NEIGHBORHOOD COUNCILS / LADWP MEMORANDUM OF UNDERSTANDING OVERSIGHT COMMITTEE

OVERSIGHT PLATFORM
February 5, 2008

The Oversight Committee, representing 75 certified neighborhood councils, believes the following objectives on behalf of ratepayers can be achieved.

Respect and implement the five-year Memorandum of Understanding mutually agreed upon by the City of Los Angeles , acting by and through the Department of Water and Power, and certified neighborhood councils, dated March 5, 2007 .

No water or power rate increases should be considered until the Industrial, Economic and Administrative five-year survey that is required by the City Charter Section 266a has been completed and analyzed.

An independent auditor's assessment using the template process established by the City Council on October 26, 2005 (CFN 05-0548) must come before the OSC and other community groups before any new rate increase proposal or change.

The DWP needs to implement the cost saving recommendations provided by Huron (BWG) over the past seven years. The DWP needs to show that it is running an efficient operation. Audit reporting should look at the total picture, rather than the limited scope provided by past revenue requirement studies.

The OSC recognizes the 10 years of neglected infrastructure maintenance and the service reliability issues. We strongly urge and support the need to remedy this neglect. There must be a mechanism to assure that funds are directed to overcoming these problems.

The OSC recommends that the city not grant multi-year rate increases and that it consider controlling or capping cost-adjustment pass-through charges, particularly with respect to "green" energy source projects.

The OSC does not object to the transfer of funds from the DWP to the city's general fund, except for the question of the legality of the water transfer. However, such transfers should be based on excess operating funds, similar to a corporate stock dividend. Transfers should not be used as method to compensate for general fund shortages from other sources. DWP bonds should not be used, directly or indirectly, to enable transfers to the city's general fund. The OSC does not recommend transfer of funds to the city for non-core utility projects.

An independent Rate Payers' Analyst should be hired to provide information and advice to ratepayers, the City Council and the Mayor on complex rate, cost and revenue issues.

The NC/LADWP MOU OSC should be incorporated into the DWP internal Ad Hoc Oversight Committees