BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 60
                                                          Page  1

Date of Hearing:   June 22, 1999

        ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE 
                       Mike Machado, Chair
        SB 60 (Hayden) - As Introduced:  December 7, 1998

  SENATE VOTE  :   33-0
  
SUBJECT  :   Metropolitan Water District of Southern California  
(MWD): ethics and water conservation

  SUMMARY  :   Prohibits MWD from using public funds on contracts to  
conduct political research on elected officials who vote on MWD  
policies, or on parties that may have matters pending before the  
Board of Directors (board).   Requires MWD to establish and  
operate an Office of Ethics (office).  Requires the office to  
adopt rules on specified subjects and seek to avoid potential  
ethical abuses relating to enumerated matters.  Requires MWD to  
place increased emphasis on various environmentally sound,  
cost-effective water conservation programs.  Specifically,  this  
bill  :  

  Ethics Provisions  :

1)Prohibits MWD and its member public agencies from spending  
  public money on contracts to research the backgrounds or  
  statements of economic interest of, or campaign contributions  
  to, elected officials who vote on MWD policies.  Prohibits  
  similar contracts concerning advocacy groups or interested  
  parties that may have matters pending before the board or its  
  member public agencies.

2)Requires MWD to establish and operate an office to regulate  
  the internal activities of its board members, officers, and  
  employees.  The rules of ethics (rules) would cover internal  
  disclosure, lobbying, conflicts of interest, contracts,  
  campaign contributions, and ethics.  Requires that the rules:

   c)   Prohibit any structure or identification that is likely  
     to mislead the public as to the association's true  
     identity, source of funding, or purpose if any association  
     of individuals or entities that includes board members,  
     officers, and employees, or of a member public agency of  
     MWD, is known by a name other than that of MWD or the  
     public agency.








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   d)   Be consistent with the intent and spirit of regulations  
     of the Los Angeles City Ethics Commission, the Fair  
     Political Practices Commission, and the Los Angeles County  
     Metropolitan Transportation Authority.

5)Requires the office to operate as an independent entity free  
  of political influence and be staffed with professional,  
  qualified persons.  Requires the office to do the following:

   f)   Submit the rules to the board for approval, and to adopt  
     procedures for protecting the confidentiality of sources,  
     the job security of "whistle blowers", and the due process  
     rights of the accused.

   g)   Make publicly available the results of any investigation  
     undertaken.

   h)   Propose, and the board to adopt, a schedule of  
     applicable penalties for rule violations by board members,  
     officers, staff, or contractors.

   i)   Educate the board, staff, contractors, and  
     subcontractors concerning the rules and investigate  
     complaints concerning the violation of the rules.

10)Requires that the rules seek to avoid potential ethics abuses  
  relating to:

   aa)  Business relationships between board members,  
     contractors, and vendors, and between board members and  
     public agency members.

   bb)  Solicitation of campaign contributions by board members,  
     officers, and employees, and receipt of contributions from  
     bidders, contractors, and subcontractors.

   cc)  Public notice and procedures for contracts of $50,000 or  
     more.

  Water Conservation :

1)Makes legislative findings and declarations that:

   b)   MWD reports conservation programs are 7% of the water  








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     resource mix for 1998, and has a 13% conservation goal for  
     Year 2020.

   c)   Conservation, water recycling, and groundwater recovery  
     are 12% of the water resource mix for 1998 with a 25% goal  
     for Year 2020. 

   d)   It is the intent of the Legislature that water  
     conservation, water recycling, and groundwater recovery  
     efforts be expanded by MWD.

5)Requires MWD to emphasize sustainable, environmentally sound,  
  cost-effective water conservation, water recycling, and  
  groundwater storage and replenishment measures.

6)Requires MWD to annually meet and review its Urban Water  
  Management Plan (plan) for its ability to achieve an increased  
  emphasis on cost-effective conservation, recycling and  
  groundwater recharge and take action necessary to meet goals  
  consistent with the plan.

7)Requires MWD to invite knowledgeable persons from the fields  
  of water conservation and sustainability to the annual  
  meetings to determine ways to achieve additional conservation,  
  availability, water quality, regional self-sufficiency,  
  environmental benefits, cost, employment, and economic  
  benefits.

8)Requires the MWD to submit an annual progress report to the  
  Legislature on or before February 1, 2001 or annually  
  thereafter on its achievement on an increased emphasis on  
  cost-effective conservation, recycling, and groundwater  
  recharge.

9)Requires MWD, in cooperation with its member agencies and  
  specified boundaries, the Water Replenishment District of  
  Southern California, local municipal water suppliers,  
  groundwater management entities, the County of Los Angeles,  
  and the U.S. Army Corps of Engineers, to consider programs of  
  groundwater recharge and replenishment, watershed management,  
  habitat restoration, and environmentally compatible community  
  development utilizing the resource potential of the Los  
  Angeles and San Gabriel Rivers, including stormwater runoff  
  from these rivers.
  








