San Diego leaders rankled by 'secret' L.A. water deal

By: GIG CONAUGHTON - Staff Writer | Saturday, July 8, 2006 9:57 PM PDT ∞

San Diego County water leaders call it a troubling "secret deal" and "preferential treatment" worth billions of gallons of water a year to the city of Los Angeles.

Others say they see nothing sinister.

But they add that a deal between Los Angeles and the Department of Water Resources and the state Department of Water Resources ---- blessed by the mighty Metropolitan Water District but without the knowledge of Metropolitan board members ---- raises questions about how the agency operates. Members of the agency, including San Diego County and Los Angeles, are scheduled to discuss the deal Monday.

Metropolitan's former general manager apparently OK'd a deal two years ago without board approval for the Los Angeles Department of Water and Power to tap directly into the State Water Project ---- a story that just recently came to light. Some San Diego water officials suggest that could open the door for Los Angeles to push to buy water directly from the state, bypassing Metropolitan and "shifting costs" ---- possibly increasing what Metropolitan charges San Diego County residents and other Metropolitan customers others pay in the future.

San Diego County Water Authority board members said they and other Metropolitan members were shocked to learn of the deal in a Los Angeles Daily News article last month.

The deal will let the Los Angeles Department of Water and Power build a connection into the State Water Project ---- the 600-mile-long system of dams, reservoirs and aqueducts that deliver rainfall and snow-melt from water-rich Northern California to dry Southern California.

The connection will allow Los Angeles, a Metropolitan member agency, to bypass Metropolitan charges and buy 13 billion gallons of "non-State Water Project" water a year from Northern California farmers.

Unhappy water officials were particularly shocked to learn that former Metropolitan General Manager Ron Gastelum gave the deal Metropolitan's approval two years ago ---- without ever consulting Metropolitan's board.

Gastelum, who retired from Metropolitan in late 2004, was hired as executive vice president of the Los Angeles Chamber of Commerce in September, but also left that post last week.

Brouhaha brewing?

Meanwhile, Water Authority officials were probably more unnerved than other Southern California water agencies ---- they were the only ones to send a formal letter asking for explanations ---- for several reasons:

- They've had a long-running rivalry and unhappiness with the city of Los Angeles. In a long-running legal dispute that was eventually rejected in 2004, the Water Authority said an arcane Metropolitan water-allocation system could let Los Angeles "steal" water from San Diego County residents in emergencies such as droughts.

- Metropolitan has opposed similar deals in the past ---- most prominently, the Water Authority's historic 2003 deal to buy billions of gallons of water a year from farmers in Imperial Valley.

Metropolitan was asked for its OK on the Los Angeles deal, reportedly, because Metropolitan is a contract agency with the state Department of Water Resources and allowed to buy water from the State Water Project.

Los Angeles is not ---- a fact that could raise all new questions about the deal.

When Water Authority board members met in June, their delegates to the Metropolitan board, George Loveland, Joe Parker and Bud Pocklington, said the deal smacked of "special treatment for Los Angeles ---- and left them filled with doubts.

"Are there any other deals we're not aware about?" Pocklington asked.

Nothing sinister


Other water leaders, however, said last week there was nothing wrong with the deal.

Gastelum, in a letter he sent to Metropolitan board members Monday, said that he asked Metropolitan's current general manager, Jeff Kightlinger at the time ---- who was the agency's general counsel two years ago ---- if he was allowed to make a decision on the Los Angeles deal without bringing it to the board.

Gastelum said Kightlinger told him he was allowed to do so.

Gastelum said in his letter that he gave Metropolitan's approval because the Los Angeles deal did not involve the use of any Metropolitan pipelines or facilities, and because the deal fit into the Metropolitan board's policy to encourage member agencies to find new water supplies instead of relying solely upon Metropolitan for water.

Kightlinger echoed those statements Thursday, saying that he did tell Gastelum it was within his power as general manager to approve the deal unilaterally. But he said he also advised Gastelum to bring it to the board for approval anyway.

"I said, 'Why don't we wait and bring it to the board?' " Kightlinger said. "I thought it would be something the board would be interested in."

Gastelum could not be reached for comment Thursday.

Meanwhile, Kightlinger and Metropolitan Board Chairman Wes Bannister said Thursday that Metropolitan board members will get an opportunity to discuss the deal and the decision-making process in detail when they meet in Los Angeles Monday. Bannister said the board would decide "which direction to go" then.

Bannister said he agreed with Gastelum's rationale for approving the deal.

"If I understand everything correctly, I'm not convinced that anything done was sinister," he said.

However, Bannister said he expects Monday's meetings to include lots of questions.

"This strikes at the heart of every board-management relationship," he said. "At what point does the general manager need to keep the board informed?"

Jealousy, or new water grab?


Water Authority unhappiness could be because the city of Los Angeles has simply reached a better deal for its water transfer than the 2003 deal the Water Authority struck.

When the Water Authority reached its deal in 2003 to buy billions of gallons of water from farmers in Imperial Valley for the next 45 to 75 years, officials had no way to get the water to county residents.

So, they also agreed to pay Metropolitan a "rental" fee to ship the water through Metropolitan's pipelines.

But they've always argued that Metropolitan charges too much.

Loveland and others suggested they think the Los Angeles deal could mean the Water Authority should be able to lobby Metropolitan for a cheaper rental rate.

But Kightlinger, Bannister and others say the two deals are vastly different. The Water Authority had to use Metropolitan pipelines for its water-transfer deal. The Los Angeles deal will let Los Angeles build a connection directly from the Los Angeles Aqueduct to the State Water Project, and completely bypass using any Metropolitan pipes.

The water deal raises questions about whether the door could be opened for an even bigger water grab than just buying water from Northern California farmers. Los Angeles has a storied history when it comes to bold moves to come up with water to sustain its ever-growing population ---- and Loveland suggested Southern California should be wary of the idea of Los Angeles tapping into the State Water Project.

Los Angeles carried out the most infamous water-grab in the West's history, building its own aqueduct 250 miles to Owens Valley in the early 20th century. Depending upon who's telling the story, the deal allowed Los Angeles to either buy water from Owens Valley, or "swindle" it away from its residents.

Under the terms of the new Los Angeles deal, the city would only be allowed to buy the 13 billion gallons of water a year it has agreed to buy from Northern California farmers ---- and would not be allowed to take any State Water Project water.

But Loveland said he has heard that the connection Los Angeles plans to build could deliver more than twice the amount it is buying from farmers.

Could Los Angeles be setting itself up for a bid to bypass Metropolitan again, to be able to apply to become a State Water Project contractor, and buy directly from the state?

Kightlinger said he doubted that, because it would require Metropolitan to change its own complicated State Water Project contract.

But Bannister said that was one of the many questions he expected Metropolitan board members to ask Monday.

"Now you're talking real policy (decisions)," Bannister said. "That's why I'm saying I don't know which direction the board is going to go."

Contact staff writer Gig Conaughton at (760) 739-6696 or gconaughton@nctimes.com.

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