Gastelum Announces Retirement as Metropolitan President, CEO; Water Leader Noted for Shepherding Diverse Portfolio for Southern California.

LOS ANGELES -- Ronald R. Gastelum, president and chief executive officer of the Metropolitan Water District of Southern California, announced his retirement today.

Overseeing one of the nation's largest wholesale water agencies since April 1999, Gastelum joined other leaders to bring peace to California's water battles over the Colorado River's bounty and shepherded development of a diverse water management portfolio enabling the region to withstand record drought without shortages.

"I believe it is a good time, and I will leave with no regrets about the priorities we chose and challenges we met," wrote Gastelum in a one-page memorandum to Metropolitan's board of directors stating his plans to retire Dec. 31.

Saying his 5 1/2 years at the district helm "is enough time for any public manager to affect positive change and meet specific challenges," Gastelum left open the option to stay on longer to give the Metropolitan more time to "accomplish a smooth transition."

MWD board Chairman Phillip J. Pace recognized that Gastelum "presided over the management of water supplies in Southern California at a time when drought was joined by more factors of uncertainty than Metropolitan's leaders had ever faced."

"During his tenure, we experienced the driest year in recorded history in 2002; the halving of our Colorado River supplies in 2003; a major levee break in Northern California in 2004; and continuing drought conditions similar to those experienced in the early 1990s without the call for rationing," Pace recalled.

"Yet, through it all, we settled long-standing water supply issues on the Colorado River with agencies in California and other basin states that have strengthened our abilities to deal with the current Colorado River drought," he said.

Pace also noted the coincidence of Gastelum's retirement plans being announced the day after President George W. Bush signed federal legislation authorizing the long-term CALFED Bay-Delta Program, the state-federal effort aimed at addressing the water quality, supply reliability and environmental issues affecting the San Francisco Bay/Sacramento-San Joaquin Delta. Stewardship of the Bay/Delta, a major drinking water source for 18 million Southern Californians, was a major Metropolitan objective under Gastelum.

"Our storage and water transfer partnerships have been greatly expanded, along with the successful completion of Diamond Valley Lake since Ron became CEO in 1999. These actions, combined with our investments in conservation and recycling, have forged the successful formula that keeps Southern California a step ahead of dry conditions," Pace said.

At the same time Gastelum announced his retirement to the Metropolitan board's executive committee, Brian G. Thomas, MWD's chief financial officer, reported Standard & Poor's bond rating agency raised Metropolitan's rating to AA+, acknowledging the agency's "prudent capital planning" to meet future regional water needs. Thomas also noted that, for the 10th straight year, Metropolitan received the Government Finance Officers Association's Certificate of Achievement for Excellence in Financial Reporting for the district's 2002-03 annual financial report.

In addition, Debra C. Man, MWD's chief operating officer, reported the positive quarterly results of the implementation of the district's 2004-05 business plan, including news of Metropolitan receiving the National Purchasing Institute's Achievement of Excellence in Procurement.

Frances Spivy-Weber, executive director of the Mono Lake Committee, acknowledged Gastelum's leadership in bringing "water conservation into the mainstream of water supply management."

"Under his direction, conservation is not only for droughts but is a long-term tool for water reliability," Spivy-Weber said. "His efforts and focus sparked a movement to restore Southern California's landscape heritage by encouraging the use of drought-tolerant native and California-friendly plants. I thought I'd never see the day that major plant retailers such as Armstrong Garden Centers would offer these once hard-to-find-plants."

Gastelum, 58, rejoined the district as the agency's 11th general manager since its incorporation by the state Legislature in 1928, after having served as a member of Metropolitan's board for 10 months in 1998. He was the first former board member and first Latino to be named chief executive officer in the agency's history.

Gastelum said that he purposely waited until after the election of a new board chairman to make his announcement. "With the election behind you, your full attention can now turn to considering the challenges ahead and the qualifications you will be looking for in a new CEO," he wrote.

Wes Bannister, who was elected to follow Pace as MWD board chairman Jan. 1, 2005, recognized Gastelum's "gracious delay of an earlier intent to retire to see the board through its own leadership transition was well appreciated. I look forward to his stewardship as we begin the effort to find his successor."

In his letter to the board today, Gastelum thanked Chairman Pace, Metropolitan board officers, committee chairs, vice chairs, current board members and all the past directors that have served and supported him since 1999. "I would also like to thank you all for the many memorable moments of shared accomplishments, and perhaps most of all, for the trust you placed in me and MWD's dedicated workforce to do our job well," he wrote.

A cooperative of 26 member public agencies, Metropolitan provides up to 60 percent of the water used by 18 million people in six Southland counties. The district's 5,200-square-mile service area covers most of urbanized Southern California. Metropolitan imports water from the Colorado River and Northern California to supplement local supplies.

Headquartered adjacent to Union Station in downtown Los Angeles, Metropolitan has an annual operating/capital budget of more than $1 billion, about 1,800 employees and more than 30 facilities throughout Southern California.

During Gastelum's tenure, Metropolitan offered a fundamental change in the way that the region's primary wholesale water supplier charged for water, bringing significant long-term benefits to the region with improved supply reliability and continued investments in conservation, recycling and other progressive water management programs. After more than three years of debate and public input, Metropolitan's board adopted a new forward-looking rate structure in October 2001, giving incentives for sound water management and the financial framework to support MWD investments in future water supplies.

In addition to the dedication and opening of Diamond Valley Lake, the Southland's largest drinking water reservoir near Hemet in southwest Riverside County, Gastelum oversaw the construction of the Inland Feeder, a 44-mile pipeline/tunnel project, and the introduction of ozone as a water treatment upgrade.

Under Gastelum's guidance, Metropolitan helped facilitate a competitive transfer market in California, including a first-of-its-kind long-term program that would pay farmers in the Palo Verde Valley near Blythe to annually set aside a portion of their land, rotate their crops, and transfer saved water to urban Southern California.

The Metropolitan Water District of Southern California is a cooperative of 26 cities and water agencies serving 18 million people in six counties. The district imports water from the Colorado River and Northern California to supplement local supplies, and helps its members to develop increased water conservation, recycling, storage and other resource-management programs.

Note: Digital photo available upon request