Laguna Beach County Water Board of Directors: General Manager:*

lax and in some instances non-existent, thereby creating a perception of bias in the selection of candidates, especially in the selection of Board members from other member agencies to provide professional services. District Response: The District disagrees with these findings. The District has policies and procedures in place that govern the award of contracts. California Water Code does not currently require competitive bidding for construction or consultant contracts by County water districts. Accordingly, the Board may seek a sole source bid for a designed project. However, our Board in cases other than emergencies seeks multiple bids on construction projects. The District selects consultants to provide professional services based on which service provider best meets the needs of the project and the District. Some Board members are conducting their professional practices with member agencies and use

their elected positions to promote their competitiveness. District Response: The District agrees with these findings. However, the District has not observed any of its Board members using their elected position to conduct their professional businesses. THIRD STREET, P.O. BOX 987, LAGUNA BEACH, CA 92652 • TEL: 949.494.1041 • FAX: 949.497.1021 • WEB: www.lagunabeachwater.com . ÷. 1

Codes of ethics among districts are quite varied. Some are very comprehensive and some do not exist other than to reference state laws. District Response: The District disagrees with these findings. The District requires that decisions and policies be made through the correct channels of the governmental structure, that public office roles not be used for personal gain, and that all individuals associated with the District remain impartial and responsible to the general public. It is the policy of the District that Board members maintain the highest standard of honesty and fairness in carrying out their duties. It is the intent of the District, through policy, to heighten awareness of ethics and values in the conduct and actions of members of the Board, to provide guidance in dealing with ethical issues, and to improve the ethical decision-making of the District. Water board meetings are frequently scheduled for times that discourage public attendance.

District Response: The District partially agrees with these findings. Many water board meetings are held in the late afternoon or early evenings. Our District typically holds our Board meetings at 5 p.m. All public hearings are held after 5 p.m. to ensure public participation.

An unusually high percentage of water board directors were originally appointed not elected to their position. District Response: The District partially agrees with these findings. Water board directors are elected positions. Only in a case where a director either resigns or passes away is a new director appointed to fill that position. At the time of the next general election, these appointed Board positions must be put on the ballot and voted on by constituents to retain that board seat. Because election costs are so high, it is not always in the best interest of the ratepayers to hold a special election if an upcoming general election is forthcoming. Some board members hold multiple elected positions that under certain circumstances could create

an appearance of a conflict of interest unless the person recuses himself on an issue-by-issue basis. District Response: The District agrees with these findings.

There are no time limits for how long individuals can serve on any water district board in Orange County. District Response: The District agrees with these findings. However, the lack of term limits allows an individual to gain valuable experience on water issues and the agency, which is advantageous to members of the public. Response to recommendations: In addition to the laws set forth in the Political Reform Act of 1974 and Government Code section