BILL ANALYSIS                                                                                                                                                                                                    




                               
              SENATE LOCAL GOVERNMENT COMMITTEE
             Senator Richard K. Rainey, Chairman



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|BILL NO:SB 60                         |HEARING: 4/7/99         |
|--------------------------------------+------------------------|
|AUTHOR:  Hayden                       |FISCAL:Yes              |
|--------------------------------------+------------------------|
|VERSION: 12/7/98                      |CONSULTANT:   Gordon    |
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                METROPOLITAN WATER DISTRICT

                 Background and Existing Law  

Created by the Legislature in 1928, the Metropolitan Water  
District of Southern California (MWD) is the largest water  
district in the state.  MWD provides 60% of the water to 16  
million people in Los Angeles, Riverside, Orange, and San  
Bernardino, San Diego, and Ventura counties.  MWD, a water  
wholesale agency, distributes water to 27 different member  
agencies across Southern California: 14 cities, 12  
municipal water districts, and the San Diego County Water  
Authority.

Recently, allegations have arisen that the MWD financed a  
campaign against the proposed San Diego Water Authority's  
transfer of water from the Imperial Irrigation District.  
The "Partnership for Water Reliability," a conglomeration  
of nine of MWD's member agencies, has also been accused of  
hiring a public relations firm to do opposition research on  
public officials and others involved with the water  
transfer.  Some allege that these two campaigns were  
coordinated.  Members of the MWD Board come from the same  
agencies which make up the Partnership.  These charges  
prompted several legislators to establish a Senate Select  
Committee on Southern California Water Districts  
Expenditures and Governance to study these allegations and  
related issues.


                         Proposed Law  

Senate Bill 60 prohibits the Metropolitan Water District of  
Southern California from using public funds to conduct  
political research.

SB 60 requires the establishment and operation of an Office  
of Ethics with responsibilities for: regulating the  
behavior of its board members, officers and employees;  
protecting the confidentiality of sources, the job security  
of "whistle blowers," and the due process rights of the  
accused; making publicly available the results of any  
investigations; adopting rules related to business  
relationships between board members, contractors, vendors,  
and public agency members; regulating the solicitation of  
campaign contributions by board members, officers,  








employees, bidders, and contractors; and preventing the use  
of coalitions as a means to advance public opinion where  
use of aliases is likely to mislead the public as to the  
group's true identity or funding source.

The bill mandates public notice and procedures for  
contracts of  $50,000 or more.

SB 60 requires the District to place increased emphasis on  
various sustainable, environmentally sound, cost-effective  
water conservation programs, and produce an annual report  
on water conservation beginning February 1, 2001.


                           Comments  

1.   Time for a change  .  The Metropolitan Water District has  
incensed lawmakers and  others with its alleged actions.   
SB 60 enacts a reform package that makes MWD less likely to  
engage in similar activities again.  By helping to keep the  
MWD in check, SB 60 makes the giant water district more  
accountable to the 16 million people who use MWD water.

2.   Piling on  ?  While holding MWD to a higher ethical  
standard is a worthwhile goal, the MWD is already bound by  
the Political Reform Act of 1974.  Quarterly lobbying  
expenditure reports are filed with the State and the Board  
members must file statements of economic interest.  What  
extra regulations should be mandated on MWD that aren't  
currently covered in the Political Reform Act?  

3.   Unnecessary roughness  ?  SB 60 bars MWD and its member  
public agencies from funding front groups that research  
elected officials and concerned parties.  MWD's alleged  
violations are already prosecutable under Penal Code  
provisions prohibiting the misuse of public funds.  The  
Committee may wish to consider whether SB 60 will  
substantially prevent future abuses or just adds more laws  
on top of existing ones.  The Committee may wish to  
consider whether MWD needs more regulations or better  
oversight from existing enforcement mechanisms.

4.   Vetoed before  .  With the exception of the requirement   
for the annual water conservation report, this bill is  
identical to the enrolled version of SB 1875 (Hayden, 1998)  
Governor Wilson vetoed.  Wilson endorsed the "additional  
ethical procedures," but objected to the bill's water  








conservation policies.

5.   Double referred  .  This bill has previously been heard  
in the Senate Agriculture and Water Committee where it  
passed 9-1.

  
               Support and Opposition  (4/1/)

  Support  :  Metropolitan Water District of Southern  
California, California Municipal Utilities Association.

  Opposition  :  Unknown.