L.A.: Guilty of dysfunction

A RULING against the Department of Water and Power and an adverse decision in a lawsuit challenging the city’s right to tax cellphone service. Long-standing consent decrees that put LAPD behavior under court supervision. And even more recent judicial intervention into the personnel practices of city departments.

Every time Los Angeles is hauled into court, its systemic dysfunctions are revealed. But the courts rarely have solved the institutional failures behind them.

When the courts end up refereeing the messy business of making public policy, Los Angeles usually takes a hit for bending the law, passes the cost on to taxpayers and then neglects to change its habits. In all of L.A.’s recent losing cases, there is something diagnostic of the city — of its reach and its failure to grasp, its deafness beyond the walls of City Hall and the terrible noise inside.

The Department of Water and Power and cellphone cases could mean more than $300 million in budget damage. In the DWP case, the school district and other public agencies contended that, under a state law since repealed, they should not have been charged the rates that other customers pay for electricity but only for their proportional share of the capital costs of building the electricity grid that serves them. The DWP will appeal, but paying back an estimated $223 million in electricity overcharges since 1988 isn’t the real issue. It’s the way the dysfunctional system at City Hall conceals the true cost of government.

Los Angeles needs every dime of DWP revenue, however it is calculated and collected, to cover structural budget deficits. By state law, the city must have a balanced budget. The illusion of balance has been maintained for years by moving revenue from the DWP to the city’s general fund. About $175 million was transferred this fiscal year; an additional $185 million balances the budget adopted for the coming year.

If the DWP broke the law to maintain its revenue, it’s because the city desperately needs the money and because it has become routine to subsidize the municipal budget with the department’s revenue, which includes payments from the school district, the county, community colleges, the University of California and the Metropolitan Transportation Authority. That DWP revenue comes from taxpayers, of course. Ironically, many of them live in the city of Los Angeles. And in their multiple “citizenships” — city, school district, county and so on — lies the hidden tax of paying higher electricity rates.

According to another court ruling, the city apparently acted outside the law when it collected $270 million in taxes from cellphone users. Los Angeles wasn’t alone in extending its power to tax them. Other cities using a similar tax also are seeking a way through the issues raised by the ruling. Its most ominous aspect was the court’s firm suggestion that more litigation would be one way to settle things.

The DWP and cellphone cases reveal the moral ambiguity of City Hall under continual economic stress and the pitfalls of resolving in a courtroom what should be a political issue: how to tax ourselves for the kind of government we want. Instead, Los Angeles worked the loopholes and hoped not to get caught. Just as the city hopes it won’t be caught the next time.

Besides, losing in court hasn’t reformed Los Angeles. Repeated court orders to re-water desiccated Owens Lake, for example, and judgments against the city (the latest in favor of a Fire Department captain who claimed he was punished for making training exercises easier for women) haven’t made the city more responsive or its department heads better managers.

Los Angeles, as sole provider of basic services, really can’t go out of business, no matter how many court battles it loses. It can’t even shed its troubled or unsuccessful departments to concentrate resources on core competencies. That’s why we’ll always have the Los Angeles Police Department and the DWP. And we’ll always have arrogant and bewildered officeholders at City Hall. But are the courts corrective?

How we are to be policed, where we procure our water and how city employees are to be managed are issues of public policy, best determined by political means, not by judges. And how Los Angeles relates to the other public agencies within its borders ought to be transparent to the residents who hold a common “citizenship” in all of them. The shame of intramural litigation is that it calls into question the whole idea of governance. It replaces the possibilities of civic life with the cold finality of a court order.