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Is the DWP Illegal Paying for Other City Services?

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.
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6 Responses to Is the DWP Illegal Paying for Other City Services?

  1. anonymous says:

    Wouldn’t the tiered allotment for larger lots be a violation of 218 (and an equal protection violation) as well and hardly a means to conserve? For anyone over an acre, they may only use the same amount as one acre. However, if one were to subdivide their multiple acreage, they get alot more water. From all appearances, it seems LA profits from the drought.
    Example (DWP tier one-same zone for single family homes):
    one acre-110 HCF
    5 acres-110 HCF
    10 acres (LA still has some of those)-110 HCF
    Now, subdivide 5 acres into 10 1/2 acre lots.
    1/2 acre-90 HCF
    Total for 10 lots @ 1/2 acre–900 HCF
    That is, the once 5 acre lot that was allowed 110 HCF is allotted 900 HCF if subdivided.
    Subdivide the 10 acre lot into 20 1/2 acre lots.
    10 acres–110 HCF
    1/2 acre–90 HCF
    Total for 20 lots @ 1/2 acre—1800 HCF
    The 10 acre lot that is allowed 110 HCF, once subdivided, gets 1800 HCF.
    As you can see, the denser the lots, the more water one gets. Never mind that each lot will have its own washer and dryer and pool. According to a DWP higher up, it’s a matter of allowing one to have a glass of water (and we know how healthy our tap water is) versus the evil large lot guzzlers who wantonly take all the water LA has. So one pool on 5 acres is a guzzler; but 10 pools on the subdivided 5 acres are not. This hardly seems like a means to conserve.
    Now, if one were to build condos or apartments on that acreage, the amount allotted skyrockets.

  2. Chris Rowe says:

    If you have a large lot, and you water it, you will pay for it. If you are using enough water to keep a one acre or a 5 acre lot green, then you are probably going above the First Tier, and if it is really green, most likely to the Third Tier.
    You will pay a premium for that extra water.
    Those who have those large lots – like downtown – they can afford the extra premium.
    Out in the Valley where we have large older homes with big lots and horse property – our grass died.
    This is another issue that we need to deal with before the two day watering kills our lawns – and water reduction kills our plants – again.
    Of greater concern – did the water money transferred to the general fund prevent the upgrades to our 100 year old pipe infrastructure?
    If the money wasn’t transferred, where would our water rates be today? Would we have more purple pipe and more treatment plants?
    We also have to stop subsidizing the City with our Energy money as well.
    While coal, gas, and nuclear are cheaper – their costs to the environment and to public health are not added into the equation. We will pay more in health care costs to treat people with asthma and emphysema. And as those people age, it is Medicare that is going to pick up the majority of the tab for what was caused by our lack of foresight in not removing air pollutants from our car emissions, our factories, etc.
    You do not have to believe in “global warming” to understand that bad air quality makes people sick.

  3. anonymous says:

    ‘Good points Chris.
    I have a large lot and I cut my water usage in half. My lawn is a politically correct brown. It will cost around 20 thousand to replace my dead landscape (if that opportunity ever arises).
    On half the amount of water used as last year, my bill doubled because of my lot size. It’s now more than my insurance and property tax combined. And, yes, I live in an older home in the Valley. I feel it’s my duty to preserve this piece of open space, but clearly it seems the City would reward me with a much lower water bill if I subdivide and, subsequently, use more water.
    So, my bill doubles from last year and triples from 10 years ago, yet my usage was reduced by 50 percent. Clearly my payments this last decade did not seem to go into the infrastructure. The lot size discrimination is insult to injury.
    I think I deserve a sizable rebate for the precious water the city wasted on those broken mains, in addition to the rebate we are owed due to their over billing. What’s good for the goose, yes?
    .
    Can they measure the number of HFC’s lost and can we, the rate payers, bill the City (shared sacrifice)?
    No need to answer.

  4. Hank says:

    Well, it looks like Mr. Trutanich has a new task to add to his list – like arrest the Mayor/City Council/Head of DWP for violating Prop 218. Boy, I’d like to see that on the evening news!

  5. Kristin Sabo says:

    I say ‘let’s go to court’.
    In ways so similar that it will scare you, parts of Northern California have been the mini poster children for what is going on here. Vallejo is in bankruptcy from its overburdened pension system. Now we have the City of Sacramento utilizing its utility just like Los Anegles utilizes DWP — as a friggin BANK.
    Between the two, we have a mirror image of Los Angeles just a little ahead of us in the timeline.
    Time to catch up – time to sue.

  6. I’ve really enjoyed reading your articles. You obviously know what you are talking about! Your site is so easy to navigate too, I’ve bookmarked it in my favourites :-D

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