DWP PULLS PLUG ON FUNDING CUTS TO AFFECT LOCAL ECONOMIC DEVELOPMENT.

Byline: James Nash Staff Writer

The Los Angeles Department of Water and Power has yanked its $100,000 contribution to San Fernando Valley economic development, drawing protests from all seven Valley City Council members and Controller Laura Chick, who say the decision will cripple efforts to attract and retain businesses in the community of 1.4 million people.

The DWP has acted as City Hall's vehicle for funding the Economic Alliance of the San Fernando Valley, which gets other public funds directly from the cities of Burbank, Glendale, San Fernando and Calabasas in support of regional economic development.

DWP General Manager David Wiggs defended the fund cutoff, saying the agency needs to cut expenses since it is seeking an 18 percent water rate hike.

Mayor James Hahn's office did not return calls for comment.

Valley council members who signed the letter to Wiggs said the Economic Alliance was the wrong place for the DWP to cut back, noting it has helped to create or retain more than 7,500 jobs in the Valley.

``The alliance is one of the most productive and busy and effective economic development organizations we have here in the city of Los Angeles,'' Chick said Thursday. ``It has been a major focus of the Department of Water and Power to promote, generate and assist with economic development here in the city.''

Chick, who has issued audits of loose spending practices by the DWP and questioned why numerous recommendations for cost-savings were ignored, was joined in signing the protest letter by council members Wendy Greuel, Jack Weiss, Dennis Zine, Tom LaBonge, Tony Cardenas, Alex Padilla and Greig Smith. All represent districts partly or wholly in the Valley.

``I wholeheartedly support the (city) controller's audits to control unnecessary spending,'' Councilwoman Greuel said. ``But I don't want to be penny-wise and pound-foolish in providing funds for economic development.''

Weiss added: ``I think we should study all of our legal options at this point. My hope is, this unanimous show of support from the Valley council members will do the trick.''

And Cardenas, who has been sharply critical of DWP spending on items not related to its core functions of providing electricity and water to Los Angeles residents and businesses, said he looks forward to questioning DWP officials on the reasons they dropped the contribution.

``They need to justify their cuts as well as their expenditures,'' Cardenas said.

The DWP's decision to cut funding was indicated in a letter Monday from Wiggs to the Economic Alliance.

DWP officials did not return phone calls Thursday but released a statement from Wiggs in which he said the DWP would reconsider its decision to cut funding if City Council members call for it.

``In order to cover the increased costs of securing L.A. DWP's water and power system, the department is seeking an increase in its water rates while taking steps to rein in spending,'' the statement said. ``The decision not to fund the Economic Alliance was nothing more than a cost-cutting measure in very difficult financial times.''

Bruce Ackerman, the chief executive officer of the nonprofit Economic Alliance formed seven years ago, said the group spends nearly 90 percent of its time assisting and recruiting businesses in the portion of Los Angeles that lies in the San Fernando Valley. The group also serves Burbank, Glendale, Calabasas and San Fernando.

If the alliance loses the DWP contribution, its leaders would have to reconsider their economic development efforts in Los Angeles, Ackerman said, although he didn't say the group would cease working in Los Angeles.

``My genuine hope is that the city of Los Angeles and the mayor's office will realize the importance of the role we play in the Valley and will find a way to replace the funding,'' Ackerman said. ``It's a significant chunk of money, and we've got to find a way to replace it.''

James Nash, [phone]

james.nash(at)dailynews.com