City of Vernon v. Central Basin Municipal Water District

Introduction

Plaintiff, the City of Vernon (plaintiff), sought injunctive and other relief against defendants James William Zastrow (Zastrow), Central Basin Municipal Water District (District), and Peerless Water Company (Peerless). District is a municipal water district organized under the Municipal Water District Law of 1911 (Wat. Code, § 71.000 et seq.). Zastrow is an elected member of District’s board of directors. Zastrow is also an owner, stockholder, and salaried president of Peerless, a private water company. District sells reclaimed water to 23 purveyors of reclaimed water, who resell it to users such as parks, nurseries, and golf courses. Peerless is one of those 23 purveyors of reclaimed water.

Plaintiff contended this arrangement violates two different statutory schemes prohibiting financial conflicts of interest by governmental officials. Plaintiff contended that Zastrow’s participation in decisions to set the rates to be charged to the purveyors for reclaimed water, and to set a standby assessment on all land within the district to help finance District’s water conservation program, would violate the prohibition in the Political Reform Act of 1974,…