City will audit MWD

Paul Clinton

CIVIC CENTER -- Burbank continued its thorn-in-the-side relationship

with the Metropolitan Water District on Tuesday when the City Council

voted to conduct an independent audit of the agency.

Council members said they decided on the audit -- on a 4-0 vote with

David Laurell absent due to illness -- because the MWD has not fully

disclosed how it financed its newly constructed $182-million headquarters

in downtown Los Angeles. The building opened in December, 1998.

MWD officials did not return calls for comment but have previously

denied any wrongdoing in connection with their management of public

funds.

City officials have accused the water agency of paying for the bulk of

its downtown building with reserve funds, a situation they said could

result in a rate hike in the not-so-distant future. The reserve funds are

intended to help the agency avoid rate hikes in lean years.

Burbank Councilman Bob Kramer said the audit will bring the agency’s

finances to light, putting pressure on the MWD to act responsibly.

“I think it’s the prudent thing to do,” Kramer said Wednesday. “I

think this audit has the possibility of keeping the rates from going up.”

The city hired the Florida-based Barrington-Wellsley Group to conduct

the audit, which will cost $27,500, according to a city report. Kramer

said it could take up to six months.

Barrington-Wellsley audited the MWD for Burbank in 1996. That audit resulted in a $700,000 refund to the city, Kramer said.

Former Councilman Ted McConkey, who supported the earlier audit when

he was on the council, said the move makes sense.

“Any agency that is institutionalized tends to forget the real reason

for its existence,” McConkey said. “That is to serve the customers.”

Kramer has publicly pressured the agency to explain how it financed

its headquarters. On Tuesday, he cited an April 23 MWD staff report to

support his claim that the MWD has spent approximately $90 million from

the Water Rate Stabilization Fund on the building.

On Nov. 22, Kramer and other city officials met with MWD General

Director Ron Gastelum. Gastelum defended the agency’s spending policies

and denied that any rate stabilization money was used for the

headquarters building.

Appearing at the dais Tuesday, MWD Assistant Chief Financial Officer

Antoinette Christovale echoed that statement. Referring to a letter sent

by the agency to the city on Dec. 2, Christovale said “we indicated we

used general fund monies to pay for the headquarters building. We did not

use Water Rate Stabilization Fund monies.”

But Kramer denounced the agency’s lack of candor about its finances

Wednesday, saying Christovale misled the council.

“Every time the MWD talks, they lie,” Kramer said. “They just want us

to shut up and go away.”

MWD provides drinking water for 27 cities and water districts in

Southern California. Approximately 50% of the city’s water comes from the

agency.