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Special districts are California's "hidden" governments. Most perform their jobs without much fanfare, public scrutiny, or legislative oversight. About 2,000 special districts are independently governed; the remainder are a subsidiary district of a city, county or a joint powers agency. They provide services ranging from wastewater control to fire protection.

Special districts also are among the state's big spenders - more than $18 billion in fiscal 1996-97.

A good case can be made that one special district - the Water Replenishment District (WRD) of Southern California - operates in stark contrast to other districts. The formerly low-profile WRD is the subject of a Bureau of State Audits investigation scheduled to be concluded this month. The WRD's five elected board members are the targets of taxpayer lawsuits.

Consider the following:

• The "hijacking" of a state Assembly bill (AB 1532) by the WRD - avoiding committee hearings and public scrutiny - fails in the final hours of the 1999 legislative session only after a state senator assigns a staff member to review every bill that passes over the Senate desk. The unusual vigilance prevented the district from repealing a state law that prohibits the district from duplicating the services of other water agencies.
• Sacramento Bee columnist Dan Walters writes that a WRD board member took the unusual step of soliciting Sacramento lobbyists for campaign donations. Later, the WRD board authorized contracts for upwards of $50,000 a month plus expenses from these lobbyists to fight two bills that would prevent the district from creating new debt without taxpayer approval. Wrote Mr. Walters: "It's a classic retelling of an old story in California politics about isolated agencies becoming arrogant and insular and about local squabbles finding their way into the Legislature for resolution - or exploitation - by politicians and lobbyists."
• Despite a $50.5 million fund balance, the WRD proposes debt financing for two construction projects. Both could easily be funded by the existing surplus in district revenues, which continue to grow. The contract for one construction project was handed out without even requesting proposals.
• The Long Beach Press-Telegram states in an editorial: "Water District Waste: Stop them before they spend again." The editorial decries the WRD's lobbying and its ballooning staff and consultants. The WRD currently employs 29 staff members, an increase of nearly 50 percent this year alone. The staff now includes three full-time public affairs employees to supplement the services of five public relations firms.
• The California Little Hoover Commission hears testimony about the WRD doubling its assessments since 1991. Replenishment assessments remain disproportionately higher than actual costs. A review of WRD charges by the Long Beach Board of Water Commissioners finds that $20 of the District's $139-per-acre-foot assessment for water is in the form of new administrative charges. Water system managers in other cities believe the district can conduct all of its programs with revenues of just $105 per-acre-foot of water. The independent government watchdog agency, formally known as the Milton Marks Commission on California State Government Organization and Economy, plans to issue a report on special districts, including a case study of districts that include WRD.
• A costly "edutainment" outreach breakfast is held by the district at Hollywood Park. In prior litigation filed against the district and as part of current litigation (now in the discovery stage), the litigants charge that the WRD paid more than $216,000 in public funds for newsletters, promotional materials, and social events promoting incumbent board members just before the 1998 election.

Mark Titel

Robert Wagner

Marc Titel and Robert Wagner are members of the Lakewood City Council. Mr. Titel is a business management consultant and educator; Mr. Wagner is an aerospace engineer. Both have been active in municipal water public policy issues.

What is the WRD and why has its staff grown 300 percent in 10 years, from a three-person staff that jointly served three water agencies - the WRD and the Central Basin and West Basin municipal water districts - to a staff of 29 serving a single agency?

The WRD is located in the southern portion of Los Angeles County. The district boundaries extend from Redondo Beach to Long Beach on the coast and as far inland as Boyle Heights in the city of Los Angeles. Nearly four million L.A. County residents live within these boundaries.

The WRD is responsible for purchasing imported water to replenish the groundwater pumped by city and private water companies. The WRD also protects groundwater from contaminants. The district is authorized by state law to buy, sell, exchange, spread, inject, treat, and transport water for purpose of replenishment.

The WRD was created in 1959 as a limited purpose public corporation. Court rulings, a few years after its formation, altered the WRD's operation, requiring groundwater replenishment through the adjudicated water rights of the water "pumpers" (mainly water districts, cities, and investor-owned utilities). Until recently, the WRD merely acted as an administrative agency, collecting replenishment assessments. The WRD did not own or operate any replenishment facilities. The actual task of replenishing the groundwater is not even undertaken by the WRD, but by the Los Angeles County Department of Public Works, which owns, operates, and maintains the water replenishment facilities.

Some member water agencies within the WRD argue that it would be more efficient to transfer the WRD's responsibilities to the two subregional agencies - the Central Basin and West Basin municipal water districts.

We believe that many special districts are well managed and governed. Yet, the opportunity for a politically motivated group to grab control of the public purse must be tempting. After all, special districts are where "the money is."

Each county has a Local Agency Formation Commission (LAFCO) that examines reorganizations of all governmental entities within its jurisdiction. Reorganizations can be initiated by the LAFCO itself, if it would result in cost savings, efficiency improvements, or greater public access and accountability.

Unfortunately, this responsibility is often hampered by "don't rock the boat" political realities, the absence of adequate funding and the political will to undertake reorganization.

Absence of public scrutiny, lack of proactive LAFCO action, and limited legislative oversight will encourage more agencies to follow the WRD's course - runaway spending unrelated to its core responsibilities - and the public will continue to pay the price.