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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.

Letter Library, Part 2 (Finance – long range plan/long-term willingness to pay)

Correspondence between MWD and Water Authority by Key Issue

Finance: Long Range Finance Plan

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[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
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[one_half]Draft Long Range Finance Plan (January 5, 2011) [/one_half]
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[one_half]Update on Rate Refinement Discussions (July 9, 2012) [/one_half]
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[one_half]Rate Refinement Workshop (August 16, 2012) [/one_half]
[one_half last]MWD’s response to Water Authority’s August 16, 2012 Rate Refinement Letter (September 7, 2012) [/one_half]
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[one_half]Re: Update on “Rate Refinement” Board Information Item 7-b (September 10, 2012) [/one_half]
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Finance: MWD Member Agencies’ Unwillingness to Sign Contracts

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[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
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[one_half]Member Agency Unwillingness to Sign Take-or-Pay Contracts (August 16, 2011) [/one_half]
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Letter Library, Part 1 (Official Statements/Sale of Bonds)

Correspondence between MWD and Water Authority by Key Issue

Official Statements/Sale of Bonds  [raw]
[one_half]Water Authority Letter [/one_half]
[one_half last]MWD’s Response [/one_half]
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[one_half]Water Authority’s Official Statement on Appendix A (September 22, 2010) [/one_half]
[one_half last]MWD’s Response to Water Authority’s September 22 Official Statement (September 23, 2010) [/one_half]
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[one_half]Water Authority’s Official Statement on Appendix A of MWD’s Draft Official Statement (December 9, 2010) [/one_half]
[one_half last]MWD’s response to the Water Authority’s December 9 Official Statement on MWD’s Appendix A (December 13, 2010) [/one_half]
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[one_half]Draft May Official Statement (May 16, 2011) [/one_half]
[one_half last]MWD’s Response to Water Authority’s May 16 Official Statement (May 24, 2011) [/one_half]
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[one_half]Draft Official Statement (August 22, 2011) [/one_half]
[one_half last]Director Foley’s Response to Water Authority’s August 22 Draft Official Statement (September 8, 2011) [/one_half]
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[one_half]Draft Remarketing Statement (February 13, 2012) [/one_half]
[one_half last]MWD’s Response to Water Authority’s February 13 Draft Remarketing Statement (February 14, 2012) [/one_half]
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[one_half]Re: Board Memo 8-2: Authorize the execution and distribution on the Official Statement in connection with the issuance of the Water Revenue Refunding Bonds (April 9, 2012) [/one_half]
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[one_half]Re: Agenda Item 8-8: Authorize the execution and distribution of Official Statements in connection with issuance of the Water Revenue Refunding Bonds (June 11, 2012) [/one_half]
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[one_half]Re: Board Memo : Authorize the execution and distribution of an Official Statement for potential refunding of Water Revenue Bonds (August 20, 2012) [/one_half]
[one_half last]MWD’s Response to Water Authority’s August 20, 2012 Letter re: Comments on Appendix A (September 4, 2012) [/one_half]
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[one_half]Re: MWD’s review of Water Authority’s August 20, 2012 comments on Appendix A (August 29, 2012) [/one_half]
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Raise a glass to greater water independence

Take a close look at that next glass of water from the kitchen faucet. Squint hard and you may see a reflection of the blood, sweat and tears it took to get it into your home.

A little history may help you see it. Think back to 1991. At the time, San Diego County got 95 percent of its water from the wholesaling bully up the coast in Los Angeles, the giant Metropolitan Water District of Southern California. The state was in the midst of severe drought. The water bully cut supplies to San Diego by fully 31 percent and warned of even more cuts, threatening economic disaster here until the “Miracle March” rains rescued the region.

Click here to read the story.

DWP to build groundwater treatment plants on Superfund site

The Los Angeles Department of Water and Power plans to build the world’s largest groundwater treatment center over one of the largest Superfund pollution sites in the United States: the San Fernando Basin.

Two plants costing a combined $600 million to $800 million will restore groundwater pumping of drinking water from scores of San Fernando Valley wells that the DWP began closing in the 1980s, the utility said. The plants also will ensure that other wells remain open despite pollution plumes steadily migrating in their direction.

The plans mark a major shift at DWP, reversing a trend of recent decades in which the utility has offset diminishing use of groundwater with imports from Northern California and the eastern Sierra.

