LADWP is 'Holding the City Taxpayers Hostage' Over Revenue Transfer
Detail of LADWP's downtown headquarters | Photo by Huro Kitty via LAist Featured Photos on Flickr
Leaders of the Los Angeles City Council today requested that the head of the Department of Water and Power recommend fulfilling a budgeted money transfer, which would save the city from bankruptcy on May 5th. Citing $1 billion in reserves, a letter to David Freeman said there was no need to withhold a transfer of $73.5 million. Freeman said the utility doesn't have sufficient funds to warrant a transfer without jeopardizing its bond rating.
"With regard to the Department's bond ratings, it seems that the Department is holding the City taxpayers hostage in asserting that fulfilling our commitment to the city will assuredly result in a bond rating downgrade," said the letter, which was signed by Council President Eric Garcetti and Councilmembers Jan Perry, Dennis Zine and Bernard Parks.
The letter continued to lay out the Council's perspective on why they wouldn't approve a rate hike sought under the carbon surcharge plan, which would have raised rates up to 28% for customers. "The fact that an increase by April 1 was not achieved is not due to the unwillingness of the Council to support the Department, it was the result of the last-minute rate restructuring proposal that, as PA Consulting clearly stated, was very different from their recommendations, insufficient time for community stakeholders to voice their views on the proposed increases, and the unwillingness of the Board to accept the proposal presented to it by the Council."
The letter said the Board has the option to raise rates by .1-cents per kWh hour and also accept the council's recommendation of a lower rate hike, but hasn't chosen to do so. "It is inaccurate and irresponsible to lay at the feet of the Council... the blame for uncertainties in the financial markets about the future of the Department," the letter read.