Los Angeles Department of Water and Power

Neighborhood Council DWP Oversight Committee (OSC)

In an effort to foster citizen participation and increase responsiveness to local needs, LADWP has approved a Memorandum of Understanding (MOU) with certified neighborhood councils. This MOU arose as a consequence of the city charter reforms that established the neighborhood council system, and mandate city agencies to work with neighborhood councils to provide otifications of significant matters or proposed actions by the Board of Water and Power Commission. More information is available at the following web sites:

• The DWP Neighborhood Councils web page
• The web page of the DWP-MOU Oversight Committee

Current Events

LADWP 2007-08 Proposed Revenue Increases & Rate Modernization

DWP is proposing a set of rate increases for the next fiscal year; the DWP NC web page (see link above) describes the DWP's request for NC board resolutions and related information under "Recent Notifications". More DWP information about the rate proposals is available at the LADWP Rates Proposals web page.

The Oversight Committee has reviewed the materials from DWP, and has taken a position that, as presented, the rate increases should not be approved by neighborhood councils. An analysis by an OSC officer was published in a recent CityWatch article. On the basis of the considerations described there, the OSC has prepared a set of recommendations, and is asking neighborhood councils to support these recommendations in board actions prior to the DWP presentation of its proposed actions to the Board of Water and Power Commissioners in early October.

• The OSC does not recommend any Water and Power base rate increases, reliability or deferred maintenance adjustments, surcharges or pass through increases at this time because it has not been given the full 120 day notification as provided in the MOU; further, the OSC recommends that the neighborhood councils support that the 120 day NC review period should begin upon the date of the first Huron presentation, August 18, 2007.
  (Background: The Intra-City Memorandum of Understanding states that DWP will provide notification and supporting documents to the Neighborhood Councils 120 days before the proposed rate action is submitted to the Board [Section 2.10.2 (ii)].)
• The OSC recommends that any transfer to the city be based upon DWP having excess operating funds , and that in no event should DWP bonds be used, directly or indirectly, to enable the city transfer.
  (Background: During the past ten years approximately $2 Billion has been transferred from the DWP to the City’s General Fund. This year the transfer will be approximately $215 Million. DWP’s financial condition is now such that the Department’s proposed bond issuance is, in part, for the purpose of enabling the transfer. This is noted in the July 30, 2007 Huron Consulting Group report. The concept of the transfer is based upon DWP having “excess funds” from operations, not from long-term borrowing.)
• The OSC recommends that the DWP implement a department-wide workforce planning system as elaborated upon in various current and past independent consulting studies.
  (Background: The Barrington-Wellesley Group, Inc., and its successor, the Huron Consulting Group, in several independent studies over a period of years, has criticized the DWP for not having a Department-wide Workforce Planning System. With labor costs approaching $1 Billion per year great savings can be achieved. A mere 10% workforce productivity increase represents $100 Million per year that could be applied to infrastructure improvements.)
• The OSC opposes the department’s policy of paying wages signicantly in excess of prevailing market rates.
  (Background: DWP employee salaries are 15% - 40% above comparable classifications in other City departments; likewise, DWP salaries are 15% - 40% over those for comparable electrical craft positions in other public and private utilities.)
• The OSC recommends that the DWP reduce overtime labor costs to less than 10% as Huron Consulting indicates is common in other utilities.
  (Background: In each of the past two years, overtime has been approximately 19% of base labor costs. The goal of the Department is to reduce these costs to 10% through better management controls and the addition of staff.)
• The OSC recommends the hiring of a Rate Payers’ Advocate, at city expense, to provide advice and counsel in furtherance of the aims of the Intra-City Memorandum of Understanding between Certified Neighborhood Councils and Los Angeles Department of Water and Power.