in downtown Los Angeles. The building opened in December, 1998.
MWD officials did not return calls for comment but have previously
denied any wrongdoing in connection with their management of public
City officials have accused the water agency of paying for the bulk of
its downtown building with reserve funds, a situation they said could
result in a rate hike in the not-so-distant future. The reserve funds are
intended to help the agency avoid rate hikes in lean years.
Burbank Councilman Bob Kramer said the audit will bring the agency's
finances to light, putting pressure on the MWD to act responsibly.
"I think it's the prudent thing to do," Kramer said Wednesday. "I
think this audit has the possibility of keeping the rates from going up."
The city hired the Florida-based Barrington-Wellsley Group to conduct
the audit, which will cost $27,500, according to a city report. Kramer
said it could take up to six months.
Barrington-Wellsley audited the MWD for Burbank in 1996. That audit resulted in a $700,000 refund to the city, Kramer said.
Former Councilman Ted McConkey, who supported the earlier audit when
he was on the council, said the move makes sense.
"Any agency that is institutionalized tends to forget the real reason
for its existence," McConkey said. "That is to serve the customers."
Kramer has publicly pressured the agency to explain how it financed
its headquarters. On Tuesday, he cited an April 23 MWD staff report to
support his claim that the MWD has spent approximately $90 million from
the Water Rate Stabilization Fund on the building.
On Nov. 22, Kramer and other city officials met with MWD General
Director Ron Gastelum. Gastelum defended the agency's spending policies
and denied that any rate stabilization money was used for the
Appearing at the dais Tuesday, MWD Assistant Chief Financial Officer
Antoinette Christovale echoed that statement. Referring to a letter sent
by the agency to the city on Dec. 2, Christovale said "we indicated we
used general fund monies to pay for the headquarters building. We did not
use Water Rate Stabilization Fund monies."
But Kramer denounced the agency's lack of candor about its finances
Wednesday, saying Christovale misled the council.
"Every time the MWD talks, they lie," Kramer said. "They just want us
to shut up and go away."
MWD provides drinking water for 27 cities and water districts in
Southern California. Approximately 50% of the city's water comes from the