City Council Postpones Vote on Withholding $600K in Electricity Bills to the DWP

The City Council postponed a vote Tuesday on a proposal to withhold payment of $600,000 in electricity bills to the Department of Water and Power -- at least until the utility makes good on a debt to the consulting firm that evaluated the need for a electricity rate hike last spring.

Councilwoman Jan Perry said the city's legislative and budget analysts wanted additional time to prepare documents to present to the council. The matter will be heard on Aug. 3 instead.

Perry said the Board of Water and Power Commissioners was scheduled to approve the payment to PA Consulting last week, but backed away on the advice of its attorney.

On Tuesday, she was expected to ask the council to disburse the $600,000 owed to PA Consulting -- using money that otherwise would have gone to the DWP as payment for electricity bills. At the last minute, however, she called for the postponement of the discussion.

Perry said the city should stop paying its electricity bills until the DWP pays PA Consulting and reimburses the city.

Under its original contract, PA Consulting was supposed to be paid only $250,000. When the council ordered additional studies, the contract was amended so the cost rose by an additional $600,000.

The board authorized the payment of $250,000 earlier this year. When payment of the remaining $600,000 came up for a vote last Thursday, Assistant City Attorney Joe Brajevich, counsel for the DWP, questioned whether the council had the authority to nearly triple the cost of the contract with PA Consulting and direct DWP to pay the difference.

"Under the charter, this board controls the funds of DWP so council doesn't have the ability to appropriate DWP funds," he said. "There's no authorization by this board above the $250,000."

Brajevich said DWP Interim General Manager Austin Beutner asked the council's chief legislative analyst to explain the $600,000 bill and provide additional information, but has received no response.

"The city Charter requires certain prerequisites before you can expend money," he said. "Without the information requested by the general manager, we cannot make a recommendation as to whether or not that is an appropriate expenditure after the fact of DWP funds."
Perry defended the contract amendments, saying, "This payment arrangement was consistent with the initial independent third-party review arrangement between the DWP and the council."
Perry was expected Tuesday to urge her colleagues to assert jurisdiction over several contracts approved by the board. The move would give the council authority to veto those contracts.

When the DWP approached the council for an increase in its Energy Cost Adjustment Factor surcharge late last year, the council called in PA Consulting to provide independent analysis of the proposal.

The council and DWP eventually engaged in a bitter fight over how much of an electricity rate hike to impose during an economic recession.

Copyright CNS - City News Service
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