COLUMN ONE : America’s Forgotten Fiefdoms : Obscure special districts spend billions each year overseeing water, graveyards and other local needs. So many exist that critics say they defy understanding and oversight.

When even the simplest things in life became too expensive, unmanageable or just too much trouble, Californians for generations have responded with heavy doses of government.

When swarms of disease-carrying mosquitoes accompanied soldiers home from World War II, mosquito abatement districts became the bureaucratic rage.

The early solution to a shortage of hospital beds in 1945: hospital districts.

Even in death, government has been able to find new life. In the 1920s, upset by the deterioration of local cemeteries, residents throughout the state worked to guarantee a future of respect for their burial grounds. How? Special cemetery districts, of course.

Since the turn of the century, layer after layer has been added to a nearly invisible bureaucracy that is entrusted with billions of dollars in public funds. Fed by pennies and nickels charged to local property tax bills or other fees, more than 3,000 districts thrive in California on a collective annual budget that would make IBM blush: $14 billion at last count.

At a time when government growth is among the public’s top complaints, the number of special districts has increased at a faster rate than any other form of government across the country. According to the U.S. Department of Commerce, 33,131 special districts exist, more than all of the nation’s cities. Since 1952, the number has nearly tripled.

Special districts are celebrated by some as the purest form of democracy, where residents have a hand in selecting or appointing expert directors to deal in the intricacies of pesticides or flood control.

The result is often a lack of accountability that officials say has bred difficulty in tracking financial waste or identifying inefficiency.

“If I gave a class project on how to invent a bad system of government, I wouldn’t be able to come up with one worse than this, short of totalitarianism,” said Dick Simpson, a political science professor at the University of Illinois at Chicago.

One special district consumed by controversy is the Santa Margarita Water District in south Orange County, where two executives for years took advantage of lax oversight to spend thousands of dollars in district funds on lavish meals, trips and other perks.

District documents revealed that its top managers triple-billed the district for one out-of-town trip, and one of them used public money to pay for a guided limousine ride through New York’s Central Park.

Disclosures of the spending first reported in The Times last month brought outrage from district residents. Since then, the county district attorney and the FBI have joined forces to investigate possible violations of ethics laws stemming from the executives’ acceptance of thousands of dollars in gifts from contractors who were awarded lucrative business contracts from the same district officials. Both executives were suspended with pay and have retired.

Even before the Santa Margarita furor, the district system was assailed by officials as being bloated and unwieldy--the kind of government Ross Perot loves to depict as wasteful and inefficient.

Another favorite target for critics is the sheer number of districts.

Pennsylvanians probably don’t know it, but their state holds the dubious distinction of having the most sewer-related governments, 682. And if you thought college basketball was big in Kansas, try tallying up the cemetery districts, 655 in all, the most of any state.

Just west of Chicago lies the Addison Creek River Conservancy District. Maybe more confounding than its name is the fact that the district is managed by a five-member board of directors with an $88,000 annual budget and two employees who work to keep a two-mile stretch of the Addison Creek clear of debris.

In Illinois, the unchecked growth of special districts has been blamed for creating such confusion that residents have little if any knowledge about who is providing some of the most basic services.

“Folks in Illinois are just overwhelmed with democracy,” said Jim Nolan, president of the Taxpayers Federation of Illinois, whose state ranks as one of the most governed jurisdictions in the nation.

Counting the state’s 2,995 special districts, 102 counties, 1,282 cities and 1,433 townships and 997 school districts, Nolan said, residents have lost track of their leadership. It is not the cost of supporting such a multilayered government that has the federation concerned, Nolan said, but rather the system’s numbing influence on the state’s citizenry.

“There is no way that even the most active League of Women Voters can monitor what these governments are doing,” Nolan said. “Citizens feel like they have lost control. The link between people and their communities has been weakened because of this growth. . . . If we could somehow make the number of governments more manageable, we might clarify what’s going on and promote a greater trust.”

Simpson, a former Chicago city councilman, said his political science department is completing a study of special district government in Illinois. One of the hardest chores, he said, was trying to locate the agencies’ annual budgets.

In California, there have been sporadic calls for reforming the district system. State Sen. Marian Bergeson (R-Newport Beach), who chairs the Legislature’s Local Government Committee, said the scandal enveloping the Santa Margarita Water District has focused attention on a branch of government badly in need of a diet.

The spending abuses exposed at Santa Margarita are reminiscent of problems at the Contra Costa Water District in Northern California.

That district’s general manager resigned last year after six grand jury studies found evidence of excessive spending for travel and meals and other questionable expenses. Clyde Parkhurst, the grand jury foreman during the reviews, said the panel was “outraged by the blatant misuse of public funds.”

The investigation was sparked when newly sworn jurors--interested in a tour of a new $450-million reservoir site--were picked up by district officials in a luxuriously appointed Mercedes-Benz bus.

“Having got that kind of treatment, that’s what triggered it for us,” Parkhurst said.

Among other things, the jury found that officials spent $5,700 on a political poll for a City Council race in which one of the candidates was a district official’s wife.

In annual pilgrimages to New York, Parkhurst said, directors routinely billed the district for dinners at expensive restaurants and Broadway entertainment. The grand jury found that in three years, the former general manager had eaten two-thirds of his meals at district expense.

“Nobody was watching,” Parkhurst said.

The grand jury reviews did not result in criminal indictments, but have ushered in a new management team at the district.

