Politics: City Hall Puts DWP’s $1 Billion Rate Hike on Hold … 9½% Sales Tax More Important!

LA WATCHDOG-The proposed four year, 25%, $1 billion increase in our water and power rates has been put on the back burner – at least until after the November election - as a result of the controversies swirling around our Department of Water and Power that make the optics of any rate increase very difficult for the Board of Commissioners, the City Council, and the Mayor.  

The politics of this rate increase are further complicated by the concerted efforts of City Hall to persuade two-thirds of the voters in the November election to approve a half cent bump in our sales tax to 9½%, one of the highest rates in the country.  This new $4.5 billion tax will be used to fund the repair of our potholed streets and broken sidewalks, freeing up General Fund cash to pay for increases in salaries, benefits, and pension contributions.  

The political environment surrounding this massive rate increase has been tainted by the front page scandal involving the Joint Safety and Training Institutes and the unwillingness to tell us how they spent more than $40 million of Ratepayer money over the past ten years.  

Particularly galling is IBEW Union Bo$$ Brian d’Arcy’s public refusal to provide City Controller Ron Galperin with detailed financial information on these less than transparent and unaccountable entities, raising the obvious question of what is Bo$$ d’Arcy trying to hide. 

After a legal dust up where Union Bo$$ d’Arcy went to court to squash Controller Galperin’s subpoena, Superior Court Judge Chalfant ruled last week that Bo$$ d’Arcy must provide Controller Galperin with the requested information.  

But will Bo$$ d’Arcy comply with this court order or will he continue to stonewall the Controller, City Attorney Mike Feuer, Mayor Eric Garcetti, the DWP Board of Commissioners, and the Ratepayers?  

Who knows, maybe his dog ate the financial records.   

This cover up also highlights the corrupting influence of campaign donations as the City Council has failed to pursue the possible misuse of over $40 million of our money, in large part because at least ten Council Members have received cash contributions from IBEW political slush funds. 

The billing problems associated with DWP’s new $162 million Customer Information System have also added to the political complexity of any rate increase. Over the last six months, numerous residential and commercial customers have received inflated bills, resulting in numerous billing inquiries, long wait times, rude customer service representatives, disconnected phone calls, and failures to remedy incorrect bills.  This has resulted in numerous complaints to the City Council and extensive media coverage.  

Marcie Edwards, DWP’s new General Manager, has made the Customer Information System and poor customer service her number one priority.  She has appointed a senior manager who has earned the trust of many Ratepayers to oversee the solution and hopefully solve the problems in a reasonable time frame. 

Unfortunately, DWP’s Customer Service Department had a reputation for poor service before the billing problems, consistently ranking in the lower tier compared to other regional utilities.  Contributing factors include overly restrictive work rules, including the inability to evaluate employee performance, high levels of absenteeism, and a disproportionate number of former City employees that were dumped on DWP during the City’s fiscal crunch. 

Union Bo$$ d’Arcy has also contributed to the adverse publicity by highlighting issues with the new Customer Information System in order to deflect attention away from our $40 million.  He even recruited Assembly Member Raul Bocanegra (D-Pacoima) to call for a State audit of “the flawed development and implementation of the LADWP’s new customer information and billing system.”  

The political fallout from the Joint Safety and Training Institutes and the Customer Information System has provided cover for City Hall to delay the $1 billion rate increase so that it will not interfere with the optics of the half cent increase in our sales tax that is designed to raise $4.5 billion over the next 15 years, an average of $300 million a year.  

This will allow the City Council to ignore alternative financing scenarios that do not require massive tax increases, but rather rely on the future revenues from the 20% tax on Power System revenues to service the debt used to finance the repair of our streets and sidewalks.  Instead, the City Council wants to divert these new DWP tax revenues to pay for salaries, benefits, and pension contributions.  

But the day after the November 4 elections, the DWP $1 billion rate increase will be at the top of the City Council’s agenda. 

Before proceeding with the half cent increase in our sales tax or the 25%, $1 billion a year increase in our water and power rates, voters, homeowners, renters, businesses, and Ratepayers deserve an honest analysis of the financing plans to repair our streets and sidewalks and any rate increases before the City Council places any tax increase on the ballot. 

Without full disclosure, voters will question the motives of City Hall and reject any tax increase based on their lack of trust of City Hall. 

 

(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

 

 

 

 

 

 

CityWatch

Vol 12 Issue 27

Pub: Apr 1, 2014