POWERFUL COMMENTARY on DWP Rate Increase Proposed by Villaraigosa (Aka: Collateral Damage)

Another 14% Metro Water Department (MWD) Increase On Top Of DWP Rate Increase...(What Is The City Thinking?)

Adding Injury to Insult: The Real Impact of the DWP Rate Increases

By Albert Abrams
Chairman

Government Action Committee
Tarzana Neighborhood Council

The timing of the proposed dramatic increases in DWP water and power rates couldn’t be worse.

Raising water and power rates right now, when so many Los Angelenos are financially hurting, will undoubtedly increase the rate of home foreclosures, loan defaults and business shut-downs, making the City economically vulnerable.

However, more injury is coming.

On top of the proposed increases in DWP water rates, the MWD, the main source of water for Los Angeles, has just announced that it will have to pass an additional 14% increase on to water consumers in Southern California. This on top of the DWP rate increases.

In addition, just one month after voters passed the controversial Prop. S phone tax, the City of L.A. is considering a plan to increase monthly trash fees again. According to officials, the additional funds are to pay for an ambitious plan to expand the LAPD. The City is proposing to raise the fee to $38 per month. Trash fees have increased from $11 to $26 over the past two years.

The cascading effect of all these dramatically higher tax and rate increases on Los Angeles households and businesses at once, when so many residents are at an economic tipping point, will backfire on the City. And once enacted, these new, additional taxes and fees will likely never be repealed or lowered.

In any business, before a major restructuring and increase of pricing is released on to consumers, a thorough, in depth financial analysis is done to ascertain what the true impact these higher prices will have on the marketplace.

In the case of DWP, this full review is required and its findings are to be made public. It’s called the City Charter Section 266a Five Year Survey. The problem is that DWP and some public officials, want the new higher rate increases to be immediately imposed on the public before the required survey is completed.

To many members of the DWP OSC, (the Los Angeles Neighborhood Councils/LADWP Memorandum of Understanding Oversight Committee), this resistance by the DWP to wait until the mandated full review is conducted, is an insult to the community that adds to the injury that the higher costs will have on individual water and power ratepayers.

The best policy to follow? DWP should first complete the lawful, required, Section 266a Five Year Survey.

If the numbers do indeed independently show a need for citywide rate increases for water and power, based on real figures, ease these new higher rates and prices into the L.A. local economy in carefully thought-out stages.

This type of phase-in will help our local economy take the shock of these new rates in a calmer, deliberate way, thus reducing the injury, and the insult, to the citizens of Los Angeles.

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