[ilbegone]

Mayor threatens broad city shutdown

By Rick Orlov Staff Writer

04/06/2010

Escalating his dispute with the City Council, Mayor Antonio Villaraigosa said Tuesday he is preparing to shut down large parts of city government for two days a week starting Monday because of the city's budget crisis.

The shutdown will focus on departments not involved in emergency response or revenue generation. That is likely to include libraries, parks, city clerk, planning and public works, among others. Those staying open would include police, fire and sanitation.

The mayor's announcement came a day after the Department of Water and Power refused to make a $73.5 million transfer to the city's general fund because the City Council had rejected a rate hike for the utility.

City Controller Wendy Greuel warned Monday that the city is likely to run out of cash by May 5 without the transfer.

Villaraigosa blamed the shutdown on the City Council and lashed out at council members for engaging in what he called "The politics of no."

"I do not have the luxury of being in a debating society," Villaraigosa said. "I can't stand up and be a demagogue. I have to run this city.

"The politics of no is no more sustainable than the DWP's reliance on coal. Instead of acting in the tradition of past city councils, where progressives put partisanship aside and positioned Los Angeles as a national leader, this council leadership has demonstrated what we've already seen at the national level ... they have shown the results of the politics of no."

City Council members said Villaraigosa's new tactic would not help resolve the issue and they would not support the shutdown, no matter how limited.

"Who's playing chicken with this now?" asked Councilman Bernard Parks, chairman of the Budget and Finance committee. "The real issue is the public will lose in this. The public always loses when services are cut."

The City Council passed a resolution Tuesday asking the DWP to transfer the funds, but does not have the authority to force the utility to act.

City Council members peppered DWP interim general manager S. David Freeman with questions over the utility's financial situation. They noted that at an earlier point Freeman had said the city could receive a $93 million transfer - $20 million more than initially promised - if the higher rate increase was approved.

"Mr. Freeman, your logic is inconsistent," Parks said at one point. "How can us approving a $40 million increase for you mean you would give us $93 million?"

Without the rate increase, Freeman said, the utility faces the prospect of a reduced bond rating.

"We can't transfer money we don't have," Freeman said.

Villaraigosa said he has asked the City Administrative Office to prepare the shutdown plans for April 12.

The Coalition of L.A. City Unions, which represents most city employees, blasted the mayor's proposal, saying city employees and residents were "about to become collateral damage" in a battle between the city and the DWP.

"This is playing brinkmanship and city residents will pay the price," the union said in a written statement. "This is not a game. It shouldn't be treated as a game.

Villaraigosa also said he would call a meeting of the Executive Employee Relations Commission - on which he sits with City Council members - to discuss the plan.

The DWP announced on Monday it would not be able to make the $73.6 million transfer, its final payment out of a promised $220 million this year, because of the council's refusal to increase the Energy Cost Adjustment Factor charged residents. The utility wanted to see it increased by 0.8 cents per kilowatt hour in April and increasing over the next year by a total of 2.7 cents per kwh. The series of increases would have boosted some customers' bills by up to 28 percent.

The council had authorized a 0.6 cent increase, which the Board of Water and Power Commission rejected and suggested a 0.7 cent increase. That was rejected by the City Council, meaning no increase can take effect before July 1.

Parks said when city officials budgeted the $220 million last year, there was no mention from DWP at the time that it was contingent on a rate increase.

Parks and Councilwoman Jan Perry pointed out the amount of money being discussed was 0.2 of one percent of the DWP's overall budget and the agency has nearly $1 billion in reserves that it could use to make the promised payment to the city.

Freeman, who is being replaced next week as interim general manager of the DWP, said there was always an assumption the department would receive some kind of increase.

Assistant DWP General Manager Raman Raj said his staff is preparing an alternative proposal for the commission to consider in coming weeks with a goal of having something in place by July 1.

One area expected to be reviewed is changing all the factors that go into the Energy Cost Adjustment Factor so that it would be limited solely to the cost of purchasing fuel to general electricity. It currently includes funds for renewable energy and energy efficiency programs.

Villaraigosa said he also wants to remove a cap on the fund, and have it fluctuate based on the actual costs of fuel.

Perry said she also plans to begin conducting public hearings on a consultant's report to develop a plan acceptable to the City Council.

DWP Board Chairman Lee Kanon Alpert said he and the other commissioners had been sincere and thoughtful when they pushed for a higher increase last week than the council had approved.

"We did what we felt we had to do and what was in the best interests for this department and the city," Alpert said. "I hope, in the future, we are able to reach some kind of agreement with our elected officials."