Water Wars Continue in Smaller Arenas : Little public good is served by flaps involving Castaic Lake agency and Santa Clarita

California’s water wars are far from over, though the current combatants aren’t as well known as some in the past. As in earlier years, the disputes are intense and do little to serve the public interest.

Player No. 1 is the Castaic Lake Water Agency, a public wholesaler similar to the Metropolitan Water District. The agency delivers State Water Project supplies from the California Aqueduct to up to half of the Santa Clarita Valley’s 160,000 residents.

The agency’s latest brush with controversy involves two matters. It has delayed half a dozen water projects in the region in order to pay for the new Rio Vista water treatment plant, which will come in at about $36 million over its $80-million budget. And when Rio Vista opens--with its $6-million headquarters building, $2-million conservation garden and $100,000 decorative water globe and fountain--the plant will produce treated water that won’t be needed by any existing customer.

Now The Times has reviewed records showing that a top agency official and three board members helped shape millions of dollars in projects benefiting Newhall Land and Farming Co. while they held personal financial interests in the firm. Newhall is the biggest landowner in the Santa Clarita Valley.

Robert Clark, the water agency’s attorney, said their actions were “in full accordance with the law” and involved no conflicts of interest or wrongdoing. However, at least one request for an investigation has been filed with the state’s Fair Political Practices Commission.

At best, poor judgment was shown by the officials; they should have had the sense to avoid such an appearance of impropriety.

The situation cannot be fully considered without a mention of the dispute between the Castaic Lake Water Agency and the City of Santa Clarita (Player No. 2). The agency has brought two lawsuits against Santa Clarita over the city’s $1.1-billion redevelopment project. City officials want to use future property taxes to finance recovery over the next 30 years from damages caused by the 1994 Northridge earthquake.

The lawsuits claim that the water agency is entitled to some of those property taxes and could lose $48 million needed to pay its own debts. Los Angeles County and state Atty. Gen. Dan Lungren have now joined the legal action on the water agency’s side. It’s a mess in which the only certainty is a further erosion in public confidence.