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Wed, Apr

DWP Reform: Ratepayers Beware

LA WATCHDOG

LA WATCHDOG--The reform and restructuring of the governance and operations of the our Department of Water and Power is intended to make our utility more nimble and efficient so that it is better able to address the increasing complex operational, organizational, technological, management, financial, and regulatory challenges it faces and will continue to face in a rapidly changing and increasingly complex environment.  At the same time, our engineering focused DWP must earn the trust, confidence, and respect of its 1.5 million Ratepayers by developing into a more customer centric and efficient enterprise.  

There are three areas of reform that have been discussed at multiple meetings throughout the City: 1) a more independent Board of Commissioners designed to limit the interference from the City Council and the Mayor, 2) improved contracting and procurement policies to eliminate overly burdensome overhead and layers of bureaucracy and red tape, and 3) the establishment of a DWP Human Resources Department for the Department’s 9,000 employees, separate and distinct from the City’s slow moving Personnel Department and City’s cumbersome civil service regulations. 

While there has been considerable discussion about the three areas of reform, there has been no meaningful discussion of the Transfer Fee/Tax because of the class action litigation alleging that this fee/tax is illegal because it violates Proposition 26 (the Supermajority Vote to Pass new Taxes and Fees) that was approved by California voters in 2010.  However, Councilmember Felipe Fuentes suggested that the Transfer Fee/Tax, which provided $267 million to the City’s coffers this year, be capped at its 2010 level of $221 million.  

On the other hand, a better idea would be to ask the voters to phase out the Transfer Fee/Tax over a 10 year period and waive the repayment of the $1.5 billion of illegal transfers made since 2011.  But to win over the voters, City Hall must be willing to reform its budget policies by agreeing to place on the ballot for our approval or rejection a charter amendment that will require the City to Live Within Its Means.** 

There also appears to an appetite by City Hall to hit up the Ratepayers to support other initiatives that are not part of the core mission of the Department. 

At Tuesday’s meeting of the City Council, Councilman Mitch O’Farrell, Chair of the Arts, Parks, and River Committee, proposed that DWP (read Ratepayers) subsidize the utility bill of the Department of Recreation and Parks to the tune of $20 million a year.  Mayor Garcetti also proposed to lower the rates for the Los Angeles Unified School District, DWP’s largest customer. 

While Recreation and Parks and LAUSD provide important public services, the Ratepayers should not be required to foot a portion of their utility bill.  This is not our responsibility.  Rather, these poorly managed government entities should feel the pain of the full impact of the recent $1 billion rate increase, just as we Ratepayers are forced to do. 

There are also others on the City Council and in the environmental community who are pushing the One Water agenda which would essentially put Ratepayers on the hook for financing a good chunk of the City’s $8 billion stormwater and urban runoff plan over the next 20 years.   This would deprive Angelenos of the right to approve or reject this massive project.   

There are others who want to expand the Department’s green agenda for the Power System without giving any consideration to the impact on the Ratepayers.  As it is, we are going to be hit with a $1 billion rate increase over the next 5 years plus another $150 million in new DWP related taxes.    

City Council President Herb Wesson has taken DWP reform under his wing, conducting a number of open meetings of the Rules Committee which he chairs.  He has also indicated that he intends to meet with labor and environmental groups, hopefully in open and transparent sessions where the public will be able to listen in and participate.  

We have yet to see any definitive ballot language.  This is disturbing since the ballot language needs to be determined within a month in order to be on the November ballot.  And as we all know, the devil is in the details, especially when it involves the politicians and their cronies who occupy City Hall. 

The reform and restructure of our Department of Water and Power will be a tough sell to the voters who do not trust or respect DWP and City Hall.  Rather than trying to do too much which will only complicate any ballot measure, the City Council and the Mayor (who has yet to come forward with any definitive thoughts) are strongly advised to follow the old KISS adage: Keep It Simple, Stupid.

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** The “Live Within Its Means” charter amendment, if approved by the voters, will require the City to develop and adhere to a Five Year Financial Plan; to pass two year balanced budgets based on Generally Accepted Accounting Principles; to benchmark the efficiency of its operations; to fully fund its pension plans within twenty years; to implement a twenty year plan to repair and maintain our streets, sidewalks, and the rest of our infrastructure; and to establish a fully funded Office of Transparency and Accountability to oversee the City’s finances and operations.

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(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

 

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