A city could play accounting games by moving regular staff to one of the city's proprietary agencies. The proprietary agencies charge consumers at a rate consistent with the cost of delivering the product to the ratepayer. The agency is under no obligation to constrain costs or maximize efficiency.

There is no built in mechanism to watch out for abuse of water districts/department and their ratepayers. Ratepayers' only real option is to file Prop 218 protests at the next water rate increase.

According to an OurLA investigation, the City of Los Angeles is balancing part of its general fund budget by shifting 70 workers to the water department. In doing so, some staff automatically jump to a different pay scale and get a 40% raise.

During the last Encinitas budget adoption the City of Encinitas quietly transferred 3 city employees to the San Dieguito Water District.