MWD Votes to Collect Even More Money from Taxes

For the third year in a row, MWD’s board voted to increase the amount of money it collects from property taxes. MWD has collected almost $800 million more than necessary to pay for items in its adopted budgets over the past three years, so the collection of more revenue from taxes was not, and is not necessary for MWD’s fiscal health.

Further, MWD’s board is raising tax revenue, one year at a time, without the context of a comprehensive financial plan. MWD needs long range planning and a sound long-term fiscal strategy to make responsible decisions instead of just continuing to raise and spend tax taxpayer monies.

Click here to read our letter.

Essential Means Essential… Not Excessive

Once again the giant Metropolitan Water District of Southern California is playing games with our money. This time they’re playing games with our tax dollars by claiming the tax increase they are asking for is “essential” when the taxes are, in fact, “excessive.”

MWD is back again this year, asking us to suspend the property tax rate limitations imposed by the California Legislature, using the excuse that additional tax revenues are “essential to the fiscal integrity of the District,” a showing MWD is legally required to make. But, MWD did not and cannot show that higher taxes are essential, at least not by any normal use of the term, meaning “absolutely necessary.”

We OPPOSE the Metropolitan Water District of Southern California on this issue because they have failed to make a factual showing that additional tax revenues are “essential to the fiscal integrity of the District.”  Why?  Because this finding would be impossible to make given that Metropolitan Water District has collected almost $800 million more than necessary to pay the actual expense items included in its adopted budgets over the past three years. Even with this extravagant spending, Metropolitan Water District still has substantial cash reserves that are nearly at the maximum level prescribed by the Board of Directors.

The fact that the Metropolitan Water District board chose to spend hundreds of millions of dollars on unbudgeted expenditures does not change the fact that these revenues were available to MWD and therefore the collection of higher taxes was not, and is not necessary. They have also failed to show why the other fixed revenue options they have available, such as the Readiness‐to‐Serve charge and benefit assessments, options that the Legislature clearly intended be used in lieu of property taxes, are not feasible. MWD is just using another gimmick to avoid the will of the voters, just as it continues to ignore the voter-passed limitations of Proposition 26.

For many of the same reasons, last month we OPPOSED MWD’s intent to issue up to $300 million of new debt to “reimburse” capital expenditures for projects funded from the General Fund and Replacement and Refurbishment (R&R) Fund. We opposed that move because it will obligate MWD to increase water rates without any opportunity for the public to be heard or even the need for an actual board vote for the rate increase. That action was nothing more than an inappropriate attempt to debt-finance very expensive turf rebates that have produced no significant water supply or drought relief.

These games need to stop.  MWD, stop playing with our tax dollars by claiming the taxes you are asking for are “essential” when they are, in fact, “excessive.” While you’re at it, stop collecting more money than you need every year to pay the bills. MWD’s lavish spending practices are hurting all Southern Californians.

LA Sues To Prevent Disclosure of Turf Grant Recipients

The Los Angeles Department of Water and Power is suing the Metropolitan Water District of Southern California to prevent release of information about the recipients of millions of dollars under a popular turf-replacement program.

The city department sued last week in Los Angeles Superior Court, seeking to block release of the information to The San Diego Union-Tribune.

The newspaper is seeking the names and addresses of people and businesses who have received checks through the program to encourage removal of water-hogging grass amid a historic drought.

According to the complaint, Los Angeles water customers may represent 20 percent of MWD’s turf removal rebate recipients. Regionwide, the Metropolitan Water District has issued $340 million in cash rebates this year for people who agreed to tear out their lawns.

Read the rest of the story here:

MWD spends $1.8 million on lobbying state officials

During the last California legislative session, the Metropolitan Water District of Southern California spent $1.8 million in ratepayer money on lobbying – more than any other public agency, except for Los Angeles County.  Steven Maviglio of the California Majority Report writes,  “Having spent millions to date, the Metropolitan Water District is doubling down on efforts to protect itself, even if that mean California water ratepayers will have to bear the cost.” 

