(LATimes) - A sprawling Central Valley water district run by some of the state's wealthiest growers papered over its drought-related financial struggles and misled investors, federal regulators said Wednesday.

The Westlands Water District shifted about $8.3 million in expenses and other obligations to the revenue side of its ledgers, solely to be able to represent that it had enough revenue to cover debt payments on $77 million in bonds without having to raise rates, according to the Securities and Exchange Commission.

The district's general manager, Thomas W. Birmingham, jokingly called the moves “a little Enron accounting,” a reference to the defunct Houston energy and commodities conglomerate whose fraudulent accounting led to its spectacular collapse in 2001, according to the SEC. Birmingham agreed to pay a $50,000 penalty, and the district paid $125,000 to settle the case. The former treasurer, L. David Ciapponi, paid a $20,000 penalty, according to the agency.

“The undisclosed accounting transactions, which a manager referred to as ‘a little Enron accounting,' benefited customers but left investors in the dark about Westlands Water District's true financial condition,” said Andrew J. Ceresney, director of the SEC enforcement division. “Issuers must be truthful with investors, and we will seek to deter such misconduct through sanctions, including penalties against municipal issuers in appropriate circumstances.”

Neither Westlands nor its administrators acknowledged guilt, and the district did not miss any bond payments, according to a statement issued by the district. The accounting procedures at issue were approved by an independent auditor, according to the district.

“Westlands, Birmingham and Ciapponi determined that entering into the settlement to fully resolve the matter was in the district's best interest,” the statement said.

At issue was a “debt service coverage ratio,” a measure of the district's ability to meet its debt obligation. Because of the district's “extraordinary accounting procedures,” that figure was 10 times higher than it would have been using conventional accounting procedures, the SEC said.