LA WATCHDOG-2014 will be a very taxing year for all hard working Angelenos.
In July, our Sewer Service Charge is scheduled to increase 6.5%, or more than $35 million.
Our Department of Water and Power is expected to propose a four year, 25%, $1 billion increase in our water and power rates to finance the repair and modernization of its infrastructure, several very expensive unfunded environmental mandates, and increased pension contributions.
Incidentally, this four year increase will also provide the City with an estimated $150 million in additional revenue from the 8% Transfer Fee/Tax and the 10% City Utility Tax.
The City is also considering a 30 year, $4.5 billion Street Tax to finance the repair of our poorly maintained streets. This tax will increase our real estate taxes by up to $250 million a year, a 6% bump. This is in addition to the 27% extra we pay over and above our 1% assessment to finance voted indebtedness (primarily for schools) and direct assessments.
While the Sewer Service Charge is part of the 77%, 10 year, back end loaded increase in our rates that was approved by the City Council in 2011, the Bureau of Sanitation has never supplied us with historical and projected financial information despite numerous requests. Nor has Sanitation benchmarked the efficiency of its sewer operations, a reasonable expectation for an organization with $6.8 billion of capital assets, $2.5 billion of debt, and over $500 million in revenue from its 656,000 customers, of which almost 75% are single family residences.
DWP’s $1 billion rate increase will attract a great deal of scrutiny from the Ratepayers, the Ratepayers’ Advocate, the City Council, and the mainstream press. However, before approving the four year rate increase, Ratepayers must have a thorough understanding of the Department’s efficiency, work rules, staffing levels (especially in Customer Service and Shared Services), and its ability to contact out non core functions, all of which were recommended by PA Consulting in 2012.
The Department must also provide us with a detailed analysis of how and where the Joint Safety and Training Institutes spent over $40 million of Ratepayer money.
Given the lack of cooperation of Union Bo$$ d’Arcy in providing detailed information to DWP and the Controller about these two nonprofit organizations, we need a thorough understanding of his financial relationship with our elected officials. This would include a complete listing of all campaign contributions over the last ten years by the IBEW and its affiliates, including Working Californians which was the “independent” expenditure committee responsible for funneling millions of campaign contributions to Wendy Greuel and other elected officials.
We also need to know the workings of the Joint Labor Management Relations Board that will be reviewing DWP’s work rules and their impact on the Department’s efficiency. We also have the right to know how DWP’s healthcare plan compares to those of the City’s civilian and sworn (police and fire) workers.
We are also entitled to the details involving the $1 billion of Ratepayer money that is hijacked every year by City Hall and its cronies, including the legality of the $250 million 8% Transfer Fee/Tax, the $250 million IBEW Labor Premium, and all of City Hall’s pet projects, including those in Silver Lake and Griffith Park and the efforts by Tom LaBonge to stick DWP with a multimillion dollar ticket for the City’s water fountains.
Before considering the $4.5 billion Street Tax, the City Council must determine if the Save Our Streets program addresses all of our streets and alleys over the next ten years, if there is truly independent and comprehensive oversight, and if a tax increase is necessary given that the increase in City’s revenues over the next five years will exceed the required debt service on the street bonds by an estimated $400 million a year.
The review of all these revenue “enhancements” will be clouded by the anxiety over the City’s budget, which, despite record revenues, will show a deficit of $250 million because of the increases in salaries, benefits, and pension contributions. These concerns will be magnified because of upcoming labor negotiations with the City’s workers involving compensation, contributions to their Cadillac healthcare plans, pension reform, work rules, benchmarking of the City’s compensation policies and the efficiency of its operations, and the City’s ability to enter into public private partnerships or other outsourcing arrangements.
There are also numerous departmental requests for greater funding, ranging from the Police and Fire Departments and Recreation and Parks to affordable housing (O’Farrell and Fuentes) to the relaxation of the Managed Hiring guidelines (Blumenfield and Bonin).
The only leverage we have over our unaccountable Elected Elite, their cronies, lobbyists, real estate developers, and the campaign funding union leadership is the power to reject any proposed tax increase. For example, in March, 55% of the voters rejected Proposition A, the Herb Wesson led City Council’s well financed attempt to permanently increase our sales tax to a job killing 9½%.
If the City Council decides to place the $4.5 billion Street Tax on the ballot, we must demand an open and transparent process, with complete disclosure of all aspects of the budget and rate increases. The City Council and Mayor Garcetti must also agree to place on the ballot a charter amendment that requires the City to LIVE WITHIN ITS MEANS.
Otherwise, it is SOS, the same old silliness, which will keep the City on the current trajectory where it saddles the next generations of Angelenos with tens of billions of unfunded pension liabilities, failed streets, and long term debt.
This is not an acceptable alternative.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
-cw