“By 2035, we plan to reduce our purchases of imported water by half,” said James McDaniel, the DWP’s senior assistant general manager.

Click here to read the story.

San Diego loses financing fight with MWD

The Metropolitan Water District Board of Directors Tuesday dismissed pleas from powerful interests in the San Diego region to roll back increases in water rates, hold the line on property taxes and issue refunds to customers.

The San Diego County Water Authority argued that Metropolitan should:

• Reduce a planned 5 percent water rate increase in 2014 to 3 percent and send $75 million of its “excessive reserves” back to customers. Of that, $16.38 million would go the San Diego water authority, Metropolitan’s largest buyer.

• Continue past policy of gradually reducing its property tax rate. Metropolitan instead suspended the planned rate reduction, which will cost property owners about a dime per $100,000 in assessed valuation. Keeping the tax rate stable will save Metropolitan about $4.4 million and cost property owners in the San Diego region about $800,000.

Click here to read the story.

Despite Protests from Community and Water Agencies, MWD’s Over-Collection from Ratepayers Will Continue

Despite efforts by business groups, community activists, mayors and several Southern California water agencies to stop  unecessary rate hikes and increased property tax collection by the Los Angeles-based Metropolitan Water District of Southern California, the board voted to increase spending by $75 million instead of returning the money or rolling back rate increases.

The Southeast Water Coalition Joint Powers Authority on Monday sent a letter to MWD’s board of directors urging the giant water wholesaler to maintain current water rates instead of charging 5 percent more in 2014.

“Given that MWD has evidently underestimated its FY2014 water sales, SEWC calls on the Board to… hold the current rate,” the letter said.

The coalition also criticized MWD’s plan to suspend the state’s limit on the agency’s property tax rate, saying it appears to be an “end run around the California legislature’s corrective action of 1991 to hold MWD’s property tax rate to bond costs actually paid.”

San Diego Mayor Bob Filner, working with a business alliance including the San Diego Regional Ecomonic Development Corporation and Chamber of Commerce, led the charge to protect the regional economy.  The Mayor, Chamber and EDC submitted letters to MWD protesting the rate and tax increases.  Oceanside Deputy Mayor Jerome Kern and Poway City Councilman Jim Cunningham also spoke on behalf of their ratepayers to show MWD  how its rate increases hurt the average family.

The San Diego County Water Authority also objected and sent a letter questioning MWD’s budget actions because MWD has not developed a long-range financial plan to ensure its ongoing obligations and investments will be supported by its member agencies. Water Authority delegates to the MWD board asked MWD to refund the $75 million in overcharges to ratepayers across the region, including $16.4 million to San Diego County, and forego additional tax money.

Officials at Burbank Water and Power also sent MWD a letter of concern on Monday, saying they were “disappointed, to say the least” about the rapid growth of MWD’s reserves.

“It appears that MWD has missed an important step for good governance,” said Burbank’s letter. “The lack of clear and direct communication as to the current state of MWD’s budget and reserves has done real damage to the credibility of MWD management.”

Burbank officials said they don’t support MWD’s plan for a 5 percent rate increase in 2014. “The facts simply no longer support it,” their letter said.

Long Beach representatives also implored the board to roll back next year’s planned increases and Mayor Robert Foster from Long Beach sent a letter.

Why Government Robs You Blind: Because It Can — They Make and Enforce the Laws and Frighten You into Submission

Between pass-throughs and rate hikes and surcharges and transfers to other uses, you might have noticed your bills for water and power have been soaring for years.

You ain’t seen nothing yet — utilities are the certain cash cow for government at all levels, a reservoir of money that can be used just about anyway your elected officials want if they are lucky enough to operate their own water and/or power systems like the LADWP.com (a web address that makes clear it’s a business, not a government agency).

To read more, click here.

Another water fight means $17 million

The San Diego County Water Authority is once again locked in a financial battle with its major supplier, this time over $17 million worth of rate increases and property taxes.

For the average ratepayer and property owner, the annual amount at stake is negligible, coming to less than what they would pay for one cup of coffee a month.

But the contest is worth millions of dollars cumulatively to the Metropolitan Water District of Southern California and its biggest customer, the county water authority.

The dispute is twofold.

To read more, click here.