Central Basin to Appoint Three New Directors to Board

December 29, 2016 by · 1 Comment 

Hoping to restore the public’s trust in the scandal-ridden Central Basin Municipal Water District, the makeup of the agency’s board of directors will soon change to include three new appointed directors, with a call for nominations starting next week.

Assembly Bill 1794, signed by Gov. Jerry Brown in September, requires the agency to appoint three directors based on a vote by its customers. The three new members will join the five publicly elected members currently on the board. However, in 2022 – following the 2020 census – the board’s makeup will change again, transitioning to four elected and three appointed directors.

Current board members were recently briefed on the change that will go into effect after the first of the year, starting with a call for nominations on Jan. 3

Unlike elected board members, appointed directors will be required to meet certain qualifications and restrictions mandated by the state law that strives to eliminate potential conflict-of-interest issues. The appointed directors must have five years of water experience and will be limited to one term. They are prohibited from receiving a car or communications allowance, and cannot own more than .5% of a private company.

Central Basin Board Director Leticia Vasquez questions the process for the three new appointed directors during the Dec. 19 meeting. (EGP photo by Nancy Martinez)

Central Basin Board Director Leticia Vasquez questions the process for the three new appointed directors during the Dec. 19 meeting. (EGP photo by Nancy Martinez)

Three separate selection committees will be formed to make the appointments, with each group making one appointment.

The first group will be made up of representatives of the Central Basins’ five largest water users, the cities of Vernon and Santa Fe Springs, the Golden State Water Company, Liberty Utilities and California Water Service. The second group will include a representative –likely the city manager – from each of the 19 cities the agency services. The third director will be selected by a vote of all retail agencies that is proportional to the number of service connections each retailer has.

The process outlined did not sit well with current board members.

Director Leticia Vasquez, who represents the cities of Lynwood, South Gate, Florence-Graham, Willbrook and portions of Compton in District IV, repeatedly expressed her concern that not every user will have an equal voice. Although the agency services 41 large water users, only five of those will get to vote under one category, she pointed out.

“It just doesn’t seem fair,” she complained. “Again, we’re leaving people out.”

Central Basin’s General Manager Kevin P. Hunt said every customer would be represented under one of the categories. He reiterated that the process is dictated in the legislation, adding that the agency had limited input.

Nomination ballots are due Jan. 24 and will be opened in public the following day. By Jan. 31, voting ballots will be delivered to purveyors who will have until Feb. 21 to return them. The results will be announced Feb. 22 and the new directors will be installed March 3.

Hunt acknowledged that while he disagrees with the process, it is the last thing state auditors recommended the agency do following a scathing report that found widespread-mismanagement, conflicts of interests and poor leadership at the agency.

He added the process will provide good candidates and ensure that selections are not made in a back room.

Director Phillip Hawkins disagrees, calling the state measure a “bad bill” that is “basically illegal.”

“We have to get over 40,000 to get voted in while five agencies can put a director on a public agency, I don’t see how that could ever work,” he complained.

Hunt acknowledged that while there use to be a lot distrust of the water agency, things are turning around, referring to the Central Basin’s successful bond sale last year, which increased its bond rating.

“We’ve come a long way,” Hunt said.

State lawmakers based the bill on state auditors’ recommendations that called for more technical expertise to the board.

“The Central Basin Accountability bills will better protect consumers and begin to restore the public’s trust and ensure the District stays on track once and for all,” the bill’s author Assemblywoman Cristina Garcia said when the legislation was signed into law.


Candidates Hope to ‘Change’ Central Basin

September 8, 2016 by · Leave a Comment 

The Central Basin Municipal Water District is a public agency, with an elected board that sets policy and oversee its operations, the main purpose of which is to wholesale imported water to cities, mutual water companies, investor-owned utilities and private companies in southeast Los Angeles County.

In recent years, the agency has been plagued by accusations of wrongdoing involving how it awards contracts and lax oversight of staff, with some going so-far as to call its board members and staff everything from inept to corrupt.

Now, two local city officials are among the candidates vying for a seat on the Central Basin board in November, purportedly in hope of turning the scandal-ridden agency around.

Candidates running to represent Division 1 on the board of directors include Bell Gardens Mayor Pedro Aceituno, Pico Rivera Mayor Pro Tem Bob Archuleta, Luis Marquez of Downey, and Xochitl Sandoval and Yvette Silva, both residents of Bell Gardens. James Roybal, who currently serves as the Board’s vice president has opted not to run again.

Joshua Acevedo of Bell Gardens will also be on the ballot, but has told EGP he is suspending his campaign to instead concentrate on running in 2017 for a seat on the Bell Gardens City Council.

The race will be one of several on the Nov. 8 General Election ballot.

Division 1 of the Central Basin covers the cities of Bell Gardens, Downey, Montebello, Pico Rivera, West Whittier-Los Nietos and unincorporated areas of Los Angeles County. Directors are elected to serve four-year terms.

Archuleta told EGP he wants to help Central Basin improve its image and recover from a history of financial mismanagement and questionable contracts.

