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Something Is Rotten at City Hall, Will We Fix It?

A lot more is at stake in LA these days than just electricity rate hikes and closed parks and libraries.

Our system of government itself has been corrupted to the point of dysfunction. That’s why the city is running massive deficits and facing the threat of bankruptcy, why workers facing layoffs are being transferred and getting huge pay raises, why City Hall costs too much and delivers too little from crumbling streets and sidewalks to green energy.

It didn’t just happen overnight. The cancer of corruption has been eating away at City Hall a long time with unions, developers, contractors, consultants and their campaign cash holding almost all the power, and the people almost none.

The administration of Antonio Villaraigosa has accelerated this trend by using slogans as symbols in place of real policies — a million trees, mayoral takeover of the schools, the carbon surcharge to close coal power plants to name a few examples — and intimidation in place of persuasion to coerce commissioners and bureaucrats into docile obedience to his self-serving political agenda.

Commissioners are supposed to be citizen watchdogs on the operations of all city departments but they have become mere lapdogs with rare exceptions like Jane Usher and Nick Patsaouras who resigned as heads of Planning and DWP rather than do the mayor’s bidding when they knew what they were ordered to do was wrong.

None of the four DWP Commission members had such qualms last Thursday when they approved massive rate hikes without even considering the Council-ordered report by PA Consulting which called for major changes in policy to achieve transparency, effective management and coherent green energy policies.

They didn’t even have copies of the report on their desks when they rubber-stamped the mayor’s ill-conceived “carbon surcharge” policy. They didn’t even consider the recommendations of the DWP citizens committees when they proposed gutting efforts to create an independent Rate Payer Advocate by putting it under Controller Wendy Greuel, who owes her political career to the IBEW as much as to her personal charm.

As they did when the commission approved a 2,000 percent increase in the Energy Cost Adjustment Factor surcharge six months ago, the City Council on Tuesday repudiated the DWP Commission’s approval of an 800 percent increase, and did so unanimously.

In the space of eight days, the mayor had gone from proclaiming a 20 to 30 percent rate increase — which he falsely claimed was just a $2.50 a month increase — as necessary to raise nearly $700 million extra annually to replace DWP’s coal-burning plants with solar and wind energy.

He ignored the fact that the DWP’s five-year plan contains no provision to reduce the utility’s reliance on coal for 45 percent of its energy, the only reason its rates are 16 percent lower than other utilities.

By Thursday, the commission changed the story. It based its action not on replacing coal but on avoiding a credit rating downgrade due to the “under-collection” of $130 million in revenue when natural gas prices soared three years ago — a fraction of the revenue it had declared surplus and turned over to the general fund during that time.

By Tuesday, the mayor was resorting to the desperate argument that the city will go bankrupt if rates aren’t raised high enough to keep paying $220 million a year — 8 percent of all electricity revenue — to the general fund.

The shifting argument, the dishonesty of DWP officials, the lack of transparency cost him dearly politically and in terms of credibility.

City Hall is now in chaos.

Early retirement with sweetened pensions for 2,400 workers, threatened layoffs of 4,000 others have left nearly every department outside the DWP, Harbor, Airport and LAPD into confusion with gaps in skills and experiences and uncertainty about which services to protect and how to provide them.

We are nine months into the fiscal and still have a budget deficit of more than $200 million with much bigger deficits looming in the years ahead.

It’s clear nobody at City Hall has a clue about what to do. They are only making matters worse.

The commitment the Council made Tuesday in defying the mayor’s bullying tactics and promising to bring the shadowy policies of the DWP into the light of day is the first step on the long road to cleaning up the corruption at City Hall.

Citizen commissioners should take heed, starting with the DWP Commission.

In their acquiescence to the mayor’s coercion, they have failed to fulfill their duty to provide oversight on the DWP. They have been called out by the public and the Council, their actions denounced.

The honorable thing would be to resign immediately. And so should every other commissioner who has succumbed to pressure from the mayor or others to put special interests ahead of public interests.

It’s my belief that few would still be serving if they put honor ahead of position.

Department managers and other high-ranking bureaucrats have the same moral obligation to stand up in public and private for what is right for the city even in the face of threats to fire them.

