HMG OP-ED: This past Monday, the Assembly Committee for Local Government, chaired by Sen. Cecilia Aguiar-Curry (D-Davis), held a hearing in Sacramento – during the height of the George Floyd related protests when the capitol was nearly empty.
The hearing debated Sen. Steven Bradford and Asm. Cristina Garcia’s SB 625, which would place Commerce-based Central Basin Water into receivership, dissolve the board of directors and cancel its November 2020 election, disenfranchising over 2 million mostly minority voters in 24 cities in Los Angeles County.
There is nothing fiscally wrong with Central Basin; the bill was authored because its board of directors can’t decide on its officers.
There is an open seat on the board, so there are only seven directors. One side says that four is a majority, and appointed officers of the board at the January reorganization; the other side argues that five is a majority and will not allow Central Basin to conduct its regular business.
There is a pending court case on July 23 that would solve that question, but Asm. Garcia apparently can’t wait, pushing for committee meetings during a potential riot.
Central Basin has $8 million in reserves, is current with its bills, owns an $8 million building free and clear, boasts nearly $100 million in infrastructure assets, and an independent auditor recently issued an opinion that had no issues with the District’s financial statements.
The District’s efforts for an open government have earned the Transparency Certificate of Excellence by the Special District Leadership Foundation.
There are no safety issues as Central Basin buys its water, and then sells at wholesale prices to water purveyors.
Despite the reports, three directors, two of them appointed by a bill passed in 2016 by Garcia, and five disgruntled employees, who’s leader was recalled from the Lake Forest City Council in 2018, levied allegations of financial mismanagement – without documentation – that gave Garcia an opening to author her bill.
(It should be noted here that the five employees called into the 11:00 hearing, waiting for over 45 minutes, then giving their name and voicing support for the bill.)
The agency was operating normally before the in-fighting began, with a concerted effort to cut $1 million from the budget through a combination of revenue increases and expense cuts.
The board accomplished that goal, cutting the budget by $400,000 while passing a new meter charge that would have generated $600,000 in revenue.
Or so some of the directors thought they solved the problem.
Leading the battle for the meter charge increase? The now outspoken critic pushing hard for the receivership bill, Garcia-appointed Director John Oskoui.
Oskoui convinced four other directors to pass a monthly .12 cents per meter charge – not the $12 per month some employees and purveyors were claiming on social media – a nominal amount to help a fellow water company.
Yet how did the water purveyors inside Central Basin’s boundaries react? They want a spot at the Water Corruption Trough so they immediately filed a lawsuit to stop the increase.
It is worth noting here that when the Metropolitan Water District and Water Replenishment District – after Central Basin passed their meter charge – raised their rates by 4%, the same purveyors and cities who are suing Central Basin for a .12 center per month charge did not object to MWD or WRD’s increase.
Incredibly, the city of Downey, who is John Oskoui’s employer, joined the lawsuit, along with the city of Lakewood, which is in Assembly Speaker Rendon’s district.
Equally as incredible, both cities were on the record supporting SB 625 on Monday’s assembly hearing agenda.
The lawsuit put the increase on hold and $600,000 in revenue went down the drain.
That’s when the board in-fighting began, the group of four had seen enough from the Garcia appointed directors and took charge.
But they wouldn’t stop the lawmakers charge to the Water Corruption Trough.
Monday’s committee meeting was laughable; on live video attendees could see two of the Senators on their phone texting for most of the meeting.
When it came down to questioning, one Senator asked if the process was indeed a privatization of the agency.
That was it, no other questions were asked.
If a committee is part of a process that is going to decide an unprecedented takeover and dissolution of a solvent public agency, shouldn’t they know the true financial health of the agency, asking questions and requesting documentation? Asking for financial statements and a balance sheet? Bank statements? The last audit?
How can they propose a treatment – in this case drastic treatment – if they don’t look for the disease?
Because they want a spot at the Water Corruption Trough.
Aguiar-Curry asked for other questions then quickly called for a vote, which was unanimous, 8-0, to move the bill forward.
It is the height of legislative irresponsibility to move the bill; dissolving an elected board, cancelling an election, and disenfranchising mostly minority voters is sure to draw the attention of state and federal voting rights advocates.
