DWP transfers $73.5 million to L.A. budget, ending bitter dispute

The Los Angeles Department of Water and Power board voted Tuesday to transfer $73.5 million to the city’s budget, ending a dispute that infuriated the City Council and undermined the city’s credit rating.

The DWP commission, whose members are picked by Mayor Antonio Villaraigosa, agreed unanimously to provide the money. But in a separate meeting, council members showed that they were still not ready to close the door on the issues behind the political firestorm that erupted last month.

Councilwoman Jan Perry asked DWP interim general manager Austin Beutner on Tuesday to explain who directed the DWP to withhold the transfer after council members initially refused to approve a hike in electricity rates sought by the agency. Days after that threat was made, a Wall Street rating firm downgraded the city’s general obligation debt.

“I didn’t work in the department then,” Beutner told Perry. “You’ll have to ask them. Or you’ll have to ask someone who was involved.”

Beutner spent nearly 90 minutes answering questions from the council as part of his effort to mend fences and provide more “transparency” at the DWP. Still, Perry said she was perplexed by his answer, since Beutner has spent the last four months as first deputy mayor. In that job, he has had authority over the DWP and other city agencies.

Although he worked for Villaraigosa during that dispute, Beutner told The Times that he did not handle the issue of the DWP money transfer or its relationship to the rate hike. “I was focused elsewhere, and the mayor relied on other advisors,” said Beutner, who is the city’s jobs czar.

Matt Szabo, Villaraigosa’s deputy chief of staff, said Tuesday that the mayor did not direct the DWP to withhold the transfer. After a lengthy standoff, the council ultimately voted for a 4.8% rate hike, less than utility executives sought.

Beutner, a former investment banker, took the DWP job April 19 but will continue as first deputy mayor, overseeing various city departments.

In two separate appearances this week, Beutner told council members that he wants to move beyond the recent rate skirmish, which he described as a “cacophony of noise.” Councilman Bernard C. Parks, who characterized the DWP’s recent threat as “blackmail,” had a different view.

Parks said he and his colleagues should be wary of trusting the DWP to follow through on its next transfer. Villaraigosa’s proposed budget calls for the utility to provide $257 million in the fiscal year that starts July 1.

“I don’t think we can change the future if we don’t keep in mind how we got here,” Parks said.

david.zahniser@latimes.com