In the 1990s, MWD’s spending and covert plans to protect its interests got so out of control that the legislature had to pass legislation and institute an ethics office.  To read the full story, click here: 

 

Expense reports, internal emails point to secret water PR campaign

SAN DIEGO – Team 10 has turned up expense reports and internal emails that call into question a public relations campaign designed to keep San Diego County paying skyrocketing water bills.

Documents show the region’s largest water agency, the Los Angeles-based Metropolitan Water District (MWD), spent money to join influential local agencies including the San Diego County Taxpayer’s Association and San Diego County Chamber of Commerce.

MWD officials have denied such a campaign exists.

A state court found the MWD violated California’s Constitution, statutes and common law when setting rates for 2011, 2012, 2013 and 2014. The San Diego County Water Authority claims overcharges of San Diego County ratepayers could exceed $2 billion over 45 years. The San Diego County Water Authority (SDCWA) predicts the county will be overcharged $54 million in 2014.

“It’s disgusting behavior for public officials,” said SDCWA assistant general manager Dennis Cushman. “I know to the core of what I know that there’s a good portion of that bill, $5, $8 a month that doesn’t belong on that bill.”

To read the rest of the story and watch the news cast, click here:  http://www.10news.com/news/investigations/expense-reports-internal-emails-point-to-secret-water-pr-campaign-07292014

Documents reveal ratepayer money used to fund secret PR campaign

Public documents show that the Los Angeles-based Metropolitan Water District of Southern California and some of its member agencies were developing a sub rosa campaign to buy influence and sway community leaders in San Diego County.

Documents show that the top MWD official participated in meetings on the development of a covert public relations campaign, the latest in a string of efforts by MWD and some of its member agencies dating back to the late-1990s, records show.

Eastern Municipal Water District’s records show that in 2012 MWD’s general manager, Jeffrey Kightlinger, participated in meetings on a secret public relations campaign in San Diego County being developed for MWD by Eastern and its consulting firm, Sacramento-based California Strategies. Eastern’s board of directors handled the project in closed sessions, though Eastern’s claims that the work was protected from public disclosure under attorney-client and attorney work product privileges proved meritless.

Through a series of Public Records Act requests in 1997 and 1998, the Water Authority unearthed a coordinated, multi-million dollar public relations campaign by MWD and 12 of its member agencies designed to scuttle the Water Authority’s deal to transfer water from the Imperial Irrigation District. The campaign, orchestrated by MWD and the so-called “Partnership for Regional Water Reliability,” included “opposition research” into the finances of all 120 California state legislators, then-Gov. Pete Wilson, and all members of the Water Authority and IID boards.

Public disclosure of the campaign created a backlash against MWD and spawned state legislation to reform MWD, including Senate Bill 60, which was signed into law in 1999. That bill was crafted to prohibit MWD and its member agencies from “any association structure or identification that is likely to mislead the public as to the association’s true identity, its source of funding, or its purpose.”

In 2011, the Water Authority discovered through Public Records Act requests that 20 MWD member agencies had secretly organized in the fall of 2009 under various names, including the “MWD Member Agency Managers Workgroup,” the “Anti-San Diego Coalition” and the “Secret Society.” Records showed that the group was advocating for policy and rate decisions that disadvantaged San Diego County to the benefit of MWD member agencies elsewhere.

In late 2012, the Water Authority became aware of activities in San Diego County that suggested MWD had launched another secret public relations campaign, this time through Eastern. The Water Authority’s Public Records Act request to Eastern produced documents that included a copy of Eastern’s $15,000-a-month contract with California Strategies. Eastern initially refused to provide another document that showed the scope of work the consultant was hired to carry out.