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  EXISTING LAW  

1)The Political Reform Act of 1974 applies to any state or local  
  government agency, and to every member, officer, employee, or  
  consultant of a state or local government agency, with  
  specified expectations not relevant to MWD.  The act, in part,  
  requires the filing of campaign statements, imposes conflict  
  of interest prohibitions, mandates the adoption of conflict of  
  interest codes, the filing of statements of economic  
  interests, and imposes gift limits and honoraria prohibitions.  
   The act, however, does not prohibit a local agency from  
  imposing additional requirements unless those requirements  
  prevent compliance with the act.

2)State law requires other regional agencies, such as the Los  
  Angeles County Metropolitan Transit Authority, to adopt  
  additional regulations concerning gift limits, lobbying  
  activities, filing of reports, and campaign contribution  
  limits.

3)The Metropolitan Water District Act authorizes the creation of  
  metropolitan water districts for the purpose of developing,  
  storing, and distributing water for municipal and domestic  
  purposes.  Under this law, the Legislature created MWD as a  
  supplemental water supplier to its 27 member agencies and  
  cities that now serve nearly 16 million customers in southern  
  California.

  FISCAL EFFECT  :   Undetermined.

  COMMENTS  : 

Last session, a nearly identical bill, SB 1875 (Hayden), passed  
the Assembly Water, Parks and Wildlife Committee by a vote of  
13-0 on July 8, 1998.  The bill also passed both houses of the  
Legislature but was ultimately vetoed by the Governor.  The  
Governor stated that the bill's water conservation provisions  
were unnecessary, citing MWD's investment of $8 billion since  
1982 to save water.  He also maintained that the bill unduly  
micromanaged MWD's programs and policies.

  Ethics Provisions:   

Last year, the Senate created a select committee to determine  
whether MWD should be restructured.  Creation of the committee  








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was prompted, in part, by reports that a partnership consisting  
of twelve (12) MWD member water agencies spent $12,000 in public  
funds to compile information on public officials in Riverside,  
San Diego, and Imperial Counties.  The partnership apparently  
opposed the district's position on transferring surplus water  
from the Imperial Valley Irrigation District to the San Diego  
County Water Authority.  The campaign was intended to search for  
possible conflicts of interest involving these officials and the  
Bass Brothers, a group of major Texas investors interested in  
the transfer.

This bill seeks to prevent a repeat of these and other  
questionable public relations activities that MWD is alleged to  
have participated in from 1996-98.  However, the district is  
already bound by the Political Reform Act of 1974.  Thus, MWD  
must already file quarterly lobbying expenditure reports with  
the State and board members must also file statements of  
economic interest.  Moreover, MWD's alleged violations are  
currently prosecutable under Penal Code provisions that prohibit  
the misuse of public funds.

The bill also prohibits MWD from utilizing public funds to  
conduct political research.  The author states that SB 60 does  
not prevent MWD from conducting its public awareness campaigns  
or legitimate advocacy, but rather attempts to ban covert and  
misleading approaches that essentially use taxpayer money to  
misinform ratepayers and their public representatives.

MWD has, however, already drafted an action plan that will  
implement many of the ethics provisions contained in this bill,  
including the establishment of an Office of Ethics and  
procedures for protecting the confidentiality of sources, the  
job security of whistle blowers, and the due process rights of  
the accused.  The General Manager is scheduled to present the  
action plan to the MWD board on July 13, 1999 for their  
consideration and approval.

  Water Conservation:  

MWD derives much of its water from the Colorado River.  The  
control, development, and utilization of the water resources of  
that river is nevertheless governed by various compacts, laws,  
treaties, and documents collectively referred to as the Law of  
the River.  California is allocated 4.4 million acre-feet (MAF),  
plus 50% of any excess surplus water pursuant to statutes, court  








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decisions, and contractual provisions.  California continues to  
use up to 5.3 MAF annually of Colorado River water by relying on  
apportioned, but unused water within the Colorado River Basin. 

SB 1082, Chapter 874, Statutes of 1997, required the Director of  
the Department of Water Resources to assist the Colorado River  
Board and the six California water agencies that derive water  
from the Colorado River in developing a plan for California to  
live within its 4.4 MAF entitlement.  Negotiations are currently  
underway with the federal government and other affected states  
to finalize this plan.

The author claims that one trillion gallons of Los Angeles  
regional storm water annually washes into the ocean, which is  
enough to meet the needs of 3,000,000 families. The author also  
states that MWD currently spends less than 1% on water recycling  
and groundwater recovery programs.  There exists a huge  
potential, therefore, for conservation.

SB 60 requires MWD to consider new water conservation programs  
and submit a report to the Legislature by February 1, 2001 or  
annually thereafter on its progress in achieving water  
conservation goals.  As California's take of Colorado River  
water will likely be reduced in the near future, these  
conservation efforts will help replace that lost water.

  REGISTERED SUPPORT / OPPOSITION  :

  Support  

California Municipal Utilities Association
Metropolitan Water District of Southern California
San Diego County Water Authority
  
Opposition  

None on file.

  Analysis Prepared by  :    Mark Hennelly / wpw / (916)319-2096