Vengler refused a KPBS request for comment at a recent cemetery district board meeting. Repeated attempts to reach Biggs and Vargas for comment were unsuccessful.
Bob Stern, the author of the California Political Reform Act, said Ramona is fortunate to have someone like Smith as a watchdog. This is rare in California, which has almost 3,400 special districts.
“The problem is that nobody pays attention to special districts," Stern said. “(And) if it’s not being watched, then people think they can get away with it. Maybe not illegally, but unethically.”
Smith said he plans to continue as a watchdog for the foreseeable future.
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