After more than a year of delay, Eastern released to the news media 88 pages of records on Nov. 27, 2013, and filed a petition with the court seeking to dismiss the case. In its court briefs and oral arguments seeking dismissal during a Dec. 4 hearing, Eastern’s lawyers told the court that all records had been produced. Eastern’s general manager, Paul Jones, signed a declaration under oath that all records had been produced. The court denied the motion to dismiss. On Dec. 20, 2013, Eastern released 1,033 pages of public records – more than 10 times the number of documents it had provided just two weeks before.

The records revealed that the public relations plan for MWD included staffing up a San Diego office lead by a “high integrity individual from the San Diego community,” polling and focus groups, and “message development and tactical refinement.” One document provided by Eastern shows the plan involved placing MWD representatives on key local boards, conducting one-on-one outreach with civic leaders in San Diego County and improving its local media presence.

Released records reference the “value of having discretionary funds available for business meals (within reason) and contributions to local organizations and programs.” Contributing money “may be tricky,” said a Dec. 7, 2012, email, “but not necessarily if done in modest amounts.” “The challenge we have is finding a way to subtly and effectively educate these leaders and other key organizations and individuals,” according to one of Eastern’s documents on Oct. 9, 2012. “However, doing this educating under the nose of the CWA presents a unique set of risks; hence our use of the term ‘subtly’ above.”

While Eastern played a lead role in developing the public relations strategies, records show that MWD’s general manager and a former general manager-turned-consultant were in on the plan from early on. The documents tout MWD’s ability to offer a pension, lifetime health benefits and a “base salary close to $200 k per year” for a San Diego-based team leader who could “implement MWD’s big picture vision.”

Part of the plan included labeling two lawsuits by the Water Authority challenging the legality of MWD’s rates as “petty,” and a threat to a solution in the Sacramento-San Joaquin Bay-Delta.

On Feb. 25, 2014, San Francisco County Superior Court Judge Curtis E. A. Karnow tentatively ruled that MWD violated cost of service requirements of California’s Constitution (Prop. 26), California’s wheeling statutes, the Government Code and common law when setting rates for 2011, 2012, 2013 and 2014. (For more information about the Water Authority’s lawsuits against MWD’s rates, and the tentative ruling, go to http://www.sdcwa.org/mwdrate-challenge.)

In a March ruling in the Eastern Public Records Act litigation, Los Angeles Superior Court Judge James Chalfant determined that the Water Authority’s records lawsuit against Eastern “led to the production of additional documentation.” On April 15, he approved an order declaring the Water Authority the prevailing party and said the agency is entitled to recovery of its attorneys’ fees from Eastern. On April 18, Eastern agreed to pay the Water Authority $95,808 in attorneys’ fees and costs; Eastern has not disclosed how much it spent on its own lawyers trying unsuccessfully to hide its misguided plan for more than a year.

To read the Board memo and documents obtained by the Water Authority’s Public Records Act request, go to http://www.sdcwa.org/public-records-eastern-municipal-water-district.

MWD Adopts Unnecessary Rate Increases for 2015 and 2016

Overcollection Now Stands at $352 million

The Metropolitan Water District of Southern California on April 8 raised rates for 2015 and 2016 despite having projected cash reserves of $840 million –$352 million more than its board-adopted maximum reserve limit. MWD’s board also voted to spend the over-collected revenue on unbudgeted expenses.

Officials from the San Diego County Water Authority and several of its 24 member agencies attended Tuesday’s hearing in Los Angeles to defend the region’s ratepayers and urge no water rate increases be adopted. However, despite compelling information that rate increases are unneeded, the MWD board adopted 1.5 percent increases for each of the next two years.

The Water Authority’s delegates to MWD voted against the rate increases not only because they are unnecessary, but also because they are based on the same flawed methodology that a judge in San Francisco Superior Court recently ruled violates the California Constitution, the California Government Code and the common law.

MWD has amassed hundreds of millions of dollars in recent months because it under-estimated water sales and over-estimated its expenditures. Instead of using the resulting over-collected revenue to provide rate relief next year, the MWD voted to spend it on unbudgeted expenses and continue its long history of increasing rates.

