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L.A. controller launches audit of utility fund at center of city budget crisis

Los Angeles Controller Wendy Greuel on Wednesday announced that her office would audit the Department of Water and Power fund that is now at the center of L.A.’s budget crisis and a growing political conflict between Mayor Antonio Villaraigosa and the City Council.

Utility executives this week took steps to block a promised $73.5 million payment in "surplus" power revenue -– money that comes from ratepayer electric bills -- to the city general fund.
The action was in response to the council's rejection of an electricity rate hike that both the DWP and Villaraigosa said was necessary to cover the fluctuating cost of coal and the mayor’s renewable energy program. Without the increase, DWP executives said the utility cannot afford to make the payment and doing so would endanger the utility’s fiscal health.

Greuel said her “quick-and-dirty" audit would include a review of the utility's books to determine if, in fact, the money can be transferred to the city’s general fund.

Earlier this week, Greuel warned that the city could run out of cash within weeks if the DWP withheld the $73.5 million.
“There’s been a lot of questions and, clearly, the DWP understands there has been a credibility gap with the department," Greuel said. "People have said they have the money... There’s been a lot of political back-and-forth from all sides, and I want to go in and do an independent review."

Greuel said she expects the audit to be completed within a month. Her office also is doing a more in-depth examination of the utility’s renewable energy program, though a completion date on that has not been announced.

Greuel declined to take sides in the political fracas, and would not say whether she supports a rate hike or forcing the DWP to make the $73.5 million payment.

“I deal with the facts," she said.

Villaraigosa suggested Wednesday that he would ask his appointees on the DWP board to transfer at least some money to the struggling general fund.

Appearing on KPCC-FM’s “Airtalk,” Villaraigosa said he would probably not request the full $73.5 million promised by the DWP earlier this year. Instead, the request would likely be in the range of $20 million, he said.

-- Phil Willon at Los Angeles City Hall
Comments () | Archives (27)

'Bout time! Audit away!

City's bill was based on the prior year's services provied by various City Departments - LAPD, LAFD, DOT and et cetera. DWP cannot refuse to pay. DWP is part of City of L.A. not outside of City of L.A.

Yet me get this straight... DWP charges ratepayers for service. DWP collects AN EXCESS from the ratepayers. The city wants that excess for their PET PROJECTS!

That money should be rebated to THE RATEPAYERS! NOT THE CITY to cover their financial mismanagement!

She should make sure she looks at both sets of books.

You Go Girl !!
Nail that Phony bunch at City Hall, and while you're at it,
Kick Tony in the Go-Nads on your way out the door!!

I totally agreed with Wendy Greuel's action. DWP must be audited. How dare they are? How could they threat the City for not giving 73.5 millions to the City's General Fund after council turned down the rate hike request. DWP is part of LA City. they are not separate entity. It is really unfair for civilian employees are sharing sacrifice while DWP employees got salary raise. Since DWP does not considered as a family member of City of Los Angeles, councils should consider rent out DWP to private company. By doing this, City may receive more fixed income and not being threat all the time.

Wendy must be thinking that the DWP utility fund may not be existing. More likely, the DWP utility fund is using rejection of price hike of water & power as an strong arm excuse for not being able transfer funds to the City Hall. As the same time, such price hike would allow DWP a breathing spell to extend time to refill its fund which may have disappeared from mismanagement.
Smart approach, as who knows Wendy may have been tipped off by some insiders of DWP?
Guess, the Enron story may have been one big lesson that we all, including Wendy, must remember. Or who knows the Ponzi scheme of Maddox $65 billion steal is fresh in City Controller's mind.

God I'm so sick of this blackhole general fund and overpaid, selfish, immature DWP!!! Wendy...take the reins girl! Cut through the crap and get to the bottom of all this childish drama. Y'all realize how stupid you are, right? Villar, City Council, DWP??? Get over yourselves! Villar, you failed as a Mayor...get over it and stop pushing your BS green agendas. City Council, grow a spine and curb the city's out of control spending now! DWP...swear to god, your above-it-all sense of entitlement is going to get checked hard and for good. Citizens and rate payers rise up!!! Can you afford another 30% rate increase????

