HAHN CALLS IN SICK FOR STATE OF THE VALLEY EVENT.

Byline: Rick Orlov Staff Writer

VAN NUYS - After weeks of uncertainty over whether he would appear, Mayor James Hahn failed to show up to deliver his much anticipated State of the San Fernando Valley speech Thursday, citing illness.

A leading business group, the Valley Industry and Commerce Association, had earlier moved its annual meeting from Universal City to Van Nuys so Hahn wouldn't have to cross a picket line of striking hotel workers. Until then, Hahn had not committed to appear, and for months VICA could say only that he was ``invited'' because the mayor would not attend the business community's most important event.

Hahn, who had been fighting a cold all week, was on his way to the VICA session at the Airtel Plaza Hotel when he became ill and returned home, aides said. He also had canceled a planned appearance at the Studio City holiday parade last weekend.

``The mayor was looking forward to the speech and we are trying to arrange a new date with VICA so he can deliver his State of the Valley address,'' spokeswoman Shannon Murphy said.

The mayor's annual Valley speech has been a tradition for more than a decade, but under Hahn in recent years some say it has seemed like an on-again, off-again relationship.

In 2002, Hahn declined an invitation to address VICA only four days before the election on the breakup of Los Angeles and creation of a separate Valley city, which VICA supported and Hahn opposed. Hahn blamed his absence on a scheduling conflict, and a month after the election he addressed a smaller VICA audience.

On Thursday, some 300 business leaders gathered to hear Hahn. Tickets were $55 for VICA members and $65 for nonmembers. Some said they hoped Hahn would reschedule his appearance even if the turnout might be smaller.

Instead of hearing from Hahn - who was expected to detail his support for business-tax reform, the signing of tax-relief measures and improving conditions in the Valley - the business leaders heard Ron Deaton talk of his plans to rework the image of the Department of Water and Power.

``We have the best municipal utility in the country, but we have to let people know that,'' said Deaton, who took over the post of DWP general manager Dec. 1 after 12 years as the City Council's chief legislative analyst, during which he earned a reputation as the most powerful official in City Hall.

Deaton said the DWP charges residential customers 30 percent to 40 percent less for electricity than private companies and operates one- fourth of the power lines in the state.

``A lot of people look at us with envy,'' Deaton said. ``But it's a system that made sure we didn't have any power shortages in Los Angeles during the energy crisis and were able to sell power to the rest of the state to keep it going.''

He added that the DWP's sale of surplus power during the state electricity crisis in 2000 and 2001 earned the anger of state officials ``who called us crooks and still haven't paid us what we are owed.''

The utility has been in negotiations for several years over the power supplied to the state, with the DWP estimating that it had provided some $160 million worth of electricity.

At the same time, Deaton acknowledged that the utility has been mired in its own local image problems - from criticism of a recent 11 percent water-rate increase to whether the utility properly monitored a public- relations contract with a downtown firm.

Controller Laura Chick has said the firm, Fleishman-Hillard, overbilled the city by $4.2 million over six years. The firm has contested that amount and asked for a mediator to resolve the matter.

``The only way we are going to correct problems like that is to make sure they don't happen again,'' Deaton said.

The VICA audience included several City Council members and two of Hahn's major opponents in the March 8 election, former Assembly Speaker Bob Hertzberg and state Sen. Richard Alarcon, D-Van Nuys.

Alarcon has been part of a legal action seeking to rescind the water- rate increase, and he said he had wanted to raise the issue during the luncheon.

``But they asked me not to pose any questions,'' Alarcon said.

VICA officials said they were disappointed that Hahn had to cancel his appearance - particularly since the location was moved from the Sheraton Universal Hotel in November to avoid any problems with pickets.

``Actually, it was all the city officials who said they wouldn't be able to attend if it meant crossing a picket line,'' VICA Chairman Martin Cooper said. ``We understand that.''

Cooper said he had hoped to hear the mayor address business-related issues, including further business-tax reforms.

VICA is pushing to have a citizens advisory panel on business taxes made permanent and for work on further business tax reductions, Cooper said.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com

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