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Audit of water agencies sought in southeast L.A. County

Assemblyman Ricardo Lara seeks to review rates, infrastructure and administrative costs, legal fees and other factors that may be contributing to steep hikes in rates customers pay.

March 03, 2012|By Sam Allen, Los Angeles Times

The water bill at Maria Arizmendi's home in Bell has gotten so expensive that she's cut back on gardening and started using paper plates. Often, when it's time to shower, she heads over to the home of a friend, who is served by a different utility.

Arizmendi, 70, said she pays about $50 a month for water, but her friend pays roughly $20 every two months.

"There must be something that's not working right," said Arizmendi, a retired L.A. County employee who lives alone. "It just doesn't make sense what they put in these bills, and when you call, you can't get them to pick up, or you can't get an answer."

High water costs have long been an issue in southeast Los Angeles County, where working-class communities are served by a complex network of public and private water agencies that often operate with little public scrutiny. That could change this week, when officials with several local water agencies are called before a legislative audit committee in Sacramento for a hearing.

Assemblyman Ricardo Lara (D-Bell Gardens) is proposing a sweeping audit of the region's water policy and rate structures, which he said could be a first step to legislation regulating water fees.

Lara, who is the chairman of the audit committee, said his request was prompted by complaints over high rates from consumers as well as a recent series of stories in The Times about questionable spending by one of the agencies, the Central Basin Municipal Water District.

Central Basin has awarded millions of dollars in contracts to organizations linked to its political allies, including a nonprofit run by a former board member and a consultant whose brothers serve in the state Legislature, The Times reported last year. The water district also approved an unusual $172,000 public relations agreement in which it paid an outside consultant to produce positive Internet articles "written in the image of real news."

The district's administrative surcharge, which it adds to the cost of imported water, has increased from $40 per acre-foot in 2006 to $70 this year, the district said in an email. The district also levies a $10 annual fee on all parcel owners in its service area, which covers 24 cities in southeast L.A. County.

Another local district Lara is focusing on, the Water Replenishment District, has raised its assessment from $138 to $244 per acre-foot over the last six years. Last year, a Superior Court judge ruled that the replenishment district imposed the charges improperly.

Lara is also targeting the much larger Metropolitan Water District, which distributes imported water throughout Southern California. And to learn more about private water retailers, he has included in his request the California Public Utilities Commission, which regulates investor-owned utilities.

"It's time for all these agencies to come clean," Lara said. "The costs are crippling my constituents."

Public outrage was stoked last year when Golden State Water Co. announced that it was planning a 21% rate increase in the area starting in 2013. The proposal was met with protests throughout the fall from residents in the city of Bell, including Arizmendi, who is a Golden State Water ratepayer. (Her friend, who also lives in Bell, is served by Maywood Mutual Water Co.)

Bell was already reeling from a massive public corruption scandal at City Hall that resulted in criminal charges against eight former city leaders. The scandal sparked a wave of resident activism in Bell that has spilled into the water rate fight.

In October, Lara organized a town hall meeting to address the problem.

Representatives from Golden State Water, Central Basin, the Water Replenishment District and Metropolitan Water District all attended, but Lara said he was unsatisfied because it remained unclear to him exactly why the rates were increasing so sharply.

His audit request calls for a review of rates, infrastructure and administrative costs, legal fees and other factors that could contribute to the increases. A formal hearing on the request will be held Wednesday.

In an interview, Lara said he wanted to analyze the system "from source to tap" in order to streamline it and cut out wasteful spending.

"A comprehensive look at water delivery in our area has never been done … and I think it's greatly needed," he explained. "We have to see how this is all connected."

At the same time, Lara said he was concerned about reports on contracting decisions at Central Basin, which sells imported water to Golden State Water, along with other cities and water companies in the region. Several cities, including Lakewood, Santa Fe Springs and Huntington Park, have specifically called for an audit of Central Basin, a wholesaler based in the City of Commerce.

Lara said additional water districts may be examined as well. If his request is approved, the final decision on the scope of the review will be made by the Bureau of State Audits, a nonpartisan office.

A Central Basin spokeswoman said the district planned to cooperate fully with the request. Representatives for the Water Replenishment District and Metropolitan Water District also said they would cooperate.

Mitch Zak, a spokesman for Golden State Water, said that the company was doing everything possible to keep rates low and that it supported any effort to bring more transparency to the issue.

Arizmendi said she felt lucky that she was still able to afford her water bill even though it means regular trips to her friend's home. Some in her community are in even more desperate straits.

"It's sad," she said. "Companies are getting richer and richer and richer, and they don't think about families that need something to keep living. Water is so important to every individual in this world."

sam.allen@latimes.com

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