Antonio Villaraigosa committed one of the worst political blunders imaginable on Tuesday, costing himself, his mythical green energy plan and the Department of Water and Power what little credibility they had.
It gives credence to gadfly John Walsh’s ravings that the mayor is sick or drugged. Maybe he’s just out of touch and surrounded by mediocrities above him pulling his strings and below him doing his bidding.
It’s Measure B all over again, except this time the magnitude of the boondoggle and blundering deserves BBB, like the city’s bond rating that has fallen under his ineffective leadership as fast as the budget deficit has grown.
Now, in an amazing miscalculation to drive desperately needed cash into the general fund, he tried to bill a $684 million electricity rate hike that would raise bills 20 to 30 percent as a $2.50 surcharge to replace billions of dollars in dirty coal-burning plants with wind and solar power. He coerced the DWP Commission to unanimously back his plan no questions asked even in the face of the certainty power bills would double and triple in the years ahead.
Even more incredibly, on Tuesday, he resorted to trying to blackmail the City Council into going along by warning the city faced bankruptcy if it doesn’t get the DWP’s full $220 million transfer of “surplus” electricity revenue on top of its 10 percent utility tax.
It backfired into one of the greatest political blunders LA has seen in ages.
In a City Hall that is bankrupt of leadership, the mere mention of the possibility that LA could have to file for bankruptcy is the ultimate taboo.
The Council voted unanimously 15-0 to take jurisdiction over the rate hike plan but not until one after another took shots at the mayor, his staff, the DWP management and the total lack of honesty, transparency and planning.
It was historic — if even for a moment since some rate hikes are inevitable. But for the first time there is reason to hope that this rogue agency will be brought under some semblance of control and accountability.
Tony Cardenas went so far as to directly accuse Interim General Manager David Freeman of outright lying to the Council nearly a decade ago when he previously serve as GM about the cost of cleaning up the mess in Owens Valley the DWP had caused by stealing its water and turning it into a dust bowl.
Freeman, who now wants to pave the area with 80 square miles of solar panels at an unspecified cost in the billions, had claimed mitigation of the damage would cost $150 million when his own consultant’s report said it would cost three times that. The actual cost, Cardenas noted, has been $450 million.
Anyone who ever verified Freeman’s glib musings could find hundreds of similar lies, deceits and obfuscations.
DWP CFO Jeff Peltola and CEO Raj Raman also felt the sting of hostile questioning by the Council over their long-standing pattern of false and misleading statements.
Raman tripped up offering a lame excuse on why the DWP Board didn’t act three weeks ago and Peltola for misleading the Council by assuring it two months ago that the DWP would make its full transfer payment and not leave it $73 million short as it did.
At every junction, the DWP management under Freeman and the DWP Board were exposed for disregarding the PA Consulting reports recommendations as the company’s three representatives stood their ground in response to questions that showed there is no plan to get rid of coal plants and other lies the mayor has told.
The mayor’s briefing paper and the heavy-handed comments of Deputy Mayor Matt Szabo, the PR man who has become the administration’s financial wizard, were the bombshells that removed any doubt that Jan Perry would prevail in her effort to take jurisdiction. She hold a committee hearing Thursday to determine what the next steps are.
The Council completely repudiated the mayor and the cornerstone of his strategy to save his political career with a phony green energy plan that united the business community which warned of massive job losses and residents who warned that electricity would become unaffordable for tens of thousands of people.
Only the environmentalists who support green at any price and the IBEW that supports their paychecks and union treasury no matter what it costs everybody else were on the mayor’s side.
How someone who once had as much promise as Antonio Villaraigosa could become so out of touch, so irrelevant is an astonishing turn of events.
Everything he does now will be tainted more than ever by the suspicion that he’s trying to deceive the public and serve one special interest or another at public expense.
He is a badly weakened mayor who was held in contempt by a City Council that for too long went along for a ride on his bandwagon. He is a crippled lame duck without the ability or credibility to provide leadership..
Worst. Mayor. In. City. History.
And Matt Szabo is a tool. Santana’s rebuke of him was humiliating — even more so because he did so in the mayor’s voice, quoting Villaraigosa as saying Szabo is full of shit on bankruptcy.
The kid either overreached without authority, or he’s had the rug pulled out from under him by the mayor. Either way, he’s exposed for what he is — a kid way, way, way out of his depth.
This City Council’s leadership and intellect bar is pretty damn low. When they’re looking down and pissing on your head, it’s a sign you have no game at all…
Szabo is a total tool. Looks like a deer in headlights all the time, too.
Tell me he’s done in this town. Please.
