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Calderon’s Cash Cow

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LA WATCHDOG - The Central Basin Municipal Water District has been the focal point of an investigation by the FBI into the “allegations of criminal activity” by Ron Calderon, 55, a sanctimonious State Senator who lives in Montebello. 

While the FBI has not disclosed any specifics of the sealed warrant associated with its June 5 raid on Calderon’s Sacramento office, Brian Hews and Randy Economy of the Los Cerritos Community News have uncovered $5 million in no bid, sweetheart deals with Pacifica Services, a company controlled by Ernie Camacho, reputed to be one of the most influential figures in East LA politics. (Political Contributor Banked Millions From Central Basin Municipal Water District Contract) 

Furthermore, over the last decade, rumors have circulated in the water world about questionable contracts for large scale capital projects, overstaffing, and generous compensation packages (and benefits) that have led to higher than expected rates for Central Basin’s customers. 

But to get a better understanding of who is footing the bill for this corruption and who is overseeing this rogue agency, we need to get a better understanding of the little known Central Basin Municipal Water District

Central Basin is one of the 26 member public agencies served by the Metropolitan Water District of Southern California, the $12 billion water wholesaler that imports water from Northern California and the Colorado River to serve over 18 million Southern Californians, almost half of the State’s population. 

Like MWD, Central Basin is also a reseller/wholesaler of water, but significantly smaller, serving 1.7 million people living in a 227 square mile area in southern Los Angeles County. However, many of the Ratepayers in the 27 cities that the District serves have some of the lowest incomes and highest unemployment rates in the County and can ill afford to pay for the millions in corruption. 

Unfortunately, the five elected Directors of this public agency do not have the necessary organizational, technical, or financial experience to oversee an organization that has over $125 million in assets and $50 million in revenue as well as an ambitious capital expenditure program.  Rather, they appear to be political hacks who unaware of their fiduciary duty to the public and are very good at obeying the wishes of their political bosses, overlooking massive amounts of fraud, and victimizing low income Ratepayers. 

Also at fault are Central Basin’s principal customers who have been unwilling to question or contest the District’s ever increasing administrative fees that have more than doubled over the last five years. Rather, they have passed along the costs to their Ratepayers. 

The District’s five largest customers accounted for 75% of its revenue. 

These customers include three investor owned utilities, including California Water Service Company, part of a New York Stock Exchange listed company with over $400 million in revenue, and Golden State Water Company, a subsidiary of NYSE listed American States Water Company that has over $1 billion in annual revenue. 

The City of Santa Fe Springs is the largest municipal customer, but its leaders appear not to have made waves, possibly in fear of political retaliation. 

The Water Replenishment District of Southern California (“WRD”) is also one of the top five customers.  But this public agency with $186 million in assets that serves 4 million people in Los Angeles County has not challenged Central Basin, its ever increasing fees, and its unqualified directors. 

Nor have any of WRD’s constituents stepped up to the plate, including the $400 million Long Beach Water Department and the Los Angeles Department of Water and Power. 

Now is the time for the knowledgeable industry grownups led by the Metropolitan Water District to take charge and conduct an open and transparent investigation (some would aptly call it a proctologic exam) of the operations, finances, and management of the Central Basin Municipal Water District, the thieving politicians and their cronies be damned, or better yet, tossed in the clink.

 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee,  the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
-cw
 

 

 

 

CityWatch

Vol 11 Issue 52

Pub: June 28, 2013

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