It’s asking a lot of people to put themselves at risk for the common good of the city and its people. But if those in high positions don’t make a stand for what’s best for the city, what do the think the rabble, of which I’m proud to be part of, to do?

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19 Responses to Something Is Rotten at City Hall, Will We Fix It?

  1. Anonymous says:

    Lee Alpert, do the honorable thing and resign. Your integrity has been damaged. You cannot lead the agency anymore, you have no credibility. We don`t trust you.

  2. steve says:

    Don’t say i didn’t warn ya!

  3. Anonymous says:

    Things appear to be out of control in City Hall. Who is in charge? It seems Antonio has checked out, does not care.

  4. Anonymous says:

    Conspiracy Theory with Jesse Ventura – “Global Warming”
    “Now, global warming,” the narrator introduces this third episode of truTV’s Conspiracy Theory with Jesse Ventura. “The most serious threat to our planet—or a plot to cheat, extort and control you and everyone else. Jesse Ventura and his conspiracy investigators FOLLOW THE MONEY TRAIL around the world and back, out to expose the greedy power brokers who pull the strings and rake in billions. THE ONLY GREEN HERE IS COLD HARD CASH. THE MOST FRIGHTENING INCONVENIENT CONSPIRACY YET: THE GLOBAL WARMING SCAM.”
    Interviewed next is Amit Chatterjee, CEO of Hara Software. His name is not on Jesse’s secret list, but rather was dug up by the Governor’s researcher Holly, who characterizes Hara Software as “basically poised to be the Microsoft of carbon emissions.” As the unsuspecting executive is questioned on camera at his Silicon Valley headquarters, Jesse Ventura eavesdrops from the next room. Soon the talk turns to Al Gore.
    AMIT: We don’t have any direct relationship with Al Gore.
    JESSE (still lurking outside): No direct relationship with Al Gore? Let him tell that to me!
    At this point Jesse barges into the room to ambush the hapless CEO, who—after visibly gulping—declines to comment on Al Gore’s prospects for making billions off the global warming scam. “All I can defend is what my company does,” says Chatterjee. “I can’t speak for anybody else.”
    “The CEO is dodging the questions,” the narrator interjects, “but Jesse Ventura is not about to let him off the hook.”
    Badgering the witness, Jesse likens this “war on the environment” to huge Iraq War profiteering. Mr. Chatterjee, however, sticks by his guns and replies that if saving the environment is a war, “I don’t think that’s the purpose.”
    “Yeah, maybe they never met at the company picnic,” Jesse grudgingly allows in a voiceover, “but Al Gore owns a piece of his business. Al Gore’s making lots of money on global warming, and that’s the problem. He’s not hiding; he’s upfront about it. He won an Oscar and a Nobel Peace Prize. But is he out to control the world? I know Al Gore. I don’t think he’s out to do that. There’s got to be someone else behind this. Someone who’s a lot less public. Someone behind the scenes, really pulling the strings.”
    Back on the opposite coast, supervising producer Alex Piper descends on Washington, D.C., where he’s tracked down what our narrator calls “the world’s leading and loudest opponent of the global warming movement,” Lord Christopher Monckton. Is this the third scientist on Jesse’s secret list? Lord Monckton’s technical credentials are nil. But not to worry. Alex Piper can lead a witness like a horse to water.
    Following those five lordly Yeses and one especially enlightening Um-huh, the offscreen narrator is persuaded that Lord Monckton “takes the conspiracy theory to a whole new level. He says the entire global warming conspiracy can be traced to one man. And he’s not Al Gore.”
    He is, the narrator goes on, Canadian businessman Maurice Strong, “a wolf in sheep’s clothing, who pretended to be green so he could get rich and take over the world. You see, Maurice Strong is also a billionaire—an oil billionaire. And he was linked to the United Nations oil-for-food corruption scandal.”