The implications are enormous not to mention the inevitable unintended consequences.
If WRD takes the agency over, what’s to stop WRD Board Members and employees from leveling allegations of fiscal mismanagement in the future and demand that Metropolitan Water District take WRD over?
Even more chilling, what’s to stop the next assemblymember or state senator who doesn’t like the way a public agency is run to author a similar bill?
Dissolve a City Council? There are several cities in East Los Angeles that would qualify to be administered under SB 625, before the pandemic.
With a majority of Central Basin cities in their respective districts, it is up to State Senator Bob Archuleta (D-Norwalk) and State Senator Lena Gonzales (D-Long Beach) to stop the privatization of water in Los Angeles and kill the bill.
It should’ve never got this far, the two should have paid an angry visit to the bill’s author, Sen. Steve Bradford (D- Carson) objecting to the bill.
Especially since Bradford has .00001 interest in the agency, which could earn him the nickname “One Block Bradford.”
When asked how much of Central Basin is in Bradford’s district, an indignant Phil Hawkins, who is a former Assemblyman and long-time Central Basin Director, told HMG, “Bradford’s district has one block inside our boundaries.”
Other senators faced with the same situation stopped a bill they did not approve of, using well-worn political maneuvers.
Once the bill passes the state assembly, the bill must come back to the senate for a concurrence vote on the amendments.
A senator can go to the Senate President pro Tempore, who is Toni Atkins, voice their concern about the bill, document their concerns, and convince the senate president to pull the bill.
If the senate president wants to sit on the fence and risk the wholesale selling of the bill process to senators without interest, senators can then go to the Chair of the Senate Committee on Governance and Finance and plead their case.
If convinced, the chair would not allow the bill out of his committee, and it is never voted on.
They could do the same with the Chair of the Senate Appropriations Committee.
Finally, if the bill were to make it to the senate floor, senators are allowed to speak about why the bill should not pass, and ask fellow colleagues to vote no.
And it would be justified.
Many questions surround this bill, HMG cannot get a straight answer on whether the L.A. County Supervisors support the bill, 4th District Supervisor Janice Hahn, who has most of Central Basin in her district, told HMG she knew nothing about it.
Legislative Representative Faith Conley, who signed the letter of support without Hahn’s blessing, will not return phone calls.
Conley’s letters spewed the same lies that the directors and disgruntled employees at Central basin allege.
Emails into Downey Mayor Blanca Pacheco requesting documentation of the city’s support went unanswered.
Conflicts of interest and pay to play also surround the bill, supported by HMG’s investigation of huge campaign finance donations and violations related to the authors of the bill, Garcia and Bradford.
And on Wednesday, Bradford showed no interest in the bill, like he just carried the water for Garcia so he could get a spot at the Trough.
Bradford did not show up to the appropriations hearing, making attendees wait 40 minutes before moving on; consequently, the bill was brought forward by Ian Calderon.
The height of irony since Calderon’s’ uncles, Ron and Tom, built the Water Corruption Trough, procuring no bid contracts while being involved in pay-to-play schemes at Central Basin.
Ian himself was caught feeding at the Trough, using government credit cards to buy personal items.
There is precedent to the Central Basin situation, facts that Garcia and Bradford conveniently overlooked and left out of their gut and amend bill, and facts Calderon was ignorant about.
During the appropriations hearing, Calderon talked about school districts that were put into receivership. What he failed to mention is that they did not dissolve the district nor terminate the board members.
Compton Community College and Inglewood Unified School District, unaccredited and insolvent, unlike Central Basin, went through a similar process, yet their respective board members were not terminated, the district was not dissolved, and their elections were not cancelled.
Yet here is SB 625 winding its way through the legislature, with lawmakers wanting to belly up to the Water Corruption Trough, willing to dissolve a duly elected board, cancel an election, and disenfranchise over 2 million mostly minority voters.
There are hundreds of water purveyors in California; if passed, SB 625 will give them a big seat at the Trough.
If a purveyor doesn’t like their wholesaler, they no longer need to go to the senator or assembly person in their district, they can find anybody in the state to sponsor a bill similar to SB 625.
And belly up to the Water Corruption Trough.