California legislative committee approves audit of water rates

Responding to complaints about rising water bills from working-class Los Angeles County communities, a state legislative committee on Wednesday unanimously approved an audit to examine how a number of local water agencies set their rates and whether misuse of public money is driving up costs.

The action, sponsored by Assemblyman Ricardo Lara (D-Bell Gardens), comes amid complaints from consumers and local water managers in Southeast L.A. County, as well as recent stories in The Times about questionable spending by one agency in particular, the Central Basin Municipal Water District.

The state auditor will examine how five water retailers and wholesalers, including Central Basin, raise their rates, and whether part of the reason water costs are increasing is tied to excess spending on lawyers and lawsuits, lobbyists, consultants and other expenditures. The massive Metropolitan Water District, which distributes imported water throughout Southern California, would also be part of the audit.

Some speakers at the Joint Legislative Audit Committee criticized the Water Replenishment District — which has a contentious history with Central Basin. The WRD has raised its assessment from $138 to $224 per acre-foot over the last six years, and last year a Superior Court judge ruled that the district imposed the charges improperly.

But most critics who showed up in Sacramento to support the audit focused their complaints against Central Basin, which has awarded millions of dollars in contracts to organizations linked to its political allies. Central Basin also paid $172,000 to an outside consultant to produce positive Internet articles “written in the image of real news.”

Cerritos Mayor Carol Chen said she supported a close examination of Central Basin and WRD and asked that auditors look into their spending on public relations and lobbying, as well as the costs of infrastructure projects and whether they are “necessary and reasonable.”

Art Aguilar, Central Basin’s general manager, said his agency has supported residents’ efforts to find out the reason for their water rate increases.

“We intend to cooperate with any legitimate effort to protect the public and make sure water is provided at an affordable and fair level,” he told audit committee members.

After the hearing, Lara said that questions about water costs transcend Southern California and that he hoped the audit would be a step in examining the broader issue. The audit is expected to take nine months.

“The crux of the issue is to investigate everything from legal fees, consulting fees, lobbying fees, infrastructure projects, all the things that contribute to water rate increases,” Lara said. “And frankly, to get answers about where the money is going. This should be a good framework to see if there’s any policy work or regulatory work we can do at the state level to make sure the fees being collected go to what they’re intended for.”

hector.becerra@latimes.com