17 Feb 2012
- Written by Jack Humphreville
LA WATCHDOG - The proposed Headworks Reservoir, like the floating cover reservoirs at Elysian Park and Upper Stone Canyon, is designed to allow our Department of Water and Power to meet the federal and state water quality and safety regulations that are applicable to open reservoirs.
This $230 million project is located on the Headworks Spreading Grounds, a 43 acre site located just off of Forest Lawn Drive between Griffith Park and the Ventura (134) Freeway. It consists of two brand new BURIED reservoirs with a combined capacity of 110 million gallons, covered with two or three feet of soil and native vegetation.
There is also a $25 million, four megawatt hydroelectric power plant that is expected to pay for itself over the next ten years.
But is this the best use of $230 million? Or are there more economical and efficient ways to achieve the same results?
Over the next five years, the Water System is projected to spend almost $4 billion in capital expenditures, financed in part, with $2.5 billion of debt. This will require our water rates to increase by 22% over the next three years and by over 40% over the next five years.
However, rates may need to be increased even more in the out years because of the need to “ramp up” the replacement of mainlines and of trunk lines from 95,000 feet to 135,000 feet per year and eventually 180,000 feet per year to as many of 1,000,000 feet in 2024 according to the January 27 report by PA Consulting.
In this environment of increasing rates in a down economy, a more cost effective alternative to the already delayed Headworks Reservoir Project is to use floating covers for the Ivanhoe and /or Silver Lake Reservoirs in a manner similar to the Elysian and Upper Stone Canyon Reservoirs. And in this case, the savings would amount to around $200 million, which, when factoring in the cost of capital, would lower our rates by about 2% to 3%.
Unfortunately, this alternative was not really evaluated because DWP staff members did not consider it a realistic option because of the potential for sustained community opposition, supported by the local and vocal Council Members, Tom LaBonge and Eric Garcetti.
Nor did the DWP even consider the considerable pollution generated by the Headworks Reservoir Project, an amount that would no doubt exceed the levels envisioned at the existing reservoirs in Upper Stone Canyon and Elysian Park.
So once again, we have our Elected Elite using our Department of Water as its candy store to fund pet projects that favor the well connected who want to preserve their million dollar views, all at our dime.
In addition to delays and possible price escalations of the Headworks Reservoir Project over the last two years, there appears to be controversy over how to manage this large construction project.
In the past, DWP has put projects of this magnitude out for bid. However, in this case, the Department is using a new project delivery methodology, Construction Manager at Risk, where the manager would be responsible for all phases of the project. So in return for a large fee, the Construction Manager is responsible for bringing the project in on time and on budget.
Like high priced alternatives at Elysian Park and Upper Stone Canyon that would have cost Ratepayers an extra $200 million, the Headworks Reservoir Project may have many attributes. However, like Elysian Park and Upper Stone Canyon, the high priced alternative is not the responsibility of DWP and the Ratepayers, especially in this environment of economic stagnation and high unemployment.
The DWP must give Ratepayers a better understanding of the Headworks Reservoir Project, the possible alternatives, and the impact on our rates. Furthermore, a review by Dr. Pickel, the Ratepayers Advocate, might be appropriate, possibly as part of his analysis of the proposed increase in our water rates.
As for our fiscally imprudent Elected Elite and their desire to use DWP as its candy store, it is reminiscent of a quote attributable to Everett Dirksen, the late senator from Illinois:
“A billion here, a billion there, and pretty soon you’re talking real money.”
But in this case, it is our money.
Tags: Jack Humphreville, LA Watchdog, Headworks Spreading Grounds, Forrest Lawn, Griffith Park, Upper Stone Canyon, Elysian Park, DWP, reservoirs
Vol 10 Issue 14
Pub: Feb 17, 2012