2 Bills Target Troubled Water District

A south Los Angeles County water district that was accused by state auditors of overspending, overcharging customers and lax management would undergo tough financial reforms under two bills approved Thursday by state lawmakers.

The bills to reform the Water Replenishment District of Southern California, one by state Sen. Martha Escutia (D-Whittier) and another by Assemblywoman Sally Havice (D-Cerritos), were overwhelmingly approved by the Assembly and the Senate.

Gov. Gray Davis has yet to signal whether he will sign the bills into law, but they are supported by many of the 43 cities served by the district, as well as by the district’s board of directors.

Water District Board President M. Susan Carrillo said the board already has agreed to adopt many of the recommendations made in a scathing state audit issued last year.

“This legislation will just codify what we are already doing,” she said.

The district serves 3.5 million people in the south end of Los Angeles County, including some of the poorest communities in the region. A state audit released in December harshly criticized the district for raising water rates by as much as 200% since 1990 and stockpiling a $67-million reserve over the last 10 years.

The audit also found that the previously obscure district was spending millions of dollars on highly paid lobbyists and public relations firms and had failed to document spending for staff travel and meals.

The district does not directly serve homes and businesses. Instead, it charges municipal and private water companies to pump water from underground aquifers. The district replenishes the underground water supply with water purchased from the Metropolitan Water District.

But cities say that its fees are passed on to residents and business owners in higher water bills.

The district increased its fee from $51 per acre-foot in 1990 to $162 per acre-foot in 1996. Since then, the board has gradually reduced the fee to $112 per acre-foot this year. Critics, however, say the fee should be dropped to about $100 per acre-foot. (An acre-foot is the amount of water used by two typical homes in a year.)

The fee hikes and other problems in the district prompted 13 cities and seven water companies served by the district to form the Municipal Water Consumers Alliance to press for reforms. In addition, eight cities have begun the process of seceding from the district.

Lakewood City Councilman Marc Titel, a spokesman for the alliance, called the legislation a victory but said he is cautiously watching the district to see if it implements the reforms.

“This new legislation requires the WRD to change a decade of bad management, and that will demand much of the WRD’s board of directors,” Titel said.

The Escutia bill would limit the district’s reserves to $10 million, with only minor adjustments each year, and would require an annual independent audit.

The companion bill by Havice would tie the district’s water rates to the Consumer Price Index and require the district to use state standards to solicit contracts and require competitive bidding for any contract for more than $25,000.

Escutia, who requested the state audit last year, called the two bills “a good package” and was optimistic that the legislation would bring about positive changes in the district.