Water Director Indicted for Taxes : Charges: Carl Kymla of the county municipal district underreported taxable income, federal officials say.

An Orange County water district official who earlier faced felony charges of misappropriating public property has been indicted on federal charges of failing to fully report his taxable income, officials said Tuesday.

Carl Kymla, who is a director of the Municipal Water District of Orange County, paid less than half of the $158,282 he owed in taxes in 1986 and 1987, federal officials said. Kymla runs a private consulting business, Municipal Services Consultant Inc. in Newport Beach, officials said.

“I vehemently deny the charges relating to this tax issue, and I’m confident the charges will be dismissed in full,” said Kymla, 58, of Corona del Mar.

He is scheduled to be arraigned June 28 in U.S. District Court in Los Angeles, and faces a maximum penalty of 10 years in prison and a $500,000 fine if convicted of two counts of tax evasion, said federal prosecutor Kimberly Dunne.

In 1986, Kymla claimed he and his wife earned $31,996 and owed $5,096 in taxes when in fact the couple earned $172,339 and owed $66,127 in taxes, according to the indictment.

In 1987, Kymla claimed his joint taxable income was $191,805 and owed $63,785 when in fact the couple earned $268,743 and owed $92,155 in taxes, according to the indictment. Kymla’s wife was not named in the indictment.

Kymla was general manager of the Moulton Niguel Water District in 1978, when he was one of five district officials indicted on felony charges of misappropriating public property. The charges against Kymla included the allegation that he used district equipment and employees to handle chores around his home.

As part of an apparent agreement with prosecutors, the charges against him were dismissed in February, 1979, and he resigned from his salaried position with Moulton Niguel the following day.

At the time, prosecutors said Kymla was indicted by the Orange County Grand Jury even though the grand jury had been informed that prosecutors lacked solid evidence against him.

Kymla, a former Newport Beach councilman, represents Orange County on the board of directors of the Metropolitan Water District, the giant Los Angeles-based agency that sells water wholesale to various water districts scattered across Southern California.

“As far as we are concerned, this is between him and the IRS and he is innocent until proven guilty,” said Stan Sprague, general manager for the Municipal Water District of Orange County, who said the indictment will not impact Kymla’s job as board director.