To hell with that! If the DWP promised 73 million, then they should deliver all of it. This whole thing just stinks to high heaven.

Wow, I so appreciate the article today in the LATEXTRA section, page AA1 - Expenses For Pet Projects Upheld.
I sure how the Mayor sees this.....
Isn't it time to change this policy?
And without spending a great deal of time commenting on this,
let me just say - Are you kidding me? Even in good times, this sort of behavior is not right.

What I don't understand is if DWP has a surplus of cash in excess of $73 million that they can "give" to the City, why is a rate hike necessary? Clearly ratepayers have been paying well over what is necessary to fund the DWP at decent profit margins.

Down with DWP! The biggest Gang in L.A. Time to fight back againt these lazy butt DWP! Hmm, and they all got raises this year, OMG!!!

The city is short $300 million. This is nothing but a side show. They cannot raise taxes so they want to raise our power rates instead of cutting spending. The city is broke. It's residents and employers are broke. You cannot raise taxes or utilities rates and not lose more jobs and hurt the residents. It is time to cut the spending.

greuel announced that the audit would be completed in a month, or a year, or a few years. government at its best with our highest paid politicians and dwp czars!

Are they going to shut the city down over a renewable energy program? lol. Just cut spending and waste and lower the utility rates. And stop being a sanctuary city.

Audit what? The have a billion dollar surplus!

FINALLY! A miracle has occurred: Someone in our local government is doing something Businesslike, Practical and Sensible.

It figures it would be Wendy.

It's sad our so-called mayor couldn't be bothered to lay aside the testosterone contest and actually behave like a leader instead of a thwarted little boy.

I'm confused; shouldn't the DWP, and most city departments, have a not-for-profit business model. If they have $75 million in surplus, even after considering the ridiculous salares and pensions and operation/overhead costs, shouldn't we be lowering the electricity rates? The surplus means we are already over-paying, no? I understand, you need a back-up cash fund, but $75 million? And now all the money we paid for over-priced electricity is being sent back to the city, and we have to pay even higher fees?

I'm confused. I guess I'll just keep quiet and keep paying taxes.

She is in the Mayor pockets, and the unions for DWP. It is just another white wash.

Why don't you get rid of the bogus "renewable" energy giveaway. It's just a payoff for some politico anyway. Then look around and figure out which programs are "essential" and do away with the rest. "Bicycle co-ordinator"? Uh, not much of a career future if the "stakeholders" can't afford a BICYCLE. Etc.

If the money was promised whats the deal?

Oh it was promised in a back room deal with Tony Villa to increase rates....

This mayor is right up there with Madoff. he lies about what the money is actually going to and for and from where. Ponzi.

This mayor raids the cities coffers and is in WAY OVER HIS HEAD. He doesn't comprehend the logistics of running this city. He steals from bond measures for education and transit. We were already supposed to have a subway to the sea. And the red line was supposed to go all the way down Lankershim to the Metro-Link.

He claimed this increase for the DWP was for a greener LA. BS. It is cover city services that they have mis-managed. This city pays for illegal aliens to have everything, yet they pay nothing. Working under the table NOT Paying Taxes. Buying Gas and sales tax ain't gonna cut it. Prop 13 is next watch. This guy needs to be re-called....

This show is better than "Desperate Housewife's". The state of California is next-

Cry me a river LADWP users. My SCE bill says "average cost per KWH"
Tier 1 $.12 (tier 1 goes to 294 KWH)
Tier 2 $.14 (tier 2 is another 88KWH)
Tier 3 $.24 (don't know how high this one goes but less than Tier 1)
Tier 4 $.27
Tier 5 $.31

I support Wendy Greuel audit. let's bring DWP dirty laundary out and see how crooked DWP executives are, they are thieves!
they have been raping Angelenos with high salaries ( +150K/yr)and pensions for decades! it's time to kick them all out and give the power back to the citizens.

The Mayor continues digging his hole larger, and he continues to lie.

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