What’s Wrong with City Hall: White Elephants, Living Wage Jobs and Squandered Public Money

A half dozen activists gathered in a small meeting room Monday behind the DWP’s cafeteria to hear top officials explain why they need a blank check for electricity rate increases that will drive up bills by 50 percent or more in the next five years — and far higher in the years ahead.

It was a rushed last-minute snow job to pretend to meet the DWP’s legal obligation to allow 90 days for public debate on rate hikes. Chief Financial Officer Jeff Peltola matter-of-factly laid out with elegant logic why the utility’s management needs billions of ratepayer dollars to rebuild the aging electrical infrastructure, buy renewable energy at market prices or above, doesn’t need to contain payroll costs and, most importantly, doesn’t ever need to ever engage again in these cumbersome public debates over policy and practice.
 
Today, just 24 hours later, DWP Commission will give the green light to lifting the 4 percent annual ceiling on pass-through increases for renewable energy and the City Council’s Energy and Environment Committee will rush the radical policy change to the full Council for approval.

It’s everything Measure B was about — green power no matter what it costs, no detailed planning or analysis, no public scrutiny or debate — and more, many billions of dollars more, because it allows the DWP to spend whatever it wants any way it wants.

Peltola actually used the five-year study of DWP by PA Consulting to help make his case for the caps on pass-through rate hikes even though the report’s sharp criticisms of dozens of policies and practices has been totally ignored.

It’s desperation time at City Hall. The ship of the city is sinking under the weight of falling revenue and soaring costs. They will do anything to get their hands on your money to survive another day.

Last week, Council President Eric Garcetti boasted why public subsidies were needed for the W hotel in Hollywood and how it would create temporary construction jobs (mostly for non-residents) and permanent living wage jobs (mostly for residents).

Today, it will pitch lending $30 million to insiders at CIM Group to rebuild the Kodak Theater in Hollywood so it can be home to a Cirque du Soleil troupe with its $110 tickets and living wage jobs (putting aside the boon it will provide experts in waxing).

The Kodak Theater is a monument to the failure of city policies, a financial disaster that provides only a single moment of excitement a year, Oscar Night — something that will almost certainly move to the Nokia Theater at LA Live if this sweetheart deal goes through.

It is the centerpiece of the Hollywood & Highland shopping and entertainment complex, the city’s greatest white elephant (or maybe second greatest after the LA Convention Center if long-term costs to the public are factored in).

The city bestowed a $90 million direct subsidy to this project that cost $600 million to build but lost two-thirds of its value by 2003, just two years after it opened. Millions more was poured into it in parking and other subsidies.

Now, the council is about to throw good money after bad at it. But it’s federal money so who cares?

The timing of these two actions is not coincidental.

City Hall is in such terrible financial straits it is slashing services to the public even as it is offering sweetheart deals to city workers  — deals that threaten to leave city pension funds insolvent and taxpayers on the hook to make them good.

City Hall is in such terrible shape politically that it can do know better than to throw public money at political slogans like “green energy” and “creating jobs” and “affordable housing”.

You can write them blank checks if you want. You can trust them to spend them the money as they promised. But then you have no one to blame but yourself when your money goes into city workers’ paychecks, sweetheart deals for developers and contractors and you get luxury hotels and poverty-level jobs.  

Just don’t say you weren’t warned.