In another salvo in the battle between L.A.'s utility and City Hall, City Controller Wendy Greuel announced Wednesday that she is undertaking an audit of the Department of Water and Power's finances to verify its story that it doesn't have the cash on hand to transfer a promised $73 million payment to the city's ailing general fund.
The DWP reneged on the promise after the City Council last week denied an electricity rate increase for the utility's customers. The DWP stated it could not declare a surplus of funds and could not, therefore, give the city the cash. City Councilman Bernard Parks, however, has stated the department, considered the most cash rich in the city, has $1 billion dollars on-hand.
Critics on the council consider the withholding of funds a game of blackmail in the DWP's efforts to get a series of rate hikes pushed by Mayor Antonio Villaraigosa. To top it off, despite the city's impending, $700 million deficit, many department employees are getting raises this year that were pushed by the mayor and approved by the council last fall.
“I want to take the politics out of this process and provide an independent review of the DWP's finances,” Greuel said. “I want to ensure that there is proper oversight and transparency for how the DWP spends the ratepayers money and verify the department's claim that they could not complete the 'power revenue transfer. Although I had already begun a separate audit of the DWP's renewable energy portfolio, I thought this financial audit regarding the Power Revenue transfer was critically important to do.”
Greuel's office stated it expected her to complete the audit in one month.
On Monday, in response to the DWP's backpedaling on the transfer, Greuel announced the city would run out of money by May 5 and could only cover employee payroll through April 19.