Pico Rivera Mayor Pro Tem Bob Archuleta is one of the candidates vying for a seat on the Central Basin Water District Board of Directors. (Courtesy of Bob Archuleta)

Pico Rivera Mayor Pro Tem Bob Archuleta is one of the candidates vying for a seat on the Central Basin Water District Board of Directors. (Courtesy of Bob Archuleta)

“For years, the general public has asked for change,” he said. “I believe I am uniquely qualified to clean up and reform this agency.”

Archuleta was elected to the Pico Rivera City Council in 2007 and currently serves as a presidential appointee to the United States Military Academy at West Point.

He says during his stint on the city council crime has gone down and retailers and developments are now flocking to do business in Pico Rivera. Conditions at the city’s parks and on city streets have improved since he took office, Archuleta told EGP.

Now he says he’s confident he can help turn things around at the Central Basin, where he blames failed leadership for widespread mismanagement issues identified in an audit by the State Controller. The audit slammed the agency for questionable decisions, including the loss of the agency’s liability insurance, failure to use competitive bidding in awarding contracts and for allowing overly generous benefits and gifts for board members.

“I will not tolerate corruption at this agency, I will provide clean and affordable water,” he assured. “I will stop corruption, government waste, and fight to reduce current water rates.”

Xochitl Sandoval of Bell Gardensis one of the candidates vying for a seat on the Central Basin Water District Board of Directors. (Courtesy of Xochilt Sandoval)

Xochitl Sandoval of Bell Gardensis one of the candidates vying for a seat on the Central Basin Water District Board of Directors. (Courtesy of Xochilt Sandoval)

Sandoval too sees the water agency as rife with problems. An assistant gaming supervisor at The Bicycle Casino, Sandoval told EGP she feels she can make a difference at the agency because she is not a “career politician.”

“I do not owe any political favors to anyone,” she emphasized. “I will bring an end to the pay-to-play practices and also stop awarding contracts based on nepotism.”

Sandoval has some municipal government experience, having served as a Bell Gardens traffic and safety commissioner.

“It’s time for average citizens to get involved and get the corrupt politicians and greedy special interests groups out of our water board,” she told EGP.

First elected in 1999, Aceituno is the longest sitting member on the Bell Gardens City Council.

Aceituno did not respond to EGP’s phone call and emails seeking an interview for this article, but according to his candidate filing with the Registrar-Recorder/County Clerk’s Office he identifies himself as a “water advocate.” In 2007 a Central Basin press release cited his work on a conservation grant to integrate water-saving measures at public parks and facilities, making it the first city in the region to embrace a citywide conservation program.

Central Basin also credited the then-mayor for his efforts in creating the plan that incorporated innovative conservation measures, which included installation of synthetic turf at soccer fields, wireless valve controller system for irrigation and the installation of waterless urinals and high-efficiency toilets at public facilities.

But Aceituno is also on a city council, which, despite ongoing deficits and much needed costly infrastructure improvements, has repeatedly opted to not increase water rates, which have remained unchanged for 20 years.

EGP also repeatedly tried to reach Luis Marquez and Yvette Silva for comment, but emails and calls were not returned.

Meanwhile, Archuleta is out lining up endorsements and contributions to his campaign. He has received the endorsements of several local officials, including Bell Gardens Councilwoman Jennifer Rodriguez.

He believes his experience and record in Pico Rivera has prepared him for working on large budgets, long-term planning, both which resulted in citywide improvements, developments and funding for a multi-million dollar underpass.

“I want to bring that change to Central Basin,” he said.

Several local municipalities, including Commerce and Montebello, have long criticized the Central Basin, taking issue with rate hikes, the latest of which was approved last month,

Currently, the Central Basin board includes Robert Apodaca, Art Chacon, Leticia Vasquez, Phillip Hawkins and Roybal.

Over the years, there have been numerous published reports of dysfunction on the board, citing incidents of board members getting into shouting matches during meetings. At one point, the FBI served search warrants at the agency’s offices in connection with their corruption investigation into former Assemblyman Tom Calderon, who’s consulting practice did work for the Central Basin and served on the board of a contractor hired to do work for the water agency.

If elected, Sandoval vows to end excessive perks and travel allowance and to get the board back to doing the business of delivering clean and inexpensive water to communities.

For his part, Archuleta says he plans “to be transparent and invite all to participate, and to “get confidence [in the agency] back up.”

Archuleta, however, is no stranger to government investigations. In 2010 he was investigated by the District Attorney’s office for not reporting political gifts when he repeatedly reused a special elected official movie pass at a Pico Rivera theater. The case was eventually closed and no charges were filed, but Archuleta reimbursed the theater and returned the pass.

He also self-reported the investigation to the Fair Political Practices Commission, which later issued a fine. The issue did not impact his reelection campaign in 2011 or in 2015, when he received the highest number of votes. His term expires Nov. 2019.

Under state law, an elected official may not hold two different public offices simultaneously if the offices have “overlapping and conflicting public duties.” Citing a previous opinion, the Office of Attorney General Kamala Harris informed EGP serving on the city council and on the board of a water district would be deemed incompatible offices.

Archuleta assured EGP he intends to adhere to the law and relinquish his seat on the Pico Rivera city council if elected. The same rule would apply to Aceituno.


