Water Agency Pours Money Into Lobbying Efforts

The small, upstart Castaic Lake Water Agency racked up $304,000 in lobbying costs during state budget talks this year, outspending every other government agency in California and breaking into the secretary of state’s Top 10 list of big spenders.

The sum came as a surprise to insiders who track the Capitol’s power brokers, and it raised eyebrows among critics who are disturbed by local governments paying more and more money for lobbying.

But Castaic Lake water officials, troubled by the second straight year of state budget cuts, said they took the determined position that it was well worth reaching deep into their pockets if they could manage to protect their funding.

Indeed, they credit their full-court-press campaign for helping them elude Gov. Pete Wilson’s budget-balancing property tax grab. In the end, the Castaic Lake Water Agency obtained an exemption from the governor’s plan to divert a portion of city, county and special district property tax revenue and give it to schools.

Although many local bodies sent lobbyists scurrying to battle the tax shift this summer, none matched the costly effort launched by the agency, which provides drinking water to the burgeoning Santa Clarita Valley, according to a report by Secretary of State March Fung Eu.

The Metropolitan Water District of Southern California, which is the granddaddy of California’s water wholesalers and covers a region of more than 15 million people, reported spending $76,702 in the period from April 1 to June 30. Like the MWD, the Castaic Lake agency buys from the state water project and then sells water at a profit--but within a much smaller area of 150,000 residents.

The Castaic water agency’s lobbying bill for the second quarter of 1993 also eclipsed those of the city of Los Angeles ($106,817), Los Angeles County ($211,138) and the massive Los Angeles Unified School District ($123,497).

And it was nearly as high as that of Philip Morris U.S.A., which aggressively fought not only a cigarette tax but smoking ban proposals, and the California Manufacturers Assn., backers of a much-ballyhooed tax credit for purchase of manufacturing equipment, one of the largest victories of the legislative year.

Proving again that it takes money to make money, Castaic water officials say that, by spending in six figures, they were able to hold onto at least $6.5 million in annual property tax revenue that the governor and the Legislature had threatened to slice off.

“I think the amount spent was in proportion to the amount of funds at risk,” said the agency’s general manager, Robert C. Sagehorn. “We needed to tell our story--that it was funding being put to a good and useful purpose and the state can’t just suddenly reach in and take it away.”

The amount of cash involved has led some to wonder whether the water agency hasn’t just upped the ante for other government entities seeking to preserve their funding.

“I’ve never seen a special district spend that kind of money on lobbying. That is a stunning amount of money,” said Kim Alexander, a policy analyst for California Common Cause. “It makes you wonder, where did their money go?”

Sagehorn said the agency paid for a variety of services.

“It involved having to communicate effectively with 120 people in the state Legislature as to our local problem--that we could not raise fees to make up what the state took away.”

Also included was a public relations blitz to educate the media and public about the consequences to be suffered by special districts if the property tax shift went through, he said.