ALARCON SEEKS STATE AUDITS CHECKS OF DWP FEE HIKE, CITY ATTORNEY'S USE OF OUTSIDE LAWYERS SOUGHT.

Byline: Harrison Sheppard Sacramento Bureau

Launching a major broadside at Mayor James Hahn, mayoral candidate Sen. Richard Alarcon called on the state Wednesday to perform two audits of ongoing controversies in Los Angeles city government.

Alarcon, D-Van Nuys, asked the Legislature's auditing committee to approve investigations into whether the Department of Water and Power is, in effect, imposing an illegal tax increase on city residents by raising water rates and then transferring millions of dollars of DWP revenue to the city's general fund.

``It's a way to increase taxes without ever abiding by the rule of increasing taxes, which is going to the voters,'' Alarcon said.

He also called for an audit into the city attorney's increasingly expensive use of outside attorneys to help with cases.

Alarcon denied that the requests were an attempt to embarrass Hahn or were related to his own campaign, saying the requests were long overdue and the idea for the DWP audit first came from another legislator, Sen. Dean Florez, D-Fresno, who co-sponsored the request.

The city budget this year transferred $239 million from the Department of Water and Power - a $60 million increase over last year - to the city's general fund. Also, the City Council earlier this year approved an 11 percent increase in water rates.

The general fund is mostly funded by city taxpayers, who by law are required to vote on tax increases. Utility rates, however, can be raised without a vote of the public.

Hahn and City Controller Laura Chick said they don't see the audits as necessary.

Chick said she already plans to audit City Attorney Rocky Delgadillo's use of outside law firms. The DWP issue, she said, is more a matter for policy debate than an audit.

Her audit of the city attorney is not expected to start until after January, and is not likely to be finished before the mayoral primary in March. She said Alarcon's desire to have the state do an audit more quickly raises some political questions.

``I try never to second-guess someone else and interpret their behavior or their words, but it's an awfully interesting coincidence, that it's timed so close to an election that the senator is participating in as a candidate,'' Chick said.

Hahn spokeswoman Julie Wong said the mayor does not think the state audits are necessary because Chick has been looking at the same issues.

``This is clearly politically motivated and would be a waste of taxpayer dollars to duplicate efforts already under way,'' Wong said.

The two audits are expected to cost $454,500 and take more than 5,700 hours of staff time.

The audits committee did not finish voting Wednesday, but appeared ready to approve both requests today. The committee can launch the audits without approval of the Legislature or the governor.

Several committee members objected to the idea of the state conducting an audit into a local issue, especially with Chick planning to do her audit.

``I think it's a complete misappropriation of state resources for the state of California to expend limited auditing resources on a matter that is strictly and solely a city responsibility,'' said Sen. Tom McClintock, R-Thousand Oaks.

When Alarcon said the state auditor's tradition has been to perform audits of local government agencies, McClintock called it a ``really stupid tradition.''

Alarcon had initially asked for the DWP audit to also include an examination into whether public relations firm Fleishman-Hillard Inc. had overbilled the DWP, but that request was dropped after committee members noted the city was planning to investigate that issue.

State Auditor Elaine Howle said the Fleishman issue would have been only a small part of the total audit, requiring about 250 to 300 staff hours.

Staff Writer James Nash contributed to this report.

Harrison Sheppard, [phone]

harrison.sheppard(at)dailynews.com