ALARCON BACKS SUIT AGAINST DWP RATE HIKE.

Byline: Rick Orlov Staff Writer

Stepping up his legal and political battle, state Sen. Richard Alarcon endorsed a class-action lawsuit filed Thursday that challenges the 11 percent water-rate increase the Department of Water and Power imposed this year.

At a news conference outside the downtown County Courthouse, the Van Nuys Democrat, who is running to unseat Mayor James Hahn next year, said he also wants the city to return a total of $800 million transferred by the DWP to the city general fund since 2000.

``I think the ratepayers deserve to have their money back and an explanation from city officials about this hidden tax,'' Alarcon said.

``We all know what it's like to borrow from one fund to balance another, robbing Peter to pay Paul. But when it's done like this, it's a pickpocket at work. This is a sneaky way to get a tax.''

Alarcon said he is being candid about his effort to use the issue as part of his mayoral campaign.

``It is political, there's no question about it,'' Alarcon said. ``But the case is real. The case is not about Richard Alarcon. It's about the taxpayers and whether the 11 percent should be given back.''

Alarcon has been critical for several months of the water-rate hike and the transfer of $239 million from the DWP to the city's general fund, which helped the city balance its $5.4 billion budget.

In his role as chairman of the Senate Audit Committee, he has ordered a review of the transfer and whether it is legal.

``The reason we are filing this now is because ratepayers are paying now,'' Alarcon said. ``We can't afford to wait.''

An angry Dominick Rubalcava, president of the city Water and Power Commission, defended the rate, saying it is needed to protect the water supply system.

``It's easy for him to make us a target,'' Rubalcava said of Alarcon. ``He should wait for the audit to finish because I'm convinced that will show we did nothing wrong.

``It's easy to file a lawsuit and get all that attention. It's another thing to do the right thing.''

Rubalcava said Alarcon didn't raise such strong objections about the DWP transfers to the city general fund when he served on the City Council from 1993 to 1998, before his election to the Senate.

``I didn't see him turning down the services that the DWP money paid for in his district.''

A Hahn spokeswoman also questioned Alarcon's motives.

``This is something that Richard Alarcon voted for himself when he was in the City Council and he understands that this makes good financial sense for the city,'' Deputy Mayor Julie Wong said. ``Why isn't he suing himself?''

The legal action names members of the City Council who were on the panel in 2000, including former members Ruth Galanter, Rudy Svorinich and the late John Ferraro.

The plaintiffs are five residents of Alarcon's district in the northeast San Fernando Valley. He said the legal action was being paid for by the five attorneys involved.

Alarcon said the DWP never sought a water-rate increase when he served on the council and that the problem developed with the increasing amounts taken from the agency.

In the past, the DWP transferred 5 percent of its surplus from water sales and 7 percent from power to the general fund. This year, an additional $60 million was taken from the agency.

``Coincidentally, that's the amount of money the rate increase will bring in,'' Alarcon said. ``This is just a hidden tax increase, and I think people are fed up with this.

``It's a matter of restoring trust in government,'' Alarcon said.

Also, Alarcon said he will be circulating petitions as he campaigns, asking people to voice their outrage over the rate increases. The petitions are not asking for any kind of ballot measure, and are intended only to have residents express their views.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com