Here’s a link to the actual original note that Villaraigosa had delivered to Garcetti with a horse head:
http://web.mac.com/waltermoore/PDF/TonyVNote.pdf
One thing makes no cents.
If the DWP made profits of more than $356M last year, then how dare they ask for a rate increase of even eight-tenths of a cent per kilowatt hour?
Good on the City Council for finally doing something for the “folks,” exposing A.V. and the DWP lying bullies for what they are, and taking the power out of their hands on this one issue.
$356M and they say they’re operating at a loss, and their bond rating is going in the tank.
If that’s happening, which I doubt, maybe it wouldn’t if they hadn’t given their employees whopping raises over five years, cushy early retirements, and aren’t absorbing all the dead wood the mayor’s sending them to save their jobs and giving them humongous raises.
Who cares about their bond rating? If any rate hikes go into effect it’s our credit ratings that will tank, because DWP bills are already out of sight.
If you live in the Valley, you’re already dreading summer and the DWP bills that will certainly follow.
Ron, this is your website & maybe I should be more respectful but after reading “How someone who once had as much promise as Antonio Villaraigosa could become so out of touch, so irrelevant is an astonishing turn of events. ”
This is BS (a big stinking pile of BS). What’s your problem? Villar showed promise? Are you out of mind? Just because he’s mexican we should forget that he’s a LOSER. Let’s see: 1) 1.4 GPA in chicano studies (got into UCLA just because he’s a “minority”); 2) went to a drive through law school; 3) failed the bar 4 times; 4) could never had a real job, just a “union organizer” and a lackey of Broad (didn’t he employ him when he was in between “jobs”?); 5) total lack of moral character, etc etc etc
STOP this PC. Villar should has never been allowed to be in a position of power. Only clueless PC-brainwashed idiots prevalent in LA would vote for this LOSER.
What do you expect when Szabo and Carson are running the City. Catastrophy. Their boss is out and around town………….
This is taking poppycock to a new high — When the CAO states that if the DWP Board decides to transfer the $73 million.
Let’s be perfectly clear – THE DWP BOARD IS APPOINTED AND SERVES AT THE PLEASURE OF THE MAYOR AND TAKES DIRECT ORDERS FROM HIM LIKE A BUCK PRIVATE.
PS: As usual, John Walsh is exactly right on target – The mayor is on drugs and should be removed from office immediately for is own good and for the safety of all Angelenos.
Crooks and liars are now working in the Mayor`s office.
Have you heard more b.s.? Freeman says this today, contracting what he said yesterday. Szabo contradicted by Santana today. Carson contradicted by Villaraigosa last week. Council shuts down the puppets. Is this a way to run a City in a crisis? Antonio must be still dreaming………
Just to let you know, DWP money does not go into the General Fund. Most all news articles miss this fact. DWP is completely separate from the City in accounts and pay, etc.
BTW, DWP employees receive much higher pay for the exact same job title as the City Council Controlled Departments, annual raises and cost of living adjustments, and higher retirement benefits. Before the DWP’s last set of raises my coworkers calculated that they receive 25% more pay for the same positions as we hold. In addition, we also have an additional 10% pay cut in the form of furloughs and are now are facing layoffs.
City workers in the Council Controlled Departments are the step children of the DWP, Harbor, and Airport. We are treated far less than the rest. If all continues as it has I may go back to private industry. It does pay better in my field and has perks that City workers never see. The City only offered stability and now that is in jeopardy.
To March 23, 2010 10:55 PM,
You say that “DWP money does not go into the General Fund”
My question to you is what about the “Surplus Funds” transfer from DWP Power and DWP Water to the City. Doesn’t that money go to the General Fund?
If not, where does that $200 million go?
To March 23, 2010 10:55 PM,
You say that “DWP money does not go into the General Fund”
My question to you is what about the “Surplus Funds” transfer from DWP Power and DWP Water to the City. Doesn’t that money go to the General Fund?
If not, where does that $200 million go?
My question to you is what about the “Surplus Funds” transfer from DWP Power and DWP Water to the City. Doesn’t that money go to the General Fund?
I didn’t write the original post but the answer is yes. There’s a 10 percent utility tax on DWP profits and an additional 8% tax on power revenue, all of which goes to the general fund. This makes DWP the most heavily taxed business in the city. It also complicates things because the “best” solution would be to eliminate the power revenue tax to begin with. Then the money could be used for the carbon surcharge and rates would not have to be increased. But the mayor and the council are so bad at budgeting they count on that additional 8% to help fund their projects. So even if it appears that the council is standing up for the people, the issue is heavily politicized.
