An effort to change the way the board of directors of the Los Angeles Department of Water and Power is chosen and the addition of a citizen watchdog position recently took another step toward reality.
The City Council voted unanimously Nov. 2 to have City Attorney Carmen Trutanich’s office craft language for a ballot initiative that would give ratepayers a watchdog over the utility board, a plan that some neighborhood council advocates and some city legislators have been clamoring for over the last two years.
“DWP is in need of fundamental reform,” City Council President Eric Garcetti said. “This reform will increase public scrutiny of the DWP budget and the fiscal stability of the city as a whole.”
The ratepayer advocate, which would be part of the newly proposed Office of Accountability, would act as a watchdog for the public with respect to utility rates and would also include an executive director and an inspector general. According to documents from Gerry Miller, the council’s chief legislative analyst, the role of the Office of Accountability would not exist solely for the purpose of lower rates, “but shall be to provide expert advice on rate actions and strategies which most economically accomplish the city’s policy goals and the DWP’s long-term interests.”
In addition, the recommendations include expanding the DWP board from five to seven members and having the council choose at least three of the members. Representatives of the advisory neighborhood councils would also be part of the new board.
Currently, the mayor has sole authority to appoint or remove DWP commissioners,
Interim DWP General Manager Austin Beutner argued against the reform measure, telling the council that he does not see the need for a ballot proposition and urging them to be cautious in crafting such a proposal. Beutner is also a deputy mayor.
City officials were facing a Nov. 3 deadline to decide which possible initiatives they could place on the March 2011 municipal ballot. Out of the plans that had been floated for next year’s slate of proposals, the DWP reform effort was among the most popular, given the level of animosity that has grown between the council and the public utility’s board.
The move to change the way that the board functions as well as install a citizen monitor comes on the heels of a turbulent summer for DWP officials, who argue against any ballot measures altering the dynamic of the board.
In April, the utility claimed that it could not transfer $73.5 million to the city’s coffers unless it was granted a rate increase, claiming the transfer without charging its customers more would jeopardize its solvency. The council refused but eventually agreed to grant DWP a rate increase, albeit smaller than was requested.
DWP’s refusal to transfer millions of dollars into the city’s coffers while Los Angeles was facing a $212 million shortfall played out against the backdrop of the city’s budget crisis and a growing sense of anger among consumers, who were already feeling the effects of a lingering recession.
City Controller Wendy Greuel’s office conducted an audit of DWP on June 9 that contradicted what the utility’s board had told the council.
“It’s hard to look at these numbers and not say that the DWP was trying to extort the City Council into passing its proposed Energy Cost Adjustment Factor increase,” Greuel wrote in her audit report.
On Sept. 7, City Councilman Bill Rosendahl hosted a gathering of residents and neighborhood council leaders in Mar Vista, where he and his colleagues, Garcetti and councilwomen Janice Hahn and Jan Perry, heard exhortations from the audience for a ratepayer advocate.
One local resident who attended was Chuck Ray, a member of the Mar Vista Community Council’s Transportation and Infrastructure Committee who has monitored the DWP and its rate increases for many years. He also attended the Nov. 2 hearing where the council voted to move DWP reform toward a ballot proposition.
“I believe that the council process, as I’m beginning to understand it, will generate a set of changes to the governance of the DWP that will be a quantum leap from where we are now,” Ray told The Argonaut after the council meeting. “I’m gratified that the City Council is listening to the neighborhood councils and planning to have them involved in the oversight of the DWP for the long term.”
Del Rey resident Mark Redick said one of the most important factors in modifying how the DWP functions is realignment of how the public utility’s board of commissioners is chosen.
“I oppose the mayor being the sole arbiter of making the appointments,” he said. “What we need to do is allow the City Council with a two-thirds vote to be able to remove commissioners.”
Ray, a member of DWP’s ratepayer advisory committee, attended a Monday, Nov. 8 City Council committee hearing regarding the DWP reform initiative. He said he came away dismayed with a late recommendation to have Chief Administrative Officer Miguel Santana, Mayor Antonio Villaraigosa’s top budget analyst, in charge of funding the new accountability office instead of budgeting a fixed amount of funds for its operations.
That would rob the office of its independence from the political forces at City Hall, which is precisely what a ratepayer advocate would need to be effective, Ray says.
“An appointee of the mayor is being asked to oversee the DWP’s piggy bank,” he argued. “That doesn’t seem right to me.”
Rosendahl, who has been one of the more outspoken city lawmakers on reforming how the utility’s board is chosen, noted that the important vote is still several days away.
“It’s isn’t clear if we will get it on the ballot,” he cautioned.
He also thinks Ray’s worries might be premature because the council has until Wednesday, Nov. 17 to remove or add provisions to any proposed initiative.
“Chuck is a real treasure, and he has done outstanding working keeping the neighborhood councils informed and bringing some great proposals to the table,” the councilman said. “But I think it might be premature to discuss what might be or might not be on the ballot.”
Ray said the recommendation to have Santana be in charge of funding the new accountability board, which he calls a “poison bill,” would be a deal breaker, not only for him but for other neighborhood councils as well.
“If this goes forward into the final ballot measure I will work very hard to have the neighborhood councils defeat it,” Ray vowed.
The Los Angeles Neighborhood Council Coalition voted unanimously Nov. 6 against putting the CAO in charge of funding the oversight board and in favor of financing the proposed oversight board independently.
According a City Hall source close to the mayor’s office, there have been discussions about a possible veto by Villaraigosa to the council’s recommendations. Villaraigosa’s office did not respond to calls for comment.
Redick, a former Del Rey Neighborhood Council president, said it was crucial to have independent oversight of DWP management, and having change through a ballot initiative is the best way to accomplish that goal.
“It’s time that the DWP be called to account, and we need to have an independent set of eyes overlooking them,” he said. “For far too long, the management of the DWP has been run as a catered affair with no accountability to their actual bosses – the people of Los Angeles.
“We own that utility, and it’s time that they know it.”
At the September meeting in Mar Vista, Garcetti said he had a good feeling about the proposal making the March municipal ballot.
“I’m very confident,” the council president told The Argonaut. “There is an overwhelming, if not unanimous presence on the council to put this on the ballot, and the public is clamoring for this.”
Passage of the reform measure would mandate a change to the city’s charter.
Calls to the DWP for comment were not returned.