Written by on July 08, 2010, 11:45 AM
DWP snubs City Council
Utility a no-show at meeting to discuss audit over rate hikes
By Rick Orlov, Daily News, 7/7/10
Simmering tension between the City Council and the DWP erupted Tuesday after utility officials skipped a hearing scheduled to discuss an audit that accused the agency of lying in order to push through a rate hike.
An angry Councilman Paul Koretz threatened to use the council's subpoena power to compel Austin Beutner, a deputy mayor and the DWP's interim general manager, to appear before the full City Council within the next two weeks.
"I've been watching the city for over 40 years and I don't remember anything like this," said Koretz, who chairs the council's Audits Committee. "We asked them to be here before and they refused.
"They have 10,000 employees. They could have someone here."
Councilmen Bernard Parks and Greig Smith, each of whom has worked for the city for more than 35 years, said they could not recall a department refusing to appear before a committee.
"It just hasn't happened," Smith said.
During the afternoon session, the Audits and Governmental Efficiency Committee had planned to meet jointly with the Energy and Environment Committee to discuss a recent audit of the Department of Water and Power. In her report, Controller Wendy Greuel said the DWP lied when it said it could afford to transfer $73 million to the cash-strapped city only if the council OK'd a controversial hike in electric rates.
After a tense standoff, the DWP made the transfer and the council approved a rate hike that is scheduled to
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take effect in October.
On Tuesday, a deputy city attorney told the council that Beutner is preparing a response to the audit, but that it wasn't completed in time for the hearing.
There were also reports that Beutner sent a letter to the City Council, saying he would not respond until an ongoing internal investigation was done.
Neither Beutner nor DWP officials returned phone calls after the hearing.
Parks, who chairs the Budget and Finance Committee, pressed auditors Tuesday on when the DWP linked the revenue transfer to the rate hike. He said that DWP officials had previously assured him there would be no problem making the transfer.
"There is no question in my mind that they were purposely misleading the council," Parks said. "They had the money to give to the city."
The dispute - played out over several weeks as the council was considering its budget - drew close attention from the financial community and led to a threat to downgrade the city's credit rating if it did not receive the transfer.
In recent weeks, City Administrative Officer Miguel Santana and his team have traveled to New York City to meet with bond investors to assure them of the city's credit worthiness. Last week, the city received notices from the credit rating agencies that the city remains in the highest categories.
Councilwoman Jan Perry, chairwoman of the council's Energy and Environment Committee, said she believes the council will find there was a critical financial impact because of the standoff with the DWP.
"I think, as we dig deeper, we will find the battle over the transfer had a critical financial impact on the city," Perry said. "We will find that it cost us money."
The audit team that conducted the study found no justification for the DWP to withhold the transfer or link it to the rate hike.
In addition to current DWP officials, Parks asked that former interim General Manager David Freeman appear before the City Council, as well as representatives of the Mayor's Office.
Koretz also asked for a report from the City Attorney's Office on whether the actions of DWP officials could rise to the level of criminal activity.
Utility a no-show at meeting to discuss audit over rate hikes
By Rick Orlov, Daily News, 7/7/10
Simmering tension between the City Council and the DWP erupted Tuesday after utility officials skipped a hearing scheduled to discuss an audit that accused the agency of lying in order to push through a rate hike.
An angry Councilman Paul Koretz threatened to use the council's subpoena power to compel Austin Beutner, a deputy mayor and the DWP's interim general manager, to appear before the full City Council within the next two weeks.
"I've been watching the city for over 40 years and I don't remember anything like this," said Koretz, who chairs the council's Audits Committee. "We asked them to be here before and they refused.
"They have 10,000 employees. They could have someone here."
Councilmen Bernard Parks and Greig Smith, each of whom has worked for the city for more than 35 years, said they could not recall a department refusing to appear before a committee.
"It just hasn't happened," Smith said.
During the afternoon session, the Audits and Governmental Efficiency Committee had planned to meet jointly with the Energy and Environment Committee to discuss a recent audit of the Department of Water and Power. In her report, Controller Wendy Greuel said the DWP lied when it said it could afford to transfer $73 million to the cash-strapped city only if the council OK'd a controversial hike in electric rates.
After a tense standoff, the DWP made the transfer and the council approved a rate hike that is scheduled to
Advertisement
Click here to find out more!
take effect in October.
On Tuesday, a deputy city attorney told the council that Beutner is preparing a response to the audit, but that it wasn't completed in time for the hearing.
There were also reports that Beutner sent a letter to the City Council, saying he would not respond until an ongoing internal investigation was done.
Neither Beutner nor DWP officials returned phone calls after the hearing.
Parks, who chairs the Budget and Finance Committee, pressed auditors Tuesday on when the DWP linked the revenue transfer to the rate hike. He said that DWP officials had previously assured him there would be no problem making the transfer.
"There is no question in my mind that they were purposely misleading the council," Parks said. "They had the money to give to the city."
The dispute - played out over several weeks as the council was considering its budget - drew close attention from the financial community and led to a threat to downgrade the city's credit rating if it did not receive the transfer.
In recent weeks, City Administrative Officer Miguel Santana and his team have traveled to New York City to meet with bond investors to assure them of the city's credit worthiness. Last week, the city received notices from the credit rating agencies that the city remains in the highest categories.
Councilwoman Jan Perry, chairwoman of the council's Energy and Environment Committee, said she believes the council will find there was a critical financial impact because of the standoff with the DWP.
"I think, as we dig deeper, we will find the battle over the transfer had a critical financial impact on the city," Perry said. "We will find that it cost us money."
The audit team that conducted the study found no justification for the DWP to withhold the transfer or link it to the rate hike.
In addition to current DWP officials, Parks asked that former interim General Manager David Freeman appear before the City Council, as well as representatives of the Mayor's Office.
Koretz also asked for a report from the City Attorney's Office on whether the actions of DWP officials could rise to the level of criminal activity.
Blog Comments
It's common knowledge all over water starved & saving California, that 'We the taxpayer' and State Citizen are saving water so carefully that revenue is way under planned levels of the water departments - so they want to increase rates because of the good job of careful citizens who respect the cost of water starvation to our Agriculture and to our family needs! Notice, you don't advertise water saving anymore---do you(with taxpayer money)!
Seems like 'Push-me / Pull-me' is having trouble within its own department. It is true here in San Diego; and probably is true for all water departments throughout the state. How each department saves along with family's may not be reconciled...& again/again - the incredibly, wrong retirement programs which have all eggs in one basket named taxpayer, rather than the marketplace where all the rest of 'We the people' take risks!
Ladies and Gentlemen of Union Ilk ---- THE TAXPAYER PIT IS EMPTY! Recognize the problem - you are taxpayer's also! Change from the taxpayer supplies 100% of retirement! It is only common sense not to 'do-in' City, County, State, and Federal governments because the source of money is still the taxpayer!!! To receive taxpayer$$$ to bring Union Retirement benefits back to 100% - cannot happen with a $13 Trillion Deficit for the Federal Government on top of $21 Billion here in California!
Sorry, Union Administrator Charlie...you're too big and expensive and you don't meet any mission statements or sound business practice for "SERVICE to the people". You want "MOR..E!!!???": Earn It! Problem - Intervention - goal - evaluation of outcome - change or eliminate - redefine Problem and do it until you Department or Bureau is spiffy!
Need help? Talk to Insurance Commissioner Poizner!!!! He knows how and has accomplished the entire 'Charlie Tuna' from tip of mouth to tail -- including the water required for Charlie to survive in health!
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