Secessionists Favored on Utility Bills

A panel setting terms for San Fernando Valley secession recommended Monday that a new city be given all physical assets within its boundaries and pay utility rates no higher than those in the remainder of Los Angeles.

A subcommittee of the Local Agency Formation Commission said police stations, parks and other municipal properties in the Valley, including Van Nuys Airport, should be transferred to a new city at no cost. As part of the transfer, a Valley city would have to assume its share of liabilities on the assets, such as outstanding bond debt.

The subcommittee also said that Los Angeles should continue to provide water and power service under a contract with the new Valley city, and that it should treat Valley customers on an equal footing with those remaining in Los Angeles.

“It’s only fair,” said Los Angeles County Supervisor Zev Yaroslavsky, who chairs the subcommittee on terms and conditions.

“The whole thinking here is the people of the San Fernando Valley have helped pay for this infrastructure,” he said.

The recommendations would remove major stumbling blocks to a public vote on Valley cityhood.

“We are very pleased,” said Valley VOTE President Jeff Brain. “The Valley got its share of assets and got protection on utility rates.”

In one of the most contentious issues to emerge from the hard-fought battle over secession, city officials had threatened to charge higher water and power rates to customers of a new city in the Valley.

Yaroslavsky said the subcommittee decided not to try to divide the Los Angeles Department of Water and Power, because it is working well. The group recommended instead that it contract to serve a new Valley city.

“We think the city should not punish the Valley by charging usurious rates,” Yaroslavsky said.

Tim McOsker, chief of staff to Mayor James K. Hahn, questioned whether the agency has authority to cap utility rates. The city attorney’s office has said it doesn’t, but the county counsel’s office said it does.

The recommendations go to the full Local Agency Formation Commission for a vote on whether a secession ballot measure should include the terms and conditions in a cityhood ballot measure.

The subcommittee recommended that if voters approve a new Valley city, all the physical assets, as well as its share of liabilities and cash, be transferred to the new municipality when it begins operation on Jan. 1, 2003.

Valley secessionists and Los Angeles officials still have to work out a vehicle for guaranteeing payment of liabilities.

Deputy Mayor Felipe Fuentes supported transfer of police and fire stations and other assets as long as the breakup does not financially harm the rest of Los Angeles.

But McOsker and other city officials argued against transferring Van Nuys Airport because they said it is an integral part of the city airports system, which also includes Los Angeles International Airport.

Yaroslavsky was not moved.

“Van Nuys Airport is a money loser for Los Angeles, so I don’t know why the city is fighting so hard to keep it,” Yaroslavsky said.

He also said that as the general aviation airfield has a major impact on the environment and economy of the Valley, it should be under the Valley city’s control, if the Federal Aviation Administration approves the transfer.