Controller Rejects DWP Bills as Extravagant

Department of Water and Power ratepayers have been asked to foot a $100,000 bill for a black-tie dinner celebrating the reopening of Los Angeles City Hall and a $75,000 sponsorship that provides the agency with VIP tickets for USC basketball games, ice shows and the circus, officials said Wednesday.

Those are among the $601,293 in DWP bills that City Controller Laura Chick refused to pay Wednesday, sending them to the City Council for review and action. Chick said she will reject all similar bills until the department revamps what she calls vague policies that allow extravagant spending.

“I cannot in good conscience approve multiple millions of dollars for party time and VIP receptions,” she said.

“It’s beginning to look like the DWP is the Department of Wasteful Practices,” Chick said. “They are behaving, quite frankly, as if they are an Enron, with no accountability to the ratepayers.”

In a letter to the Los Angeles City Council, Chick said the DWP has failed to provide adequate documentation to show that 24 separate expenses are warranted.

DWP General Manager David Wiggs said he is aware of Chick’s concerns and he is taking steps to better regulate spending on promotional activities.

“We are working on a policy that would tighten this up a little bit,” Wiggs said. “I’m still pretty confident that all of these expenditures are going to qualify under the new policies.”

Wiggs said he did not have time Wednesday to review all the expenses questioned but said the agency should be given some latitude in deciding what advances its mission.

“At the end of the day, we have to make judgments about what is important and what is not,” he said. “I think these expenses can be justified for business reasons, environmental reasons or educational reasons.”

Jon Coupal, head of the Howard Jarvis Taxpayers Assn., applauded Chick, saying, “We absolutely support her cracking down on the DWP’s profligate spending.”

As a semiautonomous city agency with its own governing board, the DWP has a history of running afoul of audits, including a 1993 controversy in which it spent $800,000 on catering for managers and other workers during a strike.

Chick said Wednesday that she had been asking department officials since September to provide guidelines and policies to help her determine if expenses are justified.

The billings that Chick refused to pay include $100,000 to co-sponsor an April 27 dinner to celebrate the completion of the $300-million renovation of City Hall.

For $100,000, the DWP would receive 24 dinner tickets for DWP executives and their guests.

The $500-per-person dinner is expected to draw 900, and officials said much of the ticket cost goes to restoration of City Hall.

Chick said the DWP should instead provide the money for a public celebration planned by the city the day before the dinner.

Wiggs said the event promotes “a better business atmosphere” for the city.

The controller also refused to approve the DWP’s $75,000 annual sponsorship of the Los Angeles Memorial Coliseum. As part of the deal, the DWP gets advertising at the Sports Arena and on a freeway video sign, as well as VIP suite tickets for USC basketball, Disney on Ice and the Ringling Bros. Circus at the Sports Arena. “I don’t see how paying thousands and thousands of public dollars for VIP sports tickets benefits the customers or the ratepayers of the DWP,” Chick said.

The event tickets, according to the agency, are offered to key customers “to acknowledge their value” to the DWP.

John Lee, a spokesman for the Coliseum, estimated the value of the tickets at less than $3,000, saying most of the sponsorship payment goes toward advertising.

The controller also rejected a $15,000 catering bill for a ceremony that renamed the DWP headquarters for former City Council President John Ferraro; $4,747 spent on catering for DWP’s highest-paying customers and some employees at Dodger Stadium; and $6,002 for an employee safety recognition lunch.

“My message to the DWP is, mend your sorry ways and clean up your act,” Chick said.