AUDIT SOUGHT TO SCRUTINIZE SEWER COSTS.

Byline: Patrick McGreevy Daily News Staff Writer

Charging that Los Angeles residents are overpaying for sewer services by up to $70 million a year, City Councilmen Joel Wachs and Hal Bernson called Tuesday for a bench-marking audit of the wastewater system to identify potential cost savings.

Stepping up pressure for reform, Wachs and Bernson plan to ask the City Council to approve the audit at a July 21 meeting in Northridge, where they hope San Fernando Valley residents will turn out in large numbers to support the study.

``There's no question that the city's sewer service system is just totally out of control,'' Wachs said during a City Hall news conference. ``Los Angeles' sewer service fees are among the highest in the nation and the burden is being borne by the ratepayers of the city.''

Wachs and Bernson submitted a motion to the council on Tuesday that calls for an outside auditor to be hired to conduct a ``best-practices bench-marking'' study that would compare Los Angeles' $631 million annual wastewater system with those operated by other cities and private firms.

A similar bench-marking study done three years ago for the Los Angeles Department of Water and Power led to cuts of $250 million annually to that agency's budget and a reduction of the DWP work force by more than 2,000 employees.

``Obviously the management audit is desperately needed,'' Bernson said.

The Daily News recently reported that despite a 1993 City Council vote to conduct a management audit of the sewer system, the study has never been done. It was blocked by City Attorney James Hahn, who feared it might harm the city's position in litigation by other cities challenging the sewer fees they were charged by Los Angeles.

Wachs and Bernson sought the management audit five years ago after whistle-blowers in the wastewater system told them of staffing inefficiencies and wasteful spending practices, Wachs said.

``Now we want to go beyond just an audit,'' Wachs added. ``We want the audit to include bench-marking.''

In 1995, Wachs and Bernson tried unsuccessfully to get the council to put the sewer system out for private bid, after some firms said they could guarantee the city a saving of $30 million annually and possibly could save up to $70 million.

Wachs said 400 other cities have privatized sewage-treatment systems.

``Again that met with stonewalling resistance from both management and city employee unions,'' Wachs said.

Bernson said a recent cost analysis done by the city Sanitation Bureau identified areas where cuts might be made, including direct labor costs of $219 million.

He also said there is $31.5 million being paid out of the sewer fees to other city departments providing services to the sewer system.

``It means that the sewer service charges that are supposed to directly pay for the repairing of the Hyperion (Treatment Plant) and secondary treatment are going to other departments in the city to augment their budgets,'' Bernson said.

Judy Wilson, who heads the city Sanitation Bureau, has said the payments to other departments were for legitimate support services for the sewer system, including legal services, vehicle maintenance and warehousing.

The council meeting on July 21 is set to begin at 10 a.m. in the St. Nicholas Grande Ballroom, 17037 Plummer St., Northridge.

Bernson said he would try to repeal a franchise fee that takes $20 million annually from the sewer fees to subsidize the city's general fund - the ``most outrageous insult of all,'' he said.

Wachs and Bernson plan to put the Government Efficiency Committee to approve the bench-marking study.