Battling Water Districts Feud Over PR Contract

By Wendy Fry
|  Friday, Jan 25, 2013  |  Updated 7:25 PM PDT
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Battling Water Districts Feud Over PR Contract

NBC 7 San Diego

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An L.A.-based water district, which has long been at war with San Diego’s regional water municipality, secretly hired local lobbyists, and hid the work through a small, member agency in Riverside County, according to the San Diego County Water Authority.

California Strategies, LLC, a local lobbying outfit, is being paid $15,000 a month to work on behalf of the Metropolitan Water District (MWD) on a San Diego-based public relations campaign, records show. Except, MWD isn’t paying the invoices, a smaller agency in Riverside County with no direct connection to San Diego is funding the work – a point of contention for San Diego water authorities.

The Metropolitan water district has been in a long and bitter dispute with the local San Diego County Water Authority over water rates. The local water authority is suing the Metropolitan, claiming their water rates overcharge San Diego County customers. Both 2010 and 2012 lawsuits are pending in San Francisco Superior Court.

California Strategies inked the contract with the Eastern Municipal Water District in August 2012, according to public records obtained and released by the San Diego County Water Authority on Wednesday.

The $100,000 contract – plus business expenses – is being invoiced to the Eastern district, a Riverside County agency that covers about 542 square miles and serves about 755,000 customers, according to its website.

The Riverside water officials were hoping to ease its access to local decision makers through San Diego P.R. professionals Craig Benedetto and Ben Haddad, according to the documents.

San Diego authorities maintain Metropolitan was simply funneling the work through its smaller member agency in Riverside to avoid public detection.

About the contract, the Eastern Municipal Water District released the following statement:

“In the event that SDCWA were to prevail in its legal efforts to change Metropolitan’s rate structure, EMWD customers would be required to unfairly pay $180 million to backfill the void left by the rate reduction provided to SDCWA. Given the implications to its ratepayers, EMWD felt it was appropriate to better understand the environment and dynamics in San Diego.

While we understand how the consulting agreement could be misconstrued, by referencing a scope of work that was contained in an unsigned draft document, the fact is that EMWD sought this professional advice completely independent of Metropolitan Water District of Southern California and its member agencies and no other parties contributed toward funding this contract or directing the consultant’s work.”

The Riverside water agency originally refused to provide the local Water Authority with a scope of work for the public affairs consulting being performed by California Strategies, correspondence between the agencies shows.

State law requires public access to documents relating to the public’s business.

When pressed, the Eastern Municipal Water District released a redacted description of the work being performed by California Strategies on Jan. 8. The document stated California Strategies was to “design and conduct an ascertainment program to communicate with 15-20 key stakeholders in the San Diego area on behalf of MWD and its member agencies.”

Those stakeholders included the San Diego Regional Chamber of Commerce, the Building Industry Association and the San Diego County Taxpayer’s associations – boards on which Benedetto and Haddad serve.

Benedetto and Haddad did not return multiple requests for comment in response to this article.

A spokesman for the California Strategies firm released the following statement:

“We are proud of the work we conducted on EMWD’s behalf. All work was directed and paid for entirely by EMWD,” the statement read.

Parts of the scope of work are still redacted and an attorney for the MWD maintains the information is privileged because it relates to litigation between the Water Authority and the Metropolitan Water District (MWD). There is no existing litigation between EMWD and the San Diego County Water authority.

A spokesman for MWD said San Diego’s local Water Authority is engaged in the exact same activity.

Not true, says Dennis Cushman, the assistant general manager for the local San Diego County Water Authority.

“We’re not out in the service areas of other member agencies opening up PR offices and using their ratepayer’s money – which is what MWD is doing in San Diego,” Cushman said. “Nor are we out in MWD member agencies’ service areas implementing secret outreach campaigns to their business and civic leaders, and then trying to cover up those activities by refusing to disclose public documents. And we are not hiding behind the skirts of another public agency as MWD is doing with Eastern …”

The San Diego County Water Authority does have public relations and outreach contracts, including a $6,000-a-month contract with a local firm, Southwest Strategies. When the contract was approved, it was not listed on a public agenda because the total contract amount fell within a range that can legally be approved by the general manager without board approval, the agency said. The local water district argues these contracts are different because the work of firms representing it is not a secret; it is not on behalf of a different public agency, nor is it for work conducted in another water agency’s service area, the agency told NBC Investigates.

The San Diego County Water Authority also has a $12,500-a-month contract with San Francisco-based SCN Strategies. That contract was also originally inked without a public airing, but it appeared on an agenda in December 2011 for an extension. The contract now extends through June 30, 2013.

Metropolitan Water District spokesman Bob Muir released the following statement about the disagreement.

“Yet again, the San Diego County Water Authority is making reckless and patently false allegation about Metropolitan. Metropolitan has no contract with Cal Strategies, LLC. We recommend you contact Eastern Municipal Water District or Cal Strategies directly,” the statement read.

Cushman told NBC 7 Investigates that all these legal and P.R. costs could be folded into your future water bills.

NBC 7 Investigates spoke with one local home owner who wasn’t pleased about that.

“Well, if they need to spend the money on PR maybe they should make a regulation that the funding comes out of their salary instead of out of our bill,” said local homeowner Paul Begovich.

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