Two water bills to restructure Central Basin Municipal Water District await governor signature

By on August 29, 2016
Central Basin Municipal Water District

Two water bills seeking to restructure and reform the Central Basin Municipal Water District (CBMWD) are now awaiting Governor Jerry Brown’s signature after having passed their respective houses. Both bills follow an audit of CBMWD eight months ago by the state which criticized the district for political and a host of other mismanagement practices and questionable business decisions.

The audit called for more than 30 recommendations to reform the district. All of the recommendations have been completed by the two signature-pending water bills will put in place legal structures for the CBMWD’s board for future decision-making.

Senate Bill 953 would prohibit CBMWD’s board of directors from changing existing ethics rules and their benefits without a majority two-thirds vote by the board. It will also limit the use of sole-source contracting. The bill has been authored by state Sen. Ricardo Lara (D-Long Beach).

The second bill, A.B. 1794 would create a new governance structure to ensure CBMWD effectively fulfills its responsibilities and is more accountable to the more than two million people its services. The bill requires a seven-member board replacing the current five-person board structure. Four board members would be elected by residents within the district and the three other directors would be appointed by water purveyors of the district. The bill also establishes a Technical Advisory Committee which will be required to review the District’s budget, and review and approve proposed changes related to procurement and coding related to ethics, director compensation, and benefits. This bill was authored by Assemblywoman Cristina Garcia (D-Downey).

Lara’s S.B. 953 passed the Senate by a vote of 36-2 on Thursday; Garcia’s A.B. 1794 passed the Assembly 80-0 on Wednesday. Speaking on behalf of both bills, Sen. Lara said, “These bills are part of our accountability package to bring reforms to this embattled water district.”

In December 2015 the state’s audit of CBMWD was laden with inadequacies and questionable practices including: inappropriately using amendments to extend and expand contracts; hiring unqualified staff; violating state law by improperly approving the establishment of a legal trust fund without adequate public disclosure; engaging in questionable contract practices by avoiding competitive bidding; and, the loss of its liability insurance coverage. The audit also expressed a concern that the district has had six general managers since 2010 and the time of the audit. The audit states that the district’s board had failed to provide the district with stability in its general manager position.

While awaiting a response from the governor Assemblywoman Garcia said, “All I can do is remain hopeful. We have two smart bills and we’ve worked with the stakeholders. Hopefully, the governor sees and rewards us for our hard work.”

Although the two bills are supported by many within the district’s footprint the CBMWD’s board voted four to one on Monday in opposition of the bills.

“I look forward to working with the (water utility officials) but I still think it’s bad governance,” said Kevin Hunt, the district’s general manager. “The disenfranchisement of voters is a bad precedent.”

Speaking in support of the two bills, a San Gabriel Valley open-government advocate, Gil Aguirre pointed out that, “Water has become a very technical issue and you should have people with the technical expertise making recommendations. The board should be driven by technical expertise, not by political motives.”

“Central Basin ratepayers deserve accountability and transparency from their leaders,” said Senator Lara. “Throughout the year we have addressed the issues that have distracted the District from focusing on its mission and service. … I am proud to join Assemblywoman Garcia in advancing our package to enact much needed reforms designed to restore trust among the community and move the District forward.”

The Central Basin Municipal Water District currently serves more than two million people in 19 cities in Southeast Los Angeles. Rather than serving consumers directly, Central Basin sells water to 41 different cities, mutual water companies, water districts, investor-owned utilities, and private companies.