LOS ANGELES (CN) – A $241.8 million transfer from the Los Angeles Department of Water and Power to a city fund has a watchdog group seeing red, and on Tuesday called the action a theft from LA’s electric utility ratepayers.
Consumer Watchdog president Jamie Court held a press conference in front of Department of Water and Power headquarters in downtown Los Angeles on Tuesday to denounce the transfer of surplus money from the utility to the city. He said there is a distinction between utility ratepayers and taxpayers, and the city should not be allowed to use that money to fill gaps in its budget.
“DWP collected $240 million in depositories from ratepayers that should have gone to ratepayer infrastructure to prevent future rate hikes,” Court said in front of a deposit box on Hope Street, before a DWP Board of Commissioners meeting.
Instead, he said, the $241.8 million is going to fill gaps in the city budget.
The DWP board approved the transfer from its power revenue fund to the city’s reserve fund on Tuesday afternoon at a special meeting in downtown Los Angeles.
The issue should have been brought to the voters to determine if the funding should go to the city, Court said. He called the transfer illegal under Proposition 26, which requires supermajority voter approval of fees, levies and taxes.
According to the DWP board, the resolution was reviewed and approved by the city attorney.
Jack Humphreville, chair of the LADWP Advocacy Committee, said the money could have been better used and not put “on a money train to City Hall.”
“It’s not going into the infrastructure, not going to lower our rates or renewable energy,” Humphreville said. “Rather it’s going to City Hall to basically fund huge increases in pension contributions, salaries and benefits.”
Of the transfer, which the DWP board unanimously approved, DWP Commissioner Christina Noonan said, “This is not the first board that has looked into the transfer tax.”
The $241,848,000 is referred to as a surplus and will be transferred from DWP’s power revenue fund, according to the meeting agenda. The first lump payment of $120 million will be paid to the city within 10 days, and the full amount will be paid by June 30, 2018.
Liza Tucker, consumer advocate with Consumer Watchdog, said, “No one stood for the ratepayers.”
The group said it is considering legal options.
DWP said it would not comment on the transfer due to a class action involving it, the city and several ratepayers.