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City Council Wants More Control Over LADWP; Former LADWP President Sues Utility

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Detail of the LADWP Headquarters in downtown L.A. | Photo by Alberto Cueto via LAist Featured Photos on Flickr

Detail of the LADWP Headquarters in downtown L.A. | Photo by Alberto Cueto via LAist Featured Photos on Flickr
Nearly facing bankruptcy over an expected-but-now-withheld payment of $73.5 million dollars, the L.A. City Council today introduced measures that could end up giving them more power over the department. Currently, the General Manager and Board of Commissioners are tapped by the Mayor.

Last week, an LA Times editorial explained why this isn't the best organizational structure: "Because the commissioners and the general manager are equally answerable to the mayor, it's unreasonable to expect the board to object to an initiative that comes from the department or directly from the mayor's office."

The $73.5 million power revenue transfer became the quid-pro-quo item in Mayor Antonio Villaraigosa's carbon surcharge plan, which sought to up L.A.'s renewable energy portfolio to 20% in addition to balancing the utility's financial needs. The Board of Water and Power Commissioners said if the surcharge wasn't approved by the Council, they would withhold $73.5 million of the annual $220 million transfer--already included in the city's budget--to the city's general fund, which pays for basic services like police and streets. On Monday, the utility said it would not transfer the money, meaning the city would be out of money by May 5th.

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That situation has one citizen especially angry. That's former President of the Board of Water and Power Commissioners, Nick Patsaouras, who filed a lawsuit against the utility today.

"This action is a taxpayer lawsuit ... to challenge the legal integrity and propriety of the refusal of the Los Angeles Department of Water (DWP) to honor its commitment to the citizens of the city of Los Angeles and to the Los Angeles City Council to transfer the sum of $73.5 Million to the city's reserve fund from DWP'S total operating revenues ...," the lawsuit states, according to LA Weekly. "At this moment in time, the DWP has approximately $440 Million in cash reserves, plus over $500 million in debt service reserves, amounts which are clearly adequate for DWP to meet its lawful commitments to the city to complete the power revenue transfer Payment of $73.5 Million."

Controller Wendy Greuel, who Patsaouras ran against in the last election, today announced an audit to find the truth behind his accusations, which has been brought up by various others, including city councilmembers ("billions," snarked Councilmember Tony Cardenas at today's meeting).