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LOS ANGELES (CNS) - A controversial annual transfer of hundreds of millions of dollars from the Los Angeles Department of Water and Power's fund to the city's general fund is set to be voted on today by the agency's governing board.
The city has a longstanding policy of transferring 8 percent of the LADWP's revenue to the city's general fund to help balance the city's budget. The payment has routinely been around $250 million for years, but critics have argued that it amounts to an illegal tax.
The city has been close to settling several lawsuits over the annual payment, which would allow it to continue but at a reduced rate, and this year's payment of $241,848,000 reflects the proposed settlement agreement level, which is down about $25 million from last year. The Los Angeles Board of Water and Power Commissioners is scheduled to vote on the transfer.
Consumer Watchdog and other critics argue the annual transfer is in violation of Proposition 26, a 2010 state ballot measure that says that charges for government services must be linked to the cost of providing the service.
``This could be a Tuesday morning massacre for ratepayers with nearly one quarter of a billion dollars wrongly taken to fill the City of Los Angeles's budget gap,'' said Consumer Watchdog President Jamie Court. ``This money amounts to theft from ratepayers. These dollars should go to fixing the DWP failing infrastructure or be rebated to ratepayers.''
A spokeswoman with the LADWP declined to comment on the transfer and the accusation from Consumer Watchdog that it violates Prop 26.
The city's proposed settlement of the lawsuits would reduce the annual payment by capping the 8 percent taken from the LADWP fund from rates determined by an ordinance approved in 2008, which is a lower rate than the a 2016 ordinance.
Consumer Watchdog said the law should still bar future takings from ratepayers without a vote of the public and that it is considering its legal options.