Op-Ed by David Fleming, Founder of the Los Angeles County Business Federation
Published by LA Daily News Thursday, August 13th, 2015
Is it not unreasonable to assume that hundred-year-old underground water mains might eventually break?
That assumption has apparently eluded present and past city leaders whom, for years, have failed to reserve needed funds for the repairs and replacement of the Department of Water and Power’s infrastructure. The DWP is the largest government-owned water and power utility in America.
Every year the city takes 8 percent of DWP’s gross revenues as well as a 10 percent tax on DWP power bills, all to the tune of hundreds of millions of dollars which go into the city’s general fund.
L.A.’s underground water line system is 7,200 miles long. That’s the distance from L.A. to New York to Miami and back to L.A. Most of those main waterlines are at least 70 years old, some as old as 100 years.
Hardly a week goes by without a main line rupturing somewhere in L.A., wasting millions of gallons of precious water during this horrendous drought and incurring millions of dollars of damage to structures and vehicles. L.A. has lately become a city of brown lawns with wet streets.
Successful businesses in the private sector routinely set aside reserves each year to repair and replace aging infrastructure. Elected city leaders should begin to manage DWP for what it truly is — a major utility business and not just a piggy bank for city revenues.
The city can no longer ignore the ravages of time and use. Time has come when much of DWP’s aging infrastructure must be replaced and cleaner sources of power must be developed to repair and replace main water lines, clean up ground water contamination (much of it under the San Fernando Valley) and meet state power generation mandates to reduce greenhouse gas emissions.
Raising DWP rates, meanwhile, has become a convenient way of raising taxes without requiring voter approval.
It is true that DWP rates have so far been historically low as compared to other utilities. The increases DWP is seeking will average $4.75 per month for average residential customers. High-use customers will see an average increase of up to 17.64 per month. Over the next five years those rate increases will total $1.1 billion.
But if DWP rate payers will have to dig deeper in their pockets, they should be assured that every penny of those new revenues will be used solely for which the additional rates are being charged.
The city should cap the money it currently takes from the DWP each year. No part of these new revenues should be siphoned off into the city’s general fund.
David Fleming is an attorney, former chair of the Los Angeles Area Chamber of Commerce, Valley Industry and Commerce Association, founder of the Los Angeles County Business Federation (BizFed) and a former board member of the Southern California Metropolitan Water District.
