Troubled Central Basin Water District may lose insurance

A controversy-riddled water district involved in a federal corruption investigation is in danger of losing its insurance, a political black eye that could have implications for the agency and its 2 million customers.

The Assn. of California Water Agencies Joint Powers Insurance Authority has recommended to its board that it drop the employment liability insurance for Central Basin Municipal Water District, citing the circus-like atmosphere at the agency.

The authority insures hundreds of water districts across the state, and this would be only the second time in its 35-year history that it canceled coverage for a water district.

"It appears to an outsider that there is a sense of dysfunction on the district's board," the insurance authority wrote in a letter to Central Basin. "This dysfunction is resulting in an inordinate increase in litigation against the district."

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