LA WATCHDOG-The $13 million Griffith Park South Water Recycling Project is just another Tom LaBonge pet project that is being dumped on the Department of Water and Power by the City and its Department of Recreation and Parks. Furthermore, its less than transparent economics do not pass the financial smell test, creating yet another burden for the already beleaguered Ratepayers.
This conservation oriented project is designed to provide 370 acre feet (over 120 million gallons weighing almost 1 billion pounds) of recycled water from the Los Angeles/Glendale Water Reclamation Plant to the Roosevelt Golf Course and the surrounding area through 7,400 feet of newly installed “purple pipe.” The cost will also include a new one million gallon steel water storage tank and a pumping station with peak capacity of 1,400 gallons per minute.
But the $13 million cost of this endeavor does not make economic sense. The cost equates to over $35,000 an acre foot, about four times the going rate for water rights for potable water. It is also 44 times the current rate for water purchased from the Southern California Metropolitan Water District (“MWD”), resulting in a rate of return after operating expenses that will not even cover the interest cost on this debt financed project.
No wonder the Department of Water and Power and the Department of Recreation and Parks have not provided us with any economic analysis. As a matter of fact, DWP’s 118 page Mitigation Negative Declaration discussed bats, butterflies, snakes, trees, shrubs, and other environmental issues, but there was no mention of the finances of this ecofriendly boondoggle.
At the same time that the Water System is being forced to embark on this questionable, debt financed project, its overall level of debt is skyrocketing, endangering its AA- (Double A minus) bond rating.
In January, the Department of Water and Power is expected to announce a four year increase in our water rates of at least 25%. This is after our rates have increased by about 40% to 50% because of the Department has been forced to purchase very expensive water from MWD because of the overly restrictive environmental regulations in the Owens Valley.
This increase in our water rates will also be accompanied by a similar increase in our power rates, resulting in an overall hit to Ratepayers’ wallets of at least $1 billion over the next four years.
Before starting construction on this project, the City and DWP need to have an open and transparent discussion on why DWP is being saddled with this uneconomic project that is the responsibility of Recreation and Parks, the lousy economics of this deal, the subsidized rates that Recreation and Parks is being charged by DWP, why the entire project is not being put out to bid, and what is the protocol for “pet projects” that are not essential to the efficient operation of our Department of Water and Power.
Of course, this needs to be part of a much larger conversation which involves the proposed $1 billion increase in our water and power rates and why 25% of DWP’s revenue amounting to over $1 billion is making its way to City Hall and its cronies, including the less than transparent and possibly illegal $253 million Power Transfer Fee/Tax.
Now is the time for the Mayor and City Council to stop the abuse of the Ratepayers and their wallets. Otherwise, do not expect the Ratepayers to be receptive to the $4.5 billion Street Repair Tax that is making its way to the November 2014 ballot.
(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.)
Vol 11 Issue 99
Pub: Dec 10, 2013