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Will L.A. Go Bankrupt if Your LADWP Bills Don't Go Up?

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Photo by Port of San Diego via Flickr

Photo by Port of San Diego via Flickr
Mayor Antonio Villaraigosa has warned L.A. City Councilmembers that if the recent LADWP electricity rate hike approved by Water & Power board members last week is denied by them, the city could be facing bankruptcy. “Council rejection of the DWP board’s action [to increase rates] would be the most immediate and direct route to bankruptcy the city could pursue,” said the report he sent, which was obtained by the LA Times.

Many City Councilmembers at today's meeting felt that the rate hike came quickly without much community input--to paraphrase, "it's like have gun being held to our heads," many noted. In fact, the full plan wasn't released until two days before last Thursday's meeting.

When asked by Councilman Tony Cardenas why the rate hike wasn't brought up earlier, LADWP officials said board members were out of town. Angered by that response, Cardenas raised his voice explaining that when the board wants to get business done, it finds a way. He said out-of-town boardmembers can participate in meetings via teleconference if an agenda is posted publicly in their location and likened recent actions to playing games.

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With a variation on the theme, Councilmember Paul Krekorian said "this is exactly the wrong time to rush through a policy." He noted the current economic climate where teachers are being laid off--LAUSD would suffer some $7 million extra on their bills--and residents are struggling to pay bills, rent and mortgage.

The rate hike would raise L.A.'s renewable energy portfolio to 20% by the end of the year. It would also avoid a downgrade in LADWP's bond rating.