Questions over funds will be cleared up, water agency chief says A southeast L.A. County water district has come under fire for its handling of nearly $3 million in state and federal stimulus grants after it proposed that a portion of the money go to a company linked to a powerful political family. The Central Basin Municipal Water District received the federal funding in 2010, partnering with an Orange County water management firm for a water distribution and efficiency study. But in recent months, the district moved to drop the firm in favor of a different plan in which $965,855 would go to Water 2 Save. Former state Assemblyman Tom Calderon is a director of Water 2 Save. Calderon has long worked as a consultant to Central Basin under a contract that pays up to $140,000 a year. Two of his brothers, who are both state legislators, have been strong supporters of the district's interests in Sacramento. An anonymous letter opposing the Water 2 Save contract was sent to the district last week. At a public meeting Monday, General Manager Art Aguilar defended the proposal, saying he would have the district's general counsel review the selection process to ensure "a second layer of oversight." What was in that letter was false and inflammatory, and we're not going to stand for that.... We do it the right way here," Aguilar said, adding that Calderon "has never attempted in any way to influence the district's procurement process." In the fall of 2009, Central Basin began pursuing a stimulus grant from the U.S. Department of Energy in conjunction with HydroEarth, a water management firm based in Lake Forest. The research proposal involved new technologies that would manage pumping pressures to save energy and coordinate water distribution during emergencies. Central Basin received approval for the funds in June 2010. But soon after, the district staff indicated that it wanted to use the money for different purposes, according to Tom Carr, president of HydroEarth. The Central Basin employee who initially oversaw the proposal, Sally Flowers, was removed from her position, he said. "The whole thing just went quiet ... it was really bizarre," said Marcus Castain, head of a nonprofit that was set to provide labor for the original project. Then in the spring of 2011, Carr said, a new manager working for Central Basin told him the water district "wanted to give [the project] to Water 2 Save." In a brief interview, the manager denied making that statement but refused to answer further questions. Over the summer, Central Basin went back to the Department of Energy and requested the grant be amended so the work could be opened for competitive bidding. The department approved the change. Officials at the water district said the amendment was requested in order to better align the project with community needs and ensure a competitive bidding process. They said such a process was necessary because, after winning the grant, they realized there were other companies with similar technology to HydroEarth's. "All the changes ... were done with the complete understanding and approval of the Department of Energy," Aguilar said. Bill Gibbons, a spokesman for the Department of Energy, said such modifications are not unusual. But the revisions led to major delays. Bids were solicited for equipment and software services in December - more than a year after the funding was first approved. Three firms submitted bids: HydroEarth, Calderon's Water 2 Save and a third company, HydroPoint. This month, Central Basin staff selected Water 2 Save as the winner, saying it had the most complete proposal. The district's elected board members have yet to approve the contract. Representatives from the other companies are now questioning whether Calderon's position at Water 2 Save was a factor in the recommendation. Calderon, who is running for a seat in the state Assembly, did not return calls seeking comment. Calls to Water 2 Save's headquarters also were not returned.