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The “disputed” crossing where Central Basin’s recycled water line needs to be relocated.
By Brian Hews
Publisher | Follow X
January 23, 2026
A decision by the Los Angeles Department of Water and Power [LADWP] has pushed Central Basin Municipal Water District [CB] toward a multimillion-dollar financial exposure it did not create, stemming from the Los Angeles County Metropolitan Transportation Authority’s [Metro] Southeast Gateway light rail project and its impact on a recycled water pipeline owned by CB.
Reports obtained by Los Cerritos Community News show that Metro initially identified relocating CB’s recycled water pipeline into LADWP right-of-way as the least expensive option, but later “eliminated” that alignment after telling CB that LADWP “would not allow utilities on its property.”
An internal email obtained by LCCN, sent this week by CB Interim General Manager Elaine Jeng, outlined ongoing discussions with Metro over relocating CB’s recycled water pipeline.
The message makes clear that the conversation has shifted away from whether CB should pay at all and toward how the District would finance repayment over decades.
The CB Board last addressed the issue on November 5, 2025, when directors directed staff to pursue three parallel tracks: attempt to relocate the pipeline into LADWP’s right-of-way because it would be far less expensive, explore financing and outside funding sources, and refine a reimbursement agreement with Metro. At that meeting, staff highlighted the significant cost gap between alternatives, with a potential LADWP alignment estimated at roughly $2.5 million compared to other options approaching $10 million.
According to the November staff report, Metro initially developed an alignment that would relocate the recycled water line into LADWP right-of-way, identifying it as the least expensive option, before removing it from consideration after LADWP’s refusal.
More than two months later, the email confirms that the LADWP option has not, in fact, been resolved. CB staff met with LADWP representatives shortly before Thanksgiving, but those discussions notably involved the water side of the department rather than the power division that controls the property in question. A follow-up meeting scheduled for late December was cancelled by LADWP, and no written approval or denial has been issued. According to the email, LADWP is still “considering the request and will circle back.”
Despite that uncertainty, Metro is pressing CB to set a deadline to conclude discussions with LADWP so Metro’s design work is not delayed. CB staff has requested additional time until March 2026 to pursue the cheaper option, effectively placing a clock on negotiations that have not yet reached the correct decision-makers.
Cost estimates for the non-LADWP alignments have escalated sharply since the project was first presented to the CB Board. Earlier engineering estimates placed the “Blue, Green, and Red” alignments in the roughly $5 million to $7 million range, but those figures were later revised upward after Metro retained a contractor to refine construction costs. According to the November 5 staff report, the lowest remaining option is now estimated at approximately $9.6 million for construction alone, with design and construction management costs explicitly excluded. The report also identifies a newly discovered conflict requiring replacement of existing concrete encasement with steel casing at pipeline crossings within Metro right-of-way, a change Metro says is necessary to meet its utility standards and avoid disruption to rail operations—adding further, yet-to-be-quantified costs.
The email also details “progress on financing discussions” with Metro, including agreement on a twenty-year repayment period after CB informed Metro it could not repay the project within two to three years. Interest rates, payment frequency, and the possibility of balloon payments were discussed, and an updated reimbursement agreement is expected for CB review.
What the email does not include is a firm total project cost, a cost cap, or protections against overruns. Nor does it indicate that Metro would assume financial responsibility if estimates continue to rise. Instead, the focus has shifted to repayment mechanics, signaling an assumption that CB will ultimately pay.
Situations like this occur frequently in large public works projects, and the default outcome is often that the project sponsor pays. Across California, when a new rail line, highway, or major public facility forces existing utilities to relocate, the agency building the project typically covers relocation costs, even when utilities occupy another agency’s land under permits or accommodation agreements.
The underlying principle is simple: the entity creating the conflict bears the cost of resolving it. Utilities have frequently delayed payment or avoided it entirely by documenting cheaper alternatives, refusing to accept uncapped cost escalation, and asserting their duty to protect ratepayers from funding projects they did not initiate. Long-term repayment plans, in those cases, are viewed as a last resort—not a justification for shifting responsibility.
That shift carries consequences. A twenty-year repayment plan does not reduce cost; it distributes risk across future boards and ratepayers. The email also places directors on notice that CB lacks sufficient reserves and cannot afford the project as currently framed. If CB moves forward without fully trying the LADWP option or locking in strong financial safeguards, it will be a choice by leaders—not something they were forced to do.
At its core, the issue remains unresolved. Metro’s rail project created the conflict, yet Central Basin is being asked to shoulder long-term financial responsibility because some infrastructure sits on Metro property under an old accommodation agreement. The least expensive alternative has not been conclusively rejected, and Metro’s design timeline does not change Central Basin’s fiduciary duty to its ratepayers.
Until LADWP provides a definitive answer and Metro agrees to clear cost limits and risk sharing, the fundamental question remains unanswered: should Central Basin be paying at all?
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