City Hall’s policy of burdening the municipal utility with costs that are the responsibility of the general fund are improper and probably illegal under Proposition 218 protections requiring voter approval of rate and tax increases, the County Grand Jury reported Wednesday.
No, it’s not the DWP or LA City Hall or the LA County Grand Jury. It’s Sacramento. But it might as well be LA for the games our city leaders are playing as they treat the DWP as a cash cow to mask their fiscal irresponsibility that has LA operating in the red and facing massive budget deficits for years to come.
“Based upon the evidence, the grand jury finds that revenue from utility ratepayers is being used improperly to subsidize general government activities…At the very least, these subsidies are of questionable legality under Proposition 218,” the Grand Jury Report said.
“The scope of this report is limited to the Proposition 218 requirements that cities cannot charge ratepayers more than the cost of providing utility services, nor can they use revenue from ratepayers for non-utility purposes. The intent of these requirements is to prevent cities from overcharging ratepayers for utility services, and using the surplus funds for other city purposes.”
The 12-page report, backed up with supporting documents, accuses city officials of covering up their own consultant’s report that warned the city was in danger of violating Prop. 218 by using ratepayer-funded Sacramento Department of Utilities revenue for other purposes.
Among the abuses: Subsidized rates for providing water service to city parks and other city facilities, solid waste disposal services for city facilities and events, he Economic Development Capital Improvement Program and work on city parks, buildings, and sports facilities.
The identified abuses have cost the public at least $21 million in recent years and are increasing at the rate of $5 million a year.
Sacramento’s misappropriations of utility revenue are pennies on the ground compared to the abuses that are going on in LA.
LA City Hall already has a judgment against it for more than $130 million for illegally transfering water revenue to the general fund — money that has not been returned to ratepayers.
Now, in a time of fiscal crisis, the city has dramatically expanded charges for other city services to the DWP and just Tuesday DWP General Manager David Freeman demanded blanket approval to use the utility as the economic engine to create jobs in the city through subsidies, reduced rates and outright land giveaways to private companies.
Surely, there are documents in City Hall files that question the legality of these and other actions such as trash fee abuses and raiding of special funds for general fund purposes.
Surely, the lack of transparency and honesty by city officials in Sacramento are little white lies compared to the level of insider dealing and corruption in LA.
The only real question is whether competent authority in Los Angeles will investigate the abuses here and hold the responsible officials accountable.or whether ordinary citizens have to go to court to get their elected officials to respect the rule of law.