With the city\u2019s financial solvency hanging in the balance, the Los Angeles City Council called on Mayor Antonio Villaraigosa on Tuesday to corral his appointees on the board of the city\u2019s public utility and convince them to hand over $73.5 million in \u201csurplus funds\u201d that the city was counting on to balance its books.
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<\/br>In a unanimous vote, council members demanded that the board of the Los Angeles Department of Water and Power \u201chonor their commitment\u201d to transfer the money by mid-April to help counter a $212 million shortfall.
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<\/br>City officials are scrambling for a backup plan a day after the head of the utility, S. David Freeman, told council members in a letter that he was urging the DWP board to withhold the money because the agency has no surplus.
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<\/br>His recommendation followed a dramatic standoff last week between the council and the DWP over planned electricity rate hikes that officials at the utility, along with outside consultants, said were critical to cover rising coal costs and renewable-energy contracts. Initially, Villaraigosa had pushed for rate hikes that would have ranged from 9% to 28%.
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<\/br>Public outcry led council members to reject rate increases of that magnitude. They approved a more modest rate hike of 4.5% last week to help ensure the fiscal strength of the utility. But instead of agreeing\u00a0 to the council\u2019s more modest action last Wednesday, Villaraigosa\u2019s appointees on the DWP board voted for a 5.7% increase over three months, which was rejected late that night by the council.
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<\/br>During a testy exchange with council members Tuesday, Freeman said the failure to green-light an electricity rate increase had \u201cdecimated our financial future.\u201d On Monday, one of the nation\u2019s top bond rating agencies withdrew a \u201cAA-" rating on two DWP bonds worth $720 million.
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Freeman said he understood that city officials need every \u201cnickel that you can get,\u201d but added that the utility’s board \u201chas a responsibility for DWP not to get in a situation where we can\u2019t borrow money and our bond rating goes down, down, down.
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<\/br>\u201cI think there is unanimity that we need a sizable increase to pay our bills and that hasn\u2019t happened,\u201d Freeman said. \u201cSo I don\u2019t see how you can expect the department to declare a surplus when we have a deficit on our hands.\u201d
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<\/br>Council members, however, said the agency\u2019s reversal on this year\u2019s transfer from the utility\u2019s Power Revenue Fund did not make sense. Several noted that when DWP officials promised the $73.5 million transfer as recently as March 1 — as part of a total transfer of $220 million this year — they never linked that move to a rate increase, which would have provided a modest amount of additional revenue.
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<\/br>Members asked the mayor to work with the DWP board to find $73.5 million from within the utility\u2019s $1 billion in cash assets.
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<\/br>\u201cThe people of Los Angeles and the ratepayers deserve better, they deserve more honest analysis and they deserve this being depoliticized,\u201d Council President Eric Garcetti said. \u201c…Something fishy is going on here.\u201d
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<\/br>— Maeve Reston at Los Angeles City Hall<\/p>\n","protected":false},"excerpt":{"rendered":"
With the city\u2019s financial solvency hanging in the balance, the Los Angeles City Council called on Mayor Antonio Villaraigosa on Tuesday to corral his appointees on the board of the city\u2019s public utility and convince them to hand over $73.5 million in \u201csurplus funds\u201d that the city was counting on to balance its books.In a […]<\/p>\n","protected":false},"author":4678,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-518647","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/518647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4678"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=518647"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/518647\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=518647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=518647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=518647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}