MWD’s 2015 and 2016 rates were adopted Tuesday along with the agency’s $1.64 billion budget for fiscal 2015 and its $1.69 billion budget for fiscal 2016. The Water Authority will account for higher costs from MWD when developing its rates for the Water Authority Board’s consideration in June.

For more information, go to http://www.sdcwa.org/mwd-adopts-unnecessary-rate-increases-2015-and-2016-while-over-collecting-350-million-ratepayers.

 

 

MWD overcollections now at $350 million

New figures show Southern California water ratepayers now paying $350 million more than necessary

In just one month, MWD over-collections jump by $30 million

 The Los Angeles-based Metropolitan Water District of Southern California, whose rate-setting practices affect 18 million people from Ventura to San Diego County, updated its forecast to show that it will over-collect an additional $30 million  from Southern California water ratepayers.

Just last month, MWD projected its ongoing practice of over-collection would cause its unrestricted reserves to exceed its board-established maximum by $320 million by the end of June. Now, that figure is up to $350 million.

The $30 million increase would have gone unnoticed, since it was not noted or highlighted by MWD when it released its updated budget documents at its Finance and Insurance Committee meeting on April 7.  Instead, an innocuous sentence with the new estimate was slipped into a 150-plus page document. MWD has said it plans to use the windfall to pay for things it never included in its budget, rather than give the money back to ratepayers or provide relief from rising water rates.

In March, the San Diego County Water Authority developed an online over-collection clock to help Southern California ratepayers understand the impact of the overcharges on their water district.   The clock counts how much MWD is over-collecting until the end of its fiscal year on June 30, 2014.  The clock – posted at www.mwdfacts.com – has been updated to reflect the new figures.

A drop-down menu below the over-collection clock allows users to find updated numbers for how much each MWD-member agency is being overcharged. Not sure which water agency represents you at MWD? Click here to see a list of water agencies by service area.

Over the past 21 months, Metropolitan has amassed cash reserves that are $630 million more than MWD needs to meet all of its budget requirements. Despite this cash infusion, Metropolitan is proposing even higher rate increases for 2015 and 2016. A planned property tax increase has been pushed to August.

MWD Over-Collection by Member Agency

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What can you do?

 

 

If we all demand answers, we can stop unnecessary water rate increases for the next two years.

 

Learn more about the over-collecting issue here.

Additional Metropolitan board reports on it’s over-collection practices can be found here:

Orange County Watchdog reports on millions flowing into MWD’s coffers

The Orange County Register recently reported on the Metropolitan Water District’s overcharges, highlighting some of the agency’s poor fiscal management practices.

 “Bathers, swillers and gardeners in Los Angeles will pay $66.68 million more than they should this year, according to San Diego’s calculations,” said the article. “Those who hydrate through the Municipal Water District of Orange County will pay $38.17 million more than they should. Customers of the Inland Empire Utilities Agency will pay $7.84 million more; Long Beach, $6.23 million; Glendale, $3.85 million; Anaheim: $3.55 million; Santa Ana, $2.12 million; Fullerton: $1.9 million; and, well, you get the picture.”

 The story quoted the Water Authority’s assistant general manager, Dennis Cushman. “Metropolitan is awash in cash,” he told the Register. “Over the past 21 months, Metropolitan has over-collected $600 million. They’ve blown the roof off of their cash reserve fund – it will be $800 million by the end of this year – and plan to spend the money on items they didn’t budget for, rather than providing relief for their ratepayers.”

 Continued the Register’s narrative: “Money certainly is pouring into Metropolitan’s coffers. On top of the fact that Met has raised water rates annually, the current drought means that Met is selling more water than it expected (as less is being pumped from the ground). Operating revenues are expected to be about $1.7 billion this year, up from $1.5 billion last year, up from $1.3 billion the year before, and up from $1.2 billion the year before that.”

 

Read the rest of the story at http://www.ocregister.com/taxdollars/water-606064-million-met.html.