An annual transfer of hundreds of millions of dollars from the Los Angeles Department of Water and Power to the city’s general fund was unanimously approved Tuesday by the City Council.
Although the payment transfer has caused controversy, lawsuits and threats of future lawsuits, the item was approved without discussion, as it also was when the Energy, Climate Change and Environmental Justice Committee approved it last week.
The Los Angeles Board of Water and Power Commissioners also approved the item with little discussion last month.
The city has a longstanding policy of transferring 8 percent of the LADWP’s revenue to the general fund to help balance the city’s budget. The payment has routinely been around $250 million or more for years, but critics have argued that it amounts to an illegal tax, and recent lawsuits that are close to being settled have resulted in a reduced payment.
This year’s approved payment of $241.8 million reflects the proposed settlement agreement level, which is down about $25 million from last year.
Consumer Watchdog and other critics argue the annual transfer is a violation of Proposition 26, a 2010 state ballot measure that says charges for government services must be linked to the cost of providing the service.
“This money amounts to theft from ratepayers. These dollars should go to fixing the DWP failing infrastructure or be rebated to ratepayers,” Consumer Watchdog president Jamie Court said in November.
An LADWP spokeswoman previously declined to comment on the transfer and the accusation from Consumer Watchdog that it violates Prop. 26. Assistant City Attorney Joseph Brajevich told the LADWP commission at its meeting that the payment was legal but offered no further explanation and was not asked to do so by any commissioners.
The city’s proposed settlement of the lawsuits would reduce the annual payment by capping the 8 percent taken from the LADWP fund from rates determined by an ordinance approved in 2008, which is a lower rate than a measure approved in 2016.
A Consumer Watchdog representative previously said the law should still bar future takings from ratepayers without a vote of the public and that it is considering its legal options.
–City News Service