BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 60
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SENATE THIRD READING
SB 60 (Hayden)
As Introduced December 7, 1998
Majority vote 

  SENATE VOTE  :33-0 
  
  WATER, PARKS & WILDLIFE         12-0                LOCAL GOVERNMENT  
                    8-0                             
  
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|Ayes:|Machado, Dickerson,       |Ayes:|Longville, Pacheco,       |
|     |Aanestad, Baldwin,        |     |Corbett, Kaloogian, Soto, |
|     |Calderon, Florez,         |     |Thompson, Thomson,        |
|     |Frusetta, Kuehl, Margett, |     |Torlakson                 |
|     |Strom-Martin, Thomson,    |     |                          |
|     |Wayne                     |     |                          |
|     |                          |     |                          |
|-----+--------------------------+-----+--------------------------|
|     |                          |     |                          |
 ----------------------------------------------------------------- 
  APPROPRIATIONS      21-0                                         
  
 ----------------------------------------------------------------- 
|Ayes:|Migden, Brewer, Ackerman, |     |                          |
|     |Ashburn, Battin, Cedillo, |     |                          |
|     |Davis, Hertzberg, Kuehl,  |     |                          |
|     |Maldonado, Papan, Romero, |     |                          |
|     |Runner, Shelley,          |     |                          |
|     |Steinberg, Thomson,       |     |                          |
|     |Wesson, Wiggins, Wright,  |     |                          |
|     |Zettel, Longville         |     |                          |
|     |                          |     |                          |
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  SUMMARY  :   Prohibits the Metropolitan Water District (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  :







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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; and,

   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; and,

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








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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; and,

   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  
     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; and, 

   d)   It is the intent of the Legislature that water conservation,  
     water recycling, and groundwater recovery efforts are 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.








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8)Requires 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 United  
  States 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.
  
  EXISTING LAW  :

1)States that 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)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)Authorizes the creation of metropolitan water districts for the  
  purpose of developing, storing, and distributing water for  
  municipal and domestic purposes.  Under the Metropolitan Water  
  District Act 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  :  Unknown

  COMMENTS  :   Similar legislation, SB 1875 (Hayden) of 1998, was  
vetoed by the Governor.  The Governor stated that the bill's water  







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conservation provisions were unnecessary, citing MWD's investment of  
$8 billion since 1982 to save water.  He also maintained that the  
bill unduly micro-managed 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 was  
prompted, in part, by reports that a partnership consisting of 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.

This bill also prohibits MWD from utilizing public funds to conduct  
political research.  The author states that this bill  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  







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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 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 three million 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.

This bill 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.


  Analysis Prepared by  :    Mark Hennelly / W., P. & W. / (916)  
319-2096 


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