  5. Anonymous says:

    - – - – - – - – - – - – - – - – - -
    MARCH 22, 2010
    Page 14 of the Report
    • Council rejection of the DWP Board’s action would be the most immediate and direct route to bankruptcy the City could pursue.
    • Council rejection of the DWP Board’s action would not only reject the additional $20 million supplemental transfer, it would also nullify the $73 million transfer scheduled to be deposited to the City’s General Fund before the end of the Fiscal Year.
    • If the City does not receive the additional $73 million transfer, it will run out of cash before the end of the fiscal year.
    • Failure to meet basic obligations would send the City into a financial tailspin, leading to further downgrades, and an inability to borrow to meet future financial obligations.
    The DWP rate increase in NOT about
    CARBON REDUCTION or GLOBAL WARMING, but about bringing more money to the GENERAL FUND. The mayor keeps on saying he needs to make the TOUGH decisions. It’s time for the Mayor, including Chief Administrative Officer , Chief Legislative Analyst, and Commissioners who rubber stamp the mayors ill conceived increases or ideals, to STOP attempting to fool Angelenos and make the ultimate TOUGH DECISION and RESIGN.
    The council voted unanimously to take jurisdiction over the DWP rate hike plan, but at the eleventh hour the council will vote for the rate hike increase. Its SAD the council does NOT exercise their INDEPENDENCE which is why the citizens of LA elected them into office. Where is the LEADERSHIP Mr. Council SET PRECEDENT Garcetti and City Council? Angelenos only need 10 council members who can exercise their independence and override the rate increases, but Angelenos don’t hold your breathe.

  6. Anonymous says:

    @5:41. Thank you for listing this section of the Mayor’s written statement to the Council. To the financial industry – specifically City Bond holders – the phrase:
    “…rejection…would be the most immediate and direct route to bankruptcy the City could pursue” surely rattled them.
    Money loves stability; a reassuring, clear and consistent message. Weeks ago, the CAO went to great pains to assure nervous investors. So did the Mayor when he appeared before City Council.
    No wonder Mr. Santana had that private conversation with Villaraigosa before Mr. Santana reported to Council on Tuesday that the Mayor said to tell them the City was not going to go bankrupt.
    Whoever (or is it whomever?) put that phrase in writing is a rank amateur at a time when measured professionals are needed.

  7. Anonymous says:

    6:51PM, the Mayor`s “economic strategist”, Szabo, put the phrase in writing. Need say more.

  8. This is what happens when you have unchecked liberals in power.
    Total catastrophe.
    Voters are about to pay a horrible price for electing and re-electing incompetent liberals who feel that government has some type of mission to be all things to all people.
    The very idea is ludicrous, yet it is one of the core values of the Statist.
    Things are going to be very ugly for the next two years here.
    Hopefully, many of these corrupt bureaucrats will be out of power by then.

  9. Anonymous says:

    …well, Szabo’s supervisor — Jay Carsons — isn’t vetting his homework and no one ran it by Austin Beutner, the Mayor’s retired investment banker.
    This morning we are back to GREEN JOBS! In addition to a Villaraigosa spokesperson saying SHE sees “no conflict” between job promises and the rate hike (who asked for HER opinion? Stumbling amateurs!), they are going to telcon Al Gore from Tennessee.
    Scale back the rate hike and bring it in line with the State’s.

  10. Anonymous says:

    How much is Jay Carson getting paid and what does he do? No one has stated that this idiot Mayor wants to go green yet he flies a jet fueled plane to Washington and other cities all the time. Szabo looked like a scared cat in council. Didn’t know how to respond to questions and appeared to be caught off guard. Little Szabo needs to man up and research before jumping into the lion’s den.

  11. Anonymous says:

    This is what happens when you have unchecked liberals in power.
    This is what happens when you have poor leaders in power.
    Those of you that look at everything through a lib/con filter are extremely shortsighted.

  12. Anonymous says:

    This needs to be repeated over and over until it sinks in: The DWP has plenty of money to fund the transition to Green Power WITHOUT a rate increase — it just needs to stop siphoning hundreds of millions over to the general fund as a means of hiding the city’s structural deficit. The solution is simple: Stop hijacking DWP profits to fund other departments, pay for the Green Power program out of the department’s own money ($386M in profits) and then BALANCE THE DAMN BUDGET without the transfers. Will it be painful to force-wean the city off the DWP teat? Yes. But it’s time to do so. The Dimwit Brigade in the mayor’s office will continue to spin the rate increase as a necessary step to achieve the mandated reductions in coal-fired plants etc. But the money is really to offset the general fund’s deficit. If DWP profits were held in the department to cover the cost of making this transition in its essential service, no rate hike would be necessary — but they’d have to find another tax to deal with the deficit. The department can and should achieve its Green Power WITHOUT any additional rate increase.