Central Basin Activates ‘Ethics Hotline’

February 18, 2016 by · Leave a Comment 

Just two months after the Central Basin Municipal Water District’s management and board of directors were slammed in a state audit for demonstrating “poor leadership” and widespread mismanagement, including violations of state law, an independently monitored “Ethics Hotline” is now ready to take complaints and reports of possible wrongdoing by the district.

The district said the new hotline is part of Central Basin’s “strengthened Ethics Policy that includes a fully independent process for reviewing complaints,” adopted in the wake of the state audit.

The state audit, released in December 2015, criticized Central Basin’s board of directors for acting in a way that impeded the district’s ability to effectively meet its responsibilities and to safeguard the district’s long-term financial stability. The audit also found that directors had failed to maintain stability in top management; violated state law in handling of district funds; engaged in questionable contracting and bidding practices and had unduly enriched part-time directors with outsized health benefits, car allowances and by paying for unreasonable travel and meal expenses for both board members and staff.

“The district remains committed to ensuring the public’s trust in our agency,” said Central Basin Board President Robert Apodaca. “The independent ethics hotline provides an opportunity for individuals to anonymously report unethical activity without the fear of retribution.”

In December, state auditors also recommended allowing the district’s 48 customers — most of them water utilities in cities and unincorporated areas of southeast Los Angeles — be allowed to elect board members rather than the public.

At the time, Central Basin General Manager Kevin Hunt said the district was committed to implementing the majority of the state’s 25 recommendations, but in a letter co-signed by Apodaca, called the election proposal “premature.”

“Denying two million citizens the right to direct representation on major water policy issues is contrary to the basic tenets of America government and should only be a last resort, if ever,” they wrote.

Earlier this month, Sen. Ricardo Lara, D-Bell Gardens, introduced legislation that if approved could change the makeup of Central Basin’s board of directors.

Lara’s bill, S.B. 953, would require the Los Angeles County Board of Supervisors to appoint two additional members to Central Basin’s five-member board. Appointees would be required to live in the district and have “knowledge of the water industry and familiarity with the role and responsibilities of a municipal district.”

Appointees could be from water utilities operating in the district, a change Lara said could translate to increased oversight.

S.B. 953 also prohibits the awarding of contracts without competitive bidding, accept in an emergency.

The district will work with legislators and water utilities on the issue, said Central Basin spokesperson Joe Legaspi according to media reports.

In the meantime, Hunt said Central Basin “has taken significant action to strengthen the Ethics Policy, the hotline is an example of one of those actions.”

“Key to the District’s progress will be an unhindered investigation process of those issues that negatively impact our ability to serve the 1.7 million residents in our service area,” said Hunt, the district’s sixth general manager since 2010.

Reports can be made through two avenues:

—Central Basin representatives or members of the public who feel comfortable reporting possible violations can do so through the district’s Administration and Ethics Committee. Reported potential violations are placed as an agendized item for the following Administration and Ethics Committee;

—People wishing to remain anonymous can submit reports through the independent hotline, which are then referred to the independent investigative firm, Nixon Peabody. The firm will review the complaints to determine if the complaint merits further investigation, appropriate disposition, including referring the information to the County District Attorney, Fair Political Practices Committee, the district’s Administration & Ethics Committee, General Manager or another appropriate venue.

The hotline can be accessed on the District’s website by visiting http://www.centralbasin.org/en/anonymous-ethics-reporting-hotline/, by toll-free telephone at 844- 910-0004, by fax at 215-689-3885 or by email at reports@lighthose-service.com.

Audit: Central Basin Municipal Water District ‘Mismanaged’

December 10, 2015 by · Leave a Comment 

A new state audit finds that poor leadership, a lack of planning and widespread mismanagement have threatened the long-term financial health of the Central Basin Municipal Water District, which serves 2 million people in southeast Los Angeles County, it was reported Friday.
The report released Thursday by the California state auditor revealed that the district avoided competitive bidding for contracts, had six general managers in five years and spent thousands of dollars on potentially illegal gifts of public funds to support community events, the Los Angeles Times reported.
“They have had poor leadership on the board and instability at the top executive levels for many years. The role of the financial director has been unstable as well,” Margarita Fernandez, the state auditor’s chief of public affairs, said in remarks reported by The Times. “This makes it difficult to put an effective structure in place to provide for the agency’s financial viability.”
The Central Basin Municipal Water District, which was established in 1952, serves 24 cities and six unincorporated areas throughout southeast Los Angeles County. It has a five-member board of directors elected by the public.
Auditors found that the agency repeatedly failed to earn enough revenue to cover costs and that its board improperly set up a trust fund to pay for a project’s environmental review without adequate public meetings or safeguards to ensure that expenditures of $2.75 million from the fund were appropriate.
According the state report, the district spent $500,000 to investigate those expenditures and to deal with a lawsuit filed by a board member who sought to recover for the agency some of the money transferred to the fund.
District officials said the audit provides valuable insights and that the agency is addressing the state’s recommendations, some of which have already been implemented, The Times reported. The completed changes include developing a strategic plan, establishing an ethics policy and strengthening financial controls.

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