BTW, DWP employees receive much higher pay for the exact same job title as the City Council Controlled Departments, annual raises and cost of living adjustments, and higher retirement benefits.
What exactly is your job title? What is also rarely mentioned is that for all DWP jobs that are native to the utilities industry, which is the majority of jobs at DWP, pay is industry average in order to not lose workers to private utilities and the surrounding municipal ones. You could argue either way.
THE DWP BOARD IS APPOINTED AND SERVES AT THE PLEASURE OF THE MAYOR AND TAKES DIRECT ORDERS FROM HIM LIKE A BUCK PRIVATE.
This is true, and the same goes for the GM position. This is probably the one underlying problem that causes all other problems.
aren’t absorbing all the dead wood the mayor’s sending them to save their jobs and giving them humongous raises.
Regarding the often mentioned reason for the DWP higher pay differential compared to non-DWP city jobs- to be competitive with other companies.
That might have been the original plan and was possibly valid years ago in much better financial times, but that economic condition has eroded over years while the beneifits and pay raises have risen in a near automatic manner.
The people supposed to be watching this agency have turned into advocates for the union’s wishlist to become reality.
Would we LOSE workers to a major degree if salaries were on par with other city jobs- and those are often considered to be over-paid positions when the factors of job security and retirement plans are bundled in.
The others, the competitors that would take these DWP employees would have to reach a saturation level where no further hires would be expected, other than to replace existing workers.
You see now with city employees now facing layoffs like the private sector already experienced, how just keeping employment is more important than moving up on a pay scale.
No one is getting raises now, except in government, that is, as Assembly Speaker John Perez has shown and rubbed our noses in that fact. It’s ironic that the DWP’s function as an employment lifeboat has taken persons fearing a job loss with a job, essentially termination-proof, and with raises, and huge ones for some, maybe most. The added union membership will raise the IBEW local’s power base with more dues, as well. Don’t forget the 5 years of raises that no one else is getting in private or public sectors, generally.
The current DWP conditions were allowed to reach such levels because of the irresponsibility of politicians who buckled under in contract negotiations to garner favors when election times come around. They traded the city well-being for personal benefit. And why not? It cost them nothing personally in terms of money or accountability. This pattern was masked for a long time because new money was accessible and finance shortages, even that caused by other waste, was not easily detectable, nor was there interest in so doing as long as other money from taxpayers kept rolling in.
The conditions that may have supported this rise of the DWP’s union-based employment environment have ended. It’s not so much that the union is entirely wrong or bad, getting all they can get for membership is the natural order of things in a business setting. But D’Arcy sees it all as a one-way street and no “partnership” for city survival fits into his world. This shows there’s been an arrival of the culture of entitlement for another element of our society.
There should be some serious revisiting of these conditions if responsible government is ever going to be achieved.
Would we LOSE workers to a major degree if salaries were on par with other city jobs- and those are often considered to be over-paid positions when the factors of job security and retirement plans are bundled in.
I think the answer is dependent on the job class. For power engineers though I’d argue yes. There are only a handful of local schools that teach the math models needed to do power engineering: CSULA, Cal Poly, USC, and CSUN. DWP and Edison compete for these graduates. Second, knowledge of the infrastructure as well as professional contacts with other utilities/vendors is invaluable, more so because a lot of employees left last time Freeman was GM. It’s why retirees nowadays are getting away with double dipping. They know that in its current state, the utility needs them to function.
You see now with city employees now facing layoffs like the private sector already experienced, how just keeping employment is more important than moving up on a pay scale.
I’d agree if industries weren’t different. But the utilities industry is generally more stable and while other industries were having freezes or layoffs, companies like Edison were actually hiring.
Don’t forget the 5 years of raises that no one else is getting in private or public sectors, generally.
Once again, I think it’s better to zero in on specific industries before making comparisons. DWP does not compete with the finance sector, it’s not in the consumer electronics business, it’s not a money sink like other public sector departments, it’s a public business that competes with other utilities. With the State mandated RPS as well as emerging technologies like smartgrid, that’s a lot of infrastructure that needs to be rebuilt and a lot of work for those in the industry – not just DWP but every utility in California.
As far as the raises that came from the 5 year contract extension – the council is accountable. They could have let the previous contract expire this year, faced strikes next year, and renegotiated under better terms but they chose to renew it instead. So now the city is stuck with a 5 year contract that cannot be broken unless it declares bankruptcy. And on the political end, D’Arcy would lose most of his leverage if the council knew how to be fiscally responsible. But they don’t.