  13. Anonymous says:

    A City bankruptcy could force the sale of assets, and the biggest one is DWP. That would be a game changer for D’Arcy and The Company. Maybe it’s time to consider privatizing DWP?

  14. Anonymous says:

    A City bankruptcy could force the sale of assets, and the biggest one is DWP. That would be a game changer for D’Arcy and The Company. Maybe it’s time to consider privatizing DWP?
    If you want the city to be poorer than it already is and utility reliability to tank, then yes consider it.

  15. Anonymous says:

    “If you want the city to be poorer than it already is…”
    False premise. The mission of the DWP is to deliver water and power services to customers. Full stop. It should not be viewed as a jobs machine, an ATM that funds a bloated city bureacracy, or a bailout fund that hides the city’s structural deficit.
    Complaining that the city will be “poorer” if the transfers are stopped is like complaining that the thief will be “poorer” if you stop him from picking your pocket. It’s a bullshit argument made mostly by thieves.
    “…and utility reliability to tank…”
    Also a false premise. The fact is, under the current rate structure the DWP makes hundreds of millions in profit. If we stop hijacking that money into the general fund and instead spend it on improving DWP services, utility reliability will improve, not tank. We might even be able to rebuild some infrastructure to slow down the pace of exploding water mains under our streets…

  16. Anonymous says:

    @4:33. Amen.

  17. Anonymous says:

    Anyone else listen to the Energy Council Committee meeting today? Did Peltola say that $$ which accumulates in the Renewable Energy Trust Fund could be also used for other purposes. Heard right? Wrong?

  18. James says:

    To Phil Jennerjahn on March 25, 2010 7:30 AM,
    You need to grow up and understand that Republicans/Conservatives have not been any better (in fact they have been worse) than Democrats/”Liberals” when it comes to fiscal responsibility.

  19. Anonymous says:

    4:33, what I’m said is really not that complicated. Let me give you my arguments, which I think are pretty straightforward and logical.
    First of all, if DWP is privatized, the city loses the utility tax. Unlike the more questionable power fund tax, which is what most people refer to when they’re talking about the city hijacking money, the utility tax is standard among all municipal utilities and is a legally justified transfer into the General Fund. It’s a big reason why other cities such as Glendale, Burbank, Pasadena, and DWP’s twin in the north, SMUD, have all invested money into running their own generation and distribution. It’s why cities in the bay are battling with PG&E right now over the right to kick out PG&E and start their own utilities. For DWP, it’s also the reason why rates are generally lower in LA than in other areas. Privatizing DWP will cause the city to be poorer because besides eliminating the utility tax and giving the city less money to spend, ratepayers would also be paying more.
    And when I said utility reliability would tank, I was comparing DWP reliability now to if it was privatized. As far as power is concerned, DWP has some of the best reliability in the industry. If you want to know what the industry uses to gauge reliability go look up SAIFI and SAIDI ratings on the internet. DWP has better ratings than the private and municipal utilities in the area, which is why it’s been ranked by JD Power and Associates several years. On top of that DWP has a unique infrastructure that allows it to be more reliable, but only if its workers are quick enough and familiar enough with the system to respond. For one it runs one of the few ungrounded delta distribution systems in the nation. Second it runs at a lower distribution voltage that lets lineman work on lines without shutting off the power to your home. Third, DWP runs its own transmission and doesn’t have to depend on Cal-ISO like 80% of the state, which basically means less power outages than 80% of the state. If DWP was to get sold, yes reliability would tank. And if DWP did get sold, there’s a 99% chance it would be to Edison (because they’re the only ones who would be able to buy it and are logistically close enough to run it) and LA power would go from being a reliable system in the grid to a tiny little spot on Edison’s service area.
    If we stop hijacking that money into the general fund and instead spend it on improving DWP services, utility reliability will improve, not tank. We might even be able to rebuild some infrastructure to slow down the pace of exploding water mains under our streets…
    This is the only thing I agree with. Eliminate any transfers on top of the utility tax and you no longer need a rate hike. But if you truly believed this was the solution, why did you advocate privatization in the first place?

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