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Central Basin Water District sues vendor as it reviews all finances

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Damian Dovarganes/AP

The Central Basin Municipal Water District, which serves 24 cities in Southeast L.A. County, is reviewing all of its vendor contracts, spending and investments in the wake of a federal investigation and $482,000 deficit.

Officials with the Central Basin Municipal Water District are reviewing records from all their vendors in the wake of alleged overbilling from one long-time contractor, the agency’s general manager said Friday.

The financial review is occurring at the same time the general manager and finance director are combing through discretionary spending and revamping the water district’s investment portfolio.

Late last month, the water district's board approved a 2013-14 budget that projects $11 million in expenses and an estimated deficit of $482,000.

The Central Basin Municipal Water District is a water wholesaler that serves two million people in 24 cities in southeast Los Angeles County. It was subpoenaed by the U.S. Attorney’s Office last month as part of an ongoing investigation into State Senator Ron Calderon. His brother, Tom Calderon, was a consultant for the district for 10 years, during which time he received almost $1 million in contracts. Federal officials have also sought to question Tom Calderon.  

“We are under a lot of public scrutiny right now because of this well-documented and well-publicized federal investigation of the Calderon family," said district general manager Tony Perez, who was just appointed in May. "But, in so far as we are associated with that investigation, we are absolutely complying to the fullest with the federal authorities.” 

The water district this week filed a lawsuit against one of its longtime contractors, Pacifica Services, when it discovered $867,000 in invoices beyond its $3.6 million contract with the engineering firm. The district paid $538,000 toward that amount before the overbilling was discovered.

“The district, board and management, are absolutely committed to being transparent and to providing service in a business-like fashion," said Perez, "and to the extent that our business processes were deficient, we are going to work very, very hard to correct them."

A representative for Pacifica Services did not respond to a request for comment.

The firm, which is based in Pasadena, and its president Ernest M. Camacho have given $29,000 in campaign donations to water district board candidates since 2007, which is the same year it received its first contract. Nearly half of those donations, $13,000, went to last year's re-election bids by Ed Vasquez and Rudy Montalvo, board members who were both defeated. 

 

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