Council Members Link OK of DWP Rate Hikes to Expense Cuts : City Hall: The department seeks an 11% boost in water rates and 7% for electricity. It is challenged to make trims equal to those suffered by other agencies.

Several Los Angeles City Council members called Wednesday for hefty cuts in Department of Water and Power expenses and personnel before they will approve proposed water and electric rate hikes.

On the eve of public hearings on a DWP proposal to boost water rates by 11% and electric rates by 7%, City Councilwoman Joy Picus and others challenged the DWP to make across-the-board budget cuts equal to those suffered by other city departments in the past year.

“Don’t ask me to vote for a rate increase when they can make these kinds of changes,” said Picus, pointing out that most city department were forced to cut their budgets by 6% to 10%.

DWP management will make its case for the rate increase today at a public hearing before the agency’s Board of Commissioners. If approved by the board, the proposal would be sent to the City Council for concurrence or rejection. If it is adopted, DWP officials plan to put the new rates into effect in December.

DWP Commission President Mike Gage acknowledged that City Council opposition will be stiff this year. “Any time you seek a rate increase it’s difficult,” said Gage. He said, however, that the city may have little choice in the matter.

“I’ve seen some of this stuff (financial data) already and it scares me,” said Gage. “We are in a pretty serious dilemma.”

The agency is faced with tighter water resources and federal demands for improved water quality while its revenues are shrinking because of reduced sales under a conservation program that has cut usage by 30%.

DWP officials said Wednesday that if conservation continues at 30% until the end of the year, the DWP’s water system budget will face a $70-million shortage.

In addition, officials said, both the water and power arms of the agency have to keep up with inflation. The last water rate increase was a 6% hike in 1990 and the last power rate increase was 4% in 1988.

Under the proposal, the average residential energy bill would increase to $43.60 a month from $40.70 monthly, according to the DWP.

The average household water bill, about $25 a month, may not rise despite the proposed increase, officials said.

Councilwoman Joan Milke Flores, whose Commerce, Energy and Natural Resources Committee will consider any rate proposal, said that most DWP customers who continue to conserve water would not necessarily face higher bills.

With continued conservation, the DWP would buy less water from the Metropolitan Water District and special “purchased water assessments” included in most bills would fall, officials said.

“Even with an 11% increase,” she said, “with a reduction in the amount of water we’re buying from Met, the consumers’ costs and therefore the amount of their bills will go down. If they use more water, of course, their bills will go up.”

Still, council members say they will press the agency to keep a lid on costs.

“I have said from the very beginning that the DWP should make the same kind of cuts in the budget as we’re making in City Hall,” said Councilman Zev Yaroslavsky. “I don’t believe they’ve made any such effort. . . . We asked them to make some cuts and they came back with a flimflam.”

“They really have to prove it to me hard and fast,” said Councilman Hal Bernson, who has voted against all but one DWP rate request in the past 12 years.

DWP officials said Wednesday they implemented hiring freezes in all departments as of July 15. Gage said a budget cut would require layoffs, “which no other city department has been asked to do.” DWP officials said total agency employment has dropped by 5% over the past 15 years while the amount of water and power supplied both increased by 50%.

Picus and Councilman Ernani Bernardi complained that the DWP pays much higher salaries than other city departments for similar positions.

According to Picus, a DWP typewriter repairer earns $37,604 annually, while the same position at other city agencies pays $27,498. Similarly, a DWP garage attendant earns $35,057, while the same position at other city departments pays $25,724; the DWP pays a head custodian $39,045, while other city departments pay $28,710.

Norm Buehring, assistant general manager of the DWP, said he could not explain why there was such an apparent gap in salaries, but he pointed out that for the past 14 years all labor salary negotiations for the DWP have been carried out by the city administrative office. He added that the job classifications may sound similar, but actual duties and requirements could vary widely.