According to the headline story in today's LA Daily News, the DWP deferred planned rate increase requests prior to the 2002 San Fernando Valley secession vote. Reason: one of the city's main arguments against sucession was that massive utility rate hikes would be required, both for the new city and for the rest of Los Angeles. It was felt that announcing that a 33% rate hike was coming anyway might blunt this message.
Los Angeles Department of Water and Power officials knew for years they would need a massive rate hike to finance a $2 billion capital program but kept it secret during the 2002 San Fernando Valley secession effort and misled the City Council during the current water rate debate, the Daily News has learned.Oddly, the LA Times, which opposed secession, has utterly no mention of this story. Posted by Kevin Murphy at April 29, 2004 09:52 AM | TrackBack
Only after an independent analysis demanded by Councilman Tony Cardenas disclosed Tuesday that the utility would need a 33 percent water rate hike over the next five years to pay for the construction work did utility officials acknowledge they had planned for a large increase for years.
By December 2002 -- one month after Valley secession was defeated, in part because of threats that residents would face far higher utility rates -- DWP officials were projecting the need for water rate hikes of up to 35 percent. DWP officials acknowledged Wednesday that they knew massive hikes would be needed throughout the secession campaign.
Cardenas, chairman of the Commerce, Energy & Natural Resources Committee, charged DWP officials, including Gerald Gewe, the assistant general manager for water, with being "disingenuous," and of withholding the truth. He said he'll demand that they answer at a public hearing.