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LA WATCHDOG - This year, Department of Water and Power Ratepayers are projected to contribute over $700 million to the City’s General Fund, or about 9% of its revenue. The two sources of cash are the 10% Utility Users Tax and the DWP Power Revenue Transfer Tax.
The 10% Utility Users Tax is expected to generate $482 million and is disclosed on our bimonthly bill. On the other hand, the Transfer Tax of $227 million is not transparent because it is buried in the rates. Furthermore, this controversial tax has been subject to significant class action litigation, resulting in this tax decreasing from its original 8% to 4.5% of Power System revenues.
While the Utility Users Tax is legitimate and the Transfer Tax controversial because it was never approved by the voters, there are two other Ratepayers rip-offs that do not pass the smell test.
In July, the politically appointed Board of Water and Power Commissioners approved the $298 million Stormwater Capture Parks Program. This is an elaborate scheme to divert Ratepayer money to the defunded Department of Recreation and Parks to refurbish seven parks in the Valley. However, according to the Ratepayer Advocate, this program “is not cost effective as a water source of supply, and as such would have an unreasonable rate impact on DWP customers.”
In a March of 2024 report, the Ratepayer Advocate indicated that the City owed DWP almost $130 million for past due water and power bills, of which $91 million was over 120 days past due. This indicates that the City is squeezed for cash to pay for its budget busting labor agreements and its gross mismanagement of City’s budget. And more than likely, the City is not paying the Late Payment Charge, amounting to an annual rate of 18%, compounded daily, unlike ordinary Angelenos.
There is a simple solution. Mayor Karen Bass, Budget and Finance Chair Katy Yaroslavsky, and Energy and Environment Chair Adrin Nazarian need to order the City to pay its DWP bill in full within 30 days along with the Late Payment Charges, repeal the approval of Stormwater Capture Parks Program by the politically appointed Board of Commissioners, and place the Transfer Tax on the ballot so Angelenos can either approve or reject this tax.
Ratepayers may be the City’s cash cow, but we are not the City’s ATM.
[Note: At the same time, the Department is considering quadrupling our water and power rates over the next decade as it pushes ahead with its plan for the utility to be powered by 100% Renewable Energy by 2035 and to develop its $20 billion Pure Water LA Hyperion facility to recycle wastewater into drinking water.]
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He can be reached at: [email protected].)