In many cases, Bergeson said, districts have been allowed to run under the direction of a small corps of executives whose friendly ties to private industry have become nearly impossible to separate.

At the same time, she said, toothless state regulations have allowed the weakest of these districts to resist consolidation into more visible forms of government or to avoid outright elimination.

“It is recognized that some of these districts are redundant and not even needed,” Bergeson said. “But some of these agencies are the closest thing to immortality that you could get.”

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California officials say that the special district phenomenon was born in the San Joaquin Valley more than 100 years ago.

Farmers in Stanislaus County desperately needed a reliable water supply to irrigate crops but had no local government on which to depend. So in 1887, they pooled their resources to form the Turlock Irrigation District.

As the need for water spread from agricultural to more urban regions, more water district governments followed. In many regions, especially Southern California, the districts served as the precursors to municipalities and many continue to live on with independently elected or appointed directors who control their own budgets.

“From the creation of water districts, it was not a big step for the public to form sewer districts, mosquito districts, fire protection districts and so on,” said Peter M. Detwiler, a Sacramento consultant to the Senate committee.

Advocates say that at their best, the districts bring government closer to the public than any other political form. Instead of being professional politicians, district directors often are drawn from private business circles intimately related to a district’s mission.

The agencies’ budgets are funded through shares of local property tax revenues or user fees. Others, with independently elected boards of directors, maintain their authority to levy taxes in the areas they serve. Since the passage of Proposition 13, a measure that reduced the amount of property tax revenues to local governments, districts also have relied on a variety of user fees.

Appointees or candidates for board election tend to be selected based on their expertise in highly technical areas, such as water delivery or sanitation systems. The advantage in that system, officials say, is that directors maintain a single focus and never have to deal with the municipal headaches of police union negotiations or waning social service budgets.

“For the most part, I think the districts hold their own or do better than most other governments,” said Ralph Heim, legislative director of California Special Districts Assn. “A vast majority of them do a good job and do it with less people. . . . We need to do a better job educating constituents about who we are and why we’re here.”

Special districts, however, can exhibit death-defying powers.

Years of frustration melt into quiet laughter when Michi Takahashi, a longtime staff member of the Los Angeles County Local Agency Formation Commission, recalls the curious workings of the now-defunct Northwestern Los Angeles Resource Conservation District.

Once referred to as the “agency that wouldn’t die,” the district survived two attempts on its life even after disclosure that it had spent more than $60,000 for cars, bicycles, a refrigerator and a “hospitality account.” Another $97,000 was spent in the mid-1980s for the purchase of a Granada Hills house to serve as the district’s headquarters.

Initially formed in 1944 to conserve soil, water and other resources in the west San Fernando Valley, the district had grown to 660,000 acres in the San Fernando and Santa Clarita valleys and on Santa Catalina Island. With the valleys more urbanized in the mid-1970s, the district was found to have outlived its usefulness.

But the district had become so entrenched and resistant to regulation, Takahashi said, that it took a special act of the Legislature to finally bury the agency in 1984.

What has been particularly frustrating in California is the lack of authority entrusted with county local agency formation commissions. By a foible of state law, the commissions have been allowed to rule on the creation of special districts but have no authority in consolidating or dissolving them.

New state laws have been proposed that would give commissions such authority, especially over wasteful and inefficient districts.

If the new legislation doesn’t help, Bergeson warns, the state’s multibillion-dollar budget shortfall could force selective pruning of California’s most vulnerable district governments.

For the second consecutive year, the governor has proposed taking millions from the districts to fund public education. Since the state provided districts with the authority to share in property tax revenues, Orange County Budget Director Ronald S. Rubino said, the state may also legislate itself a larger share of the pot.

Last year, the state took $375 million from special districts and this year’s take could be $750 million.

The stark budget realities are not lost among those who operate the special governments.

“Given the economy today and given the effort to streamline government, I would think that we would be a prime candidate for transfer to the private sector,” said Sam Randall, general manager of the Orange County Cemetery District, whose $1.6-million annual operation is ranked as the largest of the state’s 262 graveyard governments.

The district--using rose gardens for the scattering of ashes, niche areas and urn gardens--has been credited with revitalizing public cemetery grounds in four cities. Although it does not attempt to compete with Forest Lawn Memorial-Park, the district conducted 606 services last year. No other district in the state performed more than 500.

Because property tax money is its main source of operating revenue, Randall said, the district’s burial costs range from $500 to $1,200 per plot, about 20% cheaper than private cemeteries.

The five directors, all appointed by the board of supervisors, meet on the first Wednesday of each month. These days, the main topics have been the closure of old buggy trails and the redesigning of traffic flow to accommodate more plots.

“I don’t think the average person would know that we exist,” Randall said. “I don’t know that in my six years here that a public audience has been at our meetings.”

BACKGROUND

A special district is a local government that delivers public services. A district is authorized by the state and established when cities and counties cannot provide for the needs of a specific area. Most such agencies are funded by property taxes or user service fees. The agencies are governed either by an appointed or elected board. Formation of a district begins when voters within a specific area apply to a county local agency formation commission. The application describes boundaries, proposed services and financing plans. If the application is approved, a public hearing is held. After that, the issue is placed before voters. Under state law, a district can be dissolved only by the district itself. Legislation is being proposed that would allow local agency formation commissions to initiate dissolution.