LA WATCHDOG--Our Department of Water and Power may not agree with the old adage that that all publicity is good publicity, especially when it is fails to recognize the impact of the self-serving antics of the occupiers of City Hall.
Last week, the media had an absolute field day pointing out that our reward for reducing our water consumption by 10% required a 4%, $57 million increase in our water rates.
Later in the week, Times reporter Jack Dolan told us that a three judge appeals panel ruled that the City had the right to inspect the records of the Joint Safety and Training Institutes, the two nonprofits that have absconded with more than $40 million of Ratepayer money over the last 15 years. Of course, this raises the question as to whether Controller Ron Galperin and Mayor Eric Garcetti will conduct a full fledge fraud audit of these two fiefdoms that have been dominated for the last 15 years by City Council President Herb Wesson’s good friend, campaign funding IBEW Union Bo$$ Brian d’Arcy.
Over the weekend, Daily News reporter Dakota Smith discussed yet another City Hall pet project where DWP was forced to invest $20 million of Ratepayer money in the 60,000 square foot La Kretz Innovation Center, even though it was unrelated to the utility’s core mission of keeping the lights on and the water running. The Department is also subsidizing the Los Angeles Cleantech Incubator’s operations by allowing it to use 38,000 square feet of prime real estate rent free for the next 20 years, a savings of at least $24 million.
In the Department’s defense, the 4%, $57 million increase in our water rates to cover the $110 million shortfall in projected revenue is a sound business decision as the Water System needs to cover its operating and overhead expenses. The Department must also meet its debt service coverage ratios that are necessary to preserve its investment grade bond rating that is already under siege because of its existing high level of debt ($4.2 billion) and the impact of the borrowing requirements needed to finance its $5 billion capital expenditure program over the next five years.
However, the shenanigans associated with the Joint Safety and Training Institutes, the La Kretz Innovation Center, and the Cleantech Incubator are not legitimate business decisions that advance DWP’s mission of running an efficient and cost effective enterprise. These pet projects are joined by a long list of other non-core “investments,” including, but certainly not limited to, the Los Angeles River, numerous projects in Griffith Park and other parks throughout the City, the City’s stormwater plan, LED street lights, fire hydrants, and Discovery Cube (Children’s Museum) in Lake View Terrace.
In addition to the many pet projects, Ratepayers will be hit up for over $640 million through the City Utility Tax and the illegal 8% Transfer Tax that has not been approved by the voters. This haul is expected to increase by $175 to $200 million over the next five years as the Department is proposing a $1 billion bump in our power rates.
Overall, Ratepayers are being slammed for over $1 billion a year when you include the IBEW Labor Premium, its overly restrictive work rules, and the cost of the surplus employees (and their unfunded pension liability) that were dumped on the Department by the Villaraigosa administration and the Garcetti led City Council.
As part of the review and analysis of the 5 year, $1.4 billion (32%) increase in our water and power rates, the DWP, the Ratepayer Advocate and its consultants, the Energy and Environment Committee chaired by Felipe Fuentes, and the Herb Wesson led City Council must detail the relationship between the Department and the City and its departments.
While Ratepayers have focused our wrath on the DWP, its management, and its employees, we need to realize that a major cause of our rates increasing significantly faster than the rate of inflation is caused by the Mayor and the City Council using DWP and the Ratepayers as an ATM.
This is not acceptable and must be addressed as an integral part of the $1.4 billion rate increase.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 87
Pub: Oct 27, 2015
