DWP TO PAY CITY $60 MILLION FUNDS NEEDED TO BALANCE MUNICIPAL BUDGET.

Byline: James Nash Staff Writer

With one member declaring that ``the gravy train is coming to an end,'' the commission overseeing the Los Angeles Department of Water and Power reluctantly agreed Tuesday to give the city $60 million to balance the municipal budget.

The money has been at the center of the increasingly contentious relationship between the City Hall and the municipal utility that it nominally controls. City and DWP officials have clashed over the utility's proposal to raise water rates; council members' plans to put DWP land in the Owens Valley into an environmental easement; and the DWP's request for more money for Internet-based contracting.

In an emergency meeting Tuesday, the Board of Water and Power Commissioners unanimously agreed to transfer $60 million to the city - money Mayor James Hahn had counted on to balance the city's budget this year.

But commissioners expressed their displeasure with the DWP acting as City Hall's cash cow.

``We're at the end of our rope,'' said Commissioner Gerard McCallum. ``The gravy train is coming to an end, and we need to meet our obligations and nothing more.''

The DWP's newest commissioner, Silvia Saucedo, said she felt compelled to vote for the transfer because Hahn and the City Council already included the $60 million in the budget.

``I see the transfer really bailing the city out, and my hands are tied,'' Saucedo said.

The DWP already gave the city $159 million this year under a formula that earmarks 7 percent of DWP power revenue to the city. The utility also gave the city $27 million from its water fund.

City and DWP officials say the transfers recognize that the municipal utility, unlike private utilities, pays no city taxes. But some critics, including activists in the San Fernando Valley, call the transfers a hidden form of taxation and say the money should be used to roll back increases in power and water rates.

At Tuesday's meeting, La Tuna Canyon resident David Schneider criticized the transfer as ``yet just another tax'' and questioned whether it was legal.

``Another burden for the ratepayers and DWP, to be forgotten tomorrow,'' said Schneider, a longtime DWP employee. ``Another bailout of mismanagement at City Hall.''

Councilman Tony Cardenas, who chairs a committee that deals with the DWP, said the money was necessary to expand the Los Angeles Police Department and to maintain city services in a tight budget year.

``It keeps cops on the streets; it keeps us able to provide services across the board,'' Cardenas said. ``It's all part of being part of the city family.''

James Nash, [phone]

james.nash(at)dailynews.com