L.A. council approves 4.5% electricity rate increase


The Los Angeles City Council and Mayor Antonio Villaraigosa reached a breakthrough Wednesday in their standoff over electrical rates, with the council narrowly sending another proposed increase back to the Department of Water and Power for a vote.

On an 8-5 vote, the council approved a 4.5% rate increase -- the same amount that it backed two weeks ago, only to be rebuffed by the mayor’s appointees on the DWP board.

Council members said they were hopeful that the plan would be embraced by the utility this time around, ending the impasse and freeing up the DWP to make a long-promised $73.5-million transfer to help ease the city’s cash-strapped budget. If approved, the increase would go into effect July 1 and last for three months.

“I’m guardedly optimistic that this is a done deal,” said Councilman Herb Wesson, who shuttled between the mayor and the council in the attempt to broker an agreement.

Villaraigosa, who protested in recent days that he did not have the power to force his appointees on the DWP commission to make certain decisions, said in a statement that he would urge the panel to adopt the council’s plan.

He called the proposal, which allows for an increase of 0.6 cents per kilowatt hour, a “reasonable compromise” that protects the utility’s finances and its commitment to renewable energy.

The DWP board will meet Thursday night to consider the plan. A vote in favor could end a City Hall dispute that had become unusually toxic, with council members calling the DWP untrustworthy and the mayor comparing council members to Republicans who fought a national healthcare bill.

Villaraigosa originally proposed an increase of 0.8 cents per kilowatt hour, the first of four that he had sought to pay for renewable power, conservation programs and the fluctuating price of fossil fuels. The council opted for 0.6 cents, limiting that increase to three months.

The DWP board rejected that idea, choosing an increase of 0.7 cents per kilowatt hour -- a 5.7% increase. After the council killed that plan, DWP officials reneged on a promise to provide $73.5 million, damaging the city’s credit rating and increasing the size of the city’s budget shortfall to $222.4 million.

“They took the public’s yearly dividend and held it hostage to their own parochial interests,” said council President Eric Garcetti.

The protracted fight damaged Villaraigosa, who at one point said that without the transfer, he might have to furlough some workers two days per week.

He dropped that threat two days later, saying the city had received more property tax revenue than it expected. Had Villaraigosa accepted the council’s proposed rate increase two weeks ago, he could have declared victory, said Councilman Paul Koretz.

The struggle also undermined Garcetti, with a few on the council and within the mayor’s office questioning whether he should retain his grip on the presidency. Wesson, viewed for years as a possible challenger for the seat, did not publicly criticize Garcetti.

Still, Wesson talked up his own diplomatic efforts, saying he had met almost daily with the mayor, smoking cigars with him at the mayor’s mansion during one moment in the dispute.

He also praised Villaraigosa, saying he had put the city’s needs over his own by backing down from his previous request for more money to pay for renewable power initiatives.

“The critical thing is that, as we move forward with all of the other issues, the mayor and the council need to be on the same page whenever we can,” Wesson said.

Five council members refused to support the increase. Councilman Tom LaBonge, who voted against the increase, said earlier this week that he had received roughly 400 e-mails opposing any increase. The other no votes were cast by Paul Krekorian, Bernard C. Parks, Jan Perry and Dennis Zine.

Garcetti said he hoped the DWP would “clean up its act” and saw no need to “read any political tea leaves.”

Villaraigosa’s office, in turn, said it was pleased that the council’s proposal left open the possibility of another rate increase Oct. 1 since it calls for the DWP board to send the council a report on the topic at some point in September.

The vote on the rate hike nearly overshadowed the council’s other decision on the budget: rejecting plans for a hiring freeze at the Los Angeles Police Department over the next three months.

The council agreed to allow the hiring of 90 officers, doing so shortly after city officials said they are moving ahead with plans for laying off 383 civilian workers July 1.

Those layoffs would include at least 100 workers in the Library Department and Department of Recreation and Parks.

“I never thought I would be in a position where we’re choosing between libraries and parks staying open, and a well-staffed Police Department,” said Councilwoman Janice Hahn, who favored the continued hiring of police.

Council members said they did not want to back away from a commitment made last year to keep the LAPD at 9,963 officers, a figure that allows the department to hire enough to replace those who resign or retire.

If “we renege on that 9,963, we’re jeopardizing the people of Los Angeles and we’re putting a knife in the back of the chief of police,” said Zine, a reserve officer.

Parks, who heads the council’s Budget and Finance Committee, argued that the city no longer has enough money to press ahead with its LAPD expansion plans.

With the hiring moving ahead, he told his colleagues that he no longer wants to hear them tell distraught workers that they are trying to save their jobs.

“Don’t tell them you’re fighting for their jobs and the next day vote to hire police officers,” he said.