Plans to Raise DWP Rates Will Short-Circuit : With his proposal for generating money to hire more police officers, Mayor Riordan would risk alienating many of the people who now support him.

No doubt there is not a single person in Los Angeles who is not rooting for newly elected Mayor Richard Riordan to succeed in solving the city’s troubles. The obstacles in his path are awesome to contemplate.

Not only has he inherited an office that is largely ceremonial, where the City Council wields greater power than the mayor, but he has made promises to the public that he may not be able to fulfill because there is not enough money in the city treasury.

Among these promises: to provide the city with an additional 3,000 police officers. Previous attempts by the Bradley Administration to accomplish this task were foiled when two successive ballot measures to raise property taxes just for this purpose failed to garner the necessary two-thirds majority.

Now Mayor Riordan is seeking new sources of revenue, and he has focused on two money-making city departments, Airports and Water and Power.

For example, the Airport Commission has quadrupled landing fees, amounting to about $900 per plane. Unfortunately, the commission is dealing with an airline industry that is suffering from money-losing fare wars and bankruptcies.

As a result, the industry is suing the city because landing fees are supposed to be used only for airport improvements.

A recent court ruling has placed the new landing fees in jeopardy, and Mayor Riordan is now looking at the DWP for funds.

He has floated a trial balloon, the idea of raising the electricity rates at the city-owned Department of Water and Power to the same level as the privately owned Southern California Edison Co., which serves users outside Los Angeles.

The idea is to siphon off the difference for the city treasury.

He has also made an alternate proposal for the DWP to reduce its managerial staff and to transfer the salary savings to the treasury.

Historically, the public has benefited from DWP rates that are one-third lower than Edison’s rates, although this difference has recently narrowed to 20%.

What is ironic about Riordan’s proposals is that the DWP already transfers 5% of its annual gross revenues to the city general fund, and this has led critics to demand that this money be used to reduce utility rates instead of raising them. This year the DWP will contribute the hefty sum of $105 million, enough to support a multitude of city services.

A clause in the City Charter allows such payments under the guise of transferring “surplus funds,” when in fact there is seldom a surplus.

The clause was enacted in 1925 for the purpose of blunting criticism that publicly owned utilities did not compete fairly because they were not taxed. This allows the DWP to pay an “in-lieu” tax to the city as if it were a privately owned utility, and still boast about lower rates.

Although Mayor Riordan is a wealthy entrepreneur who has expressed little sympathy for publicly operated enterprises, it is hard to believe that he will continue to pursue these ideas after he does some homework.

With the exception of the surplus funds loophole, the City Charter prohibits the use of DWP funds for any purpose other than the operation of the utility and the payment of principal and interest on outstanding revenue bonds. Any change would have to go to the voters for approval.

If Riordan were to pursue this matter, he would no doubt rekindle the long-dormant public versus private power controversy, and risk alienating many people who now support him. This is a headache he can least afford at this time.

Of equal importance, the public is already burdened with massive bimonthly water and power bills that contain a multitude of fees and taxes. In some cases these bills exceed mortgage payments.

San Fernando Valley residents in particular are currently in an uproar over a new two-tier summer water rate structure that almost doubles the rate for homeowners who exceed a median allocation of water. The unpopular rate structure is an example of political tinkering to achieve a social goal, in this case enforced conservation.

If Riordan tries the same tactics by artificially raising electric rates by 20% to equal Edison’s rates, the public would probably run him out of town. This would be in addition to a 4.75% increase the DWP is currently requesting.

The public recognizes the need for additional police. However, singling out one segment of the populace to pay the bill, whether it be property owners or electric users, is the wrong route to go.

The police serve everyone, so it behooves Mayor Riordan to come up with a method by which everyone shares the burden equally.

One suggestion would be to make small, across-the-board increases in all city taxes and fees so the pain is no more than a pinprick on the general populace.