California’s legendary water wars vaulted into a new chapter this week with accusations that water agencies in Orange and Los Angeles counties operate a “secret society” to exclude San Diego County from participation in critical water decisions.
Orange County officials countered with their own indictment of San Diego County water officials, accusing them of bogging down meetings of managers with “one dumb question after another” that forced creation of the separate group in order to get any work done.
Adding to the controversy was the fact that water managers who excluded San Diego from their discussions hired a consulting firm, Cordoba Corp., that has been a behind-the-scenes participant in a series of controversial Southern California contracts since the early 1990s.
According to the San Diego County Water Authority, what it all means is “those agencies joined together in a secret shadow government to control water rates and other decisions at California’s largest public water agency and to discriminate against the San Diego County Water Authority and its ratepayers.”
The San Diego authority insists that the managers’ meetings were used to make decisions that later were ratified by the board of the Metropolitan Water District of Southern California.
Terry Francke, founder of Californians Aware, said California’s Brown Act prohibits public bodies from using staff or other intermediaries to reach agreements behind the scenes.
“If they’re [Metropolitan Water District] not trying to disadvantage a member … then they’ve been at least pretty clumsy in how they’ve handled this,” Francke said.
The Metropolitan Water District is a water wholesaler comprising 14 cities and 12 regional water agencies that cover six counties, including the most heavily populated areas of Los Angeles, Orange, Riverside and San Diego counties. The water supplies come from the Colorado River and the state water project, which brings water south from Northern California.
A Longstanding Conflict
The roots of this conflict go back decades when the San Diego authority, the largest member of the Metropolitan Water District, began questioning the rates it was asked to pay for water from the Colorado River transported through Metropolitan Water District lines before reaching the San Diego authority’s equipment.
In 2009, managers of a dozen water agencies in Los Angeles and Orange Counties that were part of the Metropolitan Water District formed a special group and hired consultants. Membership was by invitation, and the San Diego authority wasn’t invited. Dues were collected to pay the consultants' fees, which combined ran about $14,000 a month, according to the records released by the San Diego Water Authority.
“It’s just a working group of managers,” said Kevin P. Hunt, general manager of the Municipal Water District of Orange County, one of the first to join the special group of managers. “There was nothing secret about it.”
For years the same managers have met once a month on a Friday to discuss mutual problems and upcoming issues. San Diego goes to the regular monthly manager meetings, but it is excluded from the special “working group” sessions.
Hunt said the special group was formed because San Diego dominated the monthly managers meetings, “asking one dumb question after another.” He said San Diego would take as much as 2½ hours with “relatively stupid questions, to be blunt.”
He said the goal of the group was just to get work done. “We haven’t done anything wrong whatsoever.”
Replied Dennis Cushman, assistant general manager of the San Diego authority: “Clearly I would completely disagree with Mr. Hunt’s characterization. I guess if I was in Kevin’s shoes, I would have to come up with a reason or rationale. That’s an interesting approach.”
A Public Records Dump
In 2010, the authority filed a lawsuit against the Metropolitan Water District, accusing it of overcharging San Diego for transporting the Colorado River water. Profits from moving the Colorado River water, according to the suit, were used to keep water rates down for the rest of the water agencies in the Metropolitan Water District.
In Orange County, those members are the cities of Anaheim, Fullerton and Santa Ana and the Orange County district, which includes the rest of the cities. The Orange County district buys water from the Metropolitan Water District and resells it to its member agencies.
This week, the San Diego authority sent news organizations a binder with more than 500 pages of email and other documents it obtained under the California Public Records Act from the Metropolitan Water District.
San Diego officials said the documents “paint a disturbing picture of how decisions are made on major programs and projects that impact the lives of 19 million Californians who depend upon MWD [Metropolitan Water District] for all or part of their water supplies.”
It specifically noted emails sent by Chris Theisen, assistant director of public works for Beverly Hills, that refer to the group as a “Secret Society.” And one of the emails reads, “Ron Gastelum is the former MWD CEO that the Secret Society hired as an advisor.”
In 2009, Gastelum, a lawyer, stepped down as CEO of the Metropolitan Water District and became special counsel for water and energy at Cordoba Corp. Cordoba is a politically well-connected firm that has been involved in controversial contracts.
Last year the Los Angeles Times reported that Cordoba hired a project manager who had been imprisoned for nearly a year on corruption charges.
Cordoba was awarded a controversial streetcar planning contract in Santa Ana despite being ranked last of three bidders.
In 1992, the Los Angeles Times reported the Los Angeles Unified School District spent millions of dollars in an unsuccessful, years-long effort to create a unified computer system. As part of that project, Cordoba was given a short-term $14,700 contract that ballooned to more than $1.4 million despite one official trying to cancel it for "non-performance."
The contracts were awarded without competitive bidding or a survey of other qualified contractors, the Times reported.
In another instance, a 1993 Times article stated that following the Rodney King riots, a business consortium that included Cordoba spent more on administrative costs than was spent on a city-run program to clean up damaged buildings.
One email cited by San Diego quoted Hunt from the Municipal Water District of Orange County as stating that if another manager objected to paying the $7,000 dues, “No pay, no play.”
The Metropolitan Water District is scheduled to adopt its next round of water rate increases at its April meeting.