Tue, Jun

DWP’s $40 Million Fiasco


LA WATCHDOG-The trust and confidence of the Ratepayers and voters in the Department of Water and Power and the City Council has dipped to new lows.  

On Thursday, Jack Dolan of the Los Angeles Times revealed that IBEW Union Bo$$ d’Arcy has denied Controller Ron Galperin and City Administrative Officer Miguel Santana “unfettered access” to the books and records of the Joint Safety and Training Institutes in connection their audit about what happened to $40 million of Ratepayer money that was funneled to these two less than transparent nonprofit trusts. 

Naturally, Ratepayers are asking, “What is IBEW Union Bo$$ d’Arcy trying to hide?” 

But this is just more of the same old mumbo jumbo that we have come to expect from Union Bo$$ d’Arcy, the DWP, and the City Council. 

Despite the lapse of 17 months since Jack Dolan’s front page article that exposed DWP’s failure to account for the $40 million of Ratepayer money, we still have no hard facts.    

There is also plenty of speculation, leading many to think that Bo$$ d’Arcy’s refusal to cooperate is good news. 

This will allow Ratepayers to ask even more questions about the terms of the settlement agreement and why it does not extend back to 2000 when the Joint Safety Institute received its initial funding of $1.2 million.  And why the unusual terms which prohibit the Controller and CAO from making and preserving copies of appropriate documents? 

Since the settlement agreement in November, questions have been raised as to whether there were any undisclosed side deals in connection with the recent labor agreement between DWP and the IBEW, including those involving the construction of 600 megawatts of solar power within the City of Los Angeles.      

This episode also shines the an unflattering light on the City Council and Herb Wesson who many believe forced Galperin, City Attorney Feuer, and Mayor Garcetti to agree to unfavorable terms in the settlement agreement as a result of pressure from Union Bo$$ d’Arcy.  This speculation is reinforced by the fact that at least ten members of the City Council have received campaign donations from Union Bo$$ d’Arcy’s IBEW Local 18, including incumbents Jose Huizar and Nury Martinez. 

This flare up also comes at an awkward time for DWP as it is contemplating the announcement of a five year (!) increase in our water and power rates that may be in the range of 5% to 8% a year, substantially higher than the rate of inflation. Overall, this 28% to 45% increase would cost Ratepayers between $1 to $2 billion, assuming no out of the ordinary increases in the pass through costs for water or natural gas.  

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There is a huge credibility gap between the Ratepayers, the City, and the DWP.  So rather than entering into another unfavorable deal with the IBEW, the DWP and the City should trash the existing settlement agreement and pursue the matter in the courts where recent decisions have favored the City. 

The City should also ask the State Legislature to audit these two nonprofit trusts.  This would be similar to the current audit where the State is reviewing and analyzing the bungled installation and cost overruns associated with the Customer Information System. Of course, this audit of the CIS was at the instigation of Union Bo$$ d’Arcy and his pals in the Legislature, including the recently ousted Raul Bocanegra, in an attempt to deflect attention away from the possible misuse of $40 million of Ratepayer money.    

The City should also consider requesting assistance from the Federal government, including the Internal Revenue Service, the FBI, and the U.S. Attorney.  

The City must realize that this whole mess involves more than the $4 million that is due under the union contract and the $40 million that has been funneled to the trusts since 2000. 

Rather, the DWP and the City are at risk of losing any trust and confidence that remains with the Ratepayers and the voters.  Just imagine the reaction when DWP announces a five year, multibillion dollar rate increase or the City proposes a $5 billion tax increase to fund the repair and maintenance of our streets and sidewalks. 

It will not be pretty. 


(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]This email address is being protected from spambots. You need JavaScript enabled to view it.) 




Vol 13 Issue 14

Pub: Feb 17, 2015





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