L.A. POWER GRAB; CHARTER AMENDMENT HH COULD LEAD TO FUND RAIDS.

Byline: Patrick McGreevy Daily News Staff Writer

Billed as an innocent proposal to streamline Los Angeles city government, Charter Amendment HH on the Nov. 3 ballot would give the City Council broad power to strip the harbors, airports and Department of Water and Power of their historic independence.

Critics call the measure a power grab by the City Council that could prove destructive to agencies that are fundamentally businesses dealing with billions of dollars of public money.

``Is this some Machiavellian plot? No,'' said Chief Legislative Analyst Ron Deaton, the powerful council liaison who wrote the measure.

Deaton insists the measure is innocent and intended only to facilitate the transfer of airport and harbor police forces to the LAPD.

Still, he acknowledges that if the measure passes, the council with a two-thirds vote could transfer functions, powers or duties out of or into the city proprietary departments or reorganize them entirely. Currently, the council only has that power regarding general fund departments.

Critics - including heads of the proprietary departments - take a dim view of the council suddenly having that kind of power over agencies that have extensive insulation from political interference under the City Charter.

``Anyone who has to run a business like that would be concerned because it integrates politics into a situation where you are in a highly competitive industry,'' said Bill McCarley, the retired DWP general manager and a longtime power at City Hall.

``It's a terrible idea because we need professional management,'' said Bill Powers of the United Chambers of Commerce of the San Fernando Valley. He said he is concerned that broadening the council's power over self-sufficient agencies would inject politics into their operation.

Alexandra Glickman, a member of the city's appointed Charter Reform Commission, said the city's proprietary departments should remain independent and continue as self-sufficient enterprises, separate from the city's general fund.

``I would be very concerned about the ability to raid and pillage,'' she said of the measure.

Added Xandra Kayden of the League of Women Voters: ``It's too broadly written. It opens the door in ways that it should not be opened.''

Could cause havoc

Among the concerns are that giving such power to a political body like the council could play havoc with the agencies.

Kayden warned that the council could raid proprietary departments for their revenue generating functions to pad the general fund.

For instance, the City Council could attempt to take the highly profitable airport parking lots away from the airport department to bolster a sagging general fund if Federal Aviation Administration approval could be gained.

``All of those functions go to support the airport system,'' Kayden said.

The measure stems from the desire to put all police forces under the Los Angeles Police Department.

Supporters, including Councilwoman Laura Chick and Police Chief Bernard C. Parks, have said it would make easier efforts to the transfer the airport and harbor police forces and carry out other streamlining measures.

Jack Driscoll, executive director of the city Airports Department, said the measure has caused ``fairly large'' concern on his part. He is reviewing the issue to determine whether to take an opposing position.

``It could possibly create a situation where they could cut up the department,'' Driscoll said. ``It could create some problems. We have to take a hard look at it.''

Uncertainties about the potential implications of Charter Amendment HH have caused Mayor Richard Riordan to decide to stay neutral on the ballot measure, said Kelly Martin, his chief of staff.

Financial worries

Martin and Driscoll said the measure might cause worry in financial markets that are heavily invested in the proprietary departments. They said bond holders and rating agencies need to be assured that passage of the measure will not jeopardize the departments and their financial standing.

``It appears as though it could create some issues with our bond holders,'' Driscoll said.

``We want to make sure the concerns of the bond rating agencies are alleviated,'' Martin said.

In addition to raiding the proprietary departments, Kayden warned the measure could allow the City Council to dump off expensive functions into the proprietary agencies, so they are not a burden on the general fund.

For instance, the City Council could transfer the costly street light program from the Public Works Department to the DWP.

``Then the city wouldn`t have to pay for it,'' Kayden said.

Seeking assurances

In fact, DWP General Manager David Freeman was concerned enough about the potential implications to contact City Council members for assurances, said Frank Salas, a spokesman for the DWP.

Salas said Freeman was assured there would be no council raid on his agency to take major functions away for the general fund.

``Technically, under the worst case scenario, that could happen, but council members have told Mr. Freeman that that is not their intention,'' Salas said.

Deaton said he has assured Driscoll and Freeman that the ballot measure is not part of a scheme to gut the proprietary departments.

But he acknowledged the possibility that major reorganizations involving airports, harbor or DWP could become attractive - and feasible - for the council to carry out.

For instance, the DWP's water system might do better if paired with the city's sewer system under a new agency outside the DWP, Deaton said.

``It might be under a separate agency altogether,'' he said. ``Would wastewater and water go together better than water and power?''

He also said it might be more efficient to merge the Airport and Harbor departments into one agency.

However, he said state and federal law would make it difficult for the council to simply raid proprietary agencies of their revenue-producing functions.

``We can't raid the harbor because it's under (state) public trust doctrine,'' Deaton said. ``There are also federal laws prohibiting that at the airport.''

However, given the history of the city of trying to take money from the airport department for the city general fund, Roger Cohen of the Air Transport Association said his group is reviewing the ballot measure closely.

``We're looking at it,'' Cohen said. ``We are ever vigilant to oppose attempts by any city to circumvent federal law.''

Raising suspicions

Richard Close, president of the Sherman Oaks Homeowners Association, said he might support giving the council more power over the budgets of proprietary departments, but he is suspicious of how it is being done, just months before two commissions are scheduled to propose whole new charters.

``It seems silly to have amendments made to the charter now when it's going to be entirely replaced next year,'' Close said. ``It raises concerns about why this is being done this way.''

Chick, the primary backer of the measure, did not return calls for comment.

Kayden said there may not be any raid attempts by the current mayor and City Council, who have been able to balance the budget because of the strong economy.

But Kayden said future councils could be tempted to raid profit-making departments ``if we go into another recession.''

Kayden said part of her concern was that there was no debate about the measure by the City Council before it was rushed onto the ballot, given that it affects proprietary departments that represent half of city budget expenditures, or about $5 billion.

``Somebody should have asked some questions about it,'' Kayden said. ``It's not written just about police. The way it was written, it opens up the possibility for the city to get into the budget and functioning of the proprietary agencies.''

CHANGING THE RULES

This is the full text of the Impartial Summary of City Charter Amendment HH on the Nov. 3 ballot, as it appears in the Voter Information Pamphlet compiled by the city clerk and mailed to city voters. The Impartial Summary was written by the author of the ballot measure in his role as the city's chief legislative analyst.

Impartial Summary

By Ronald F. Deaton, chief legislative analyst

This measure would eliminate the restriction on the Charter that prevents the Mayor and City Council from transferring or consolidating any of the duties, powers or functions of any of the proprietary departments or either of the pension departments.

The City of Los Angles government structure is made up of 44 City departments, bureaus and offices, including the departments of Harbor, Airports and Water & Power. All are headed by a general manager who is appointed by the Mayor and confirmed by the City Council. The general manager of each of the proprietary departments reports to an appointed Commission that is responsible for governing the department's operations.

The Charter gives the Mayor and the City Council the authority to transfer or consolidate any of the duties, powers or functions of the City departments. However, the Charter specifically excludes the Departments of Harbor, Airports, Water & Power, Pensions and the City Employees' Retirement System (CERS) from this provision.

This measure will give the Mayor and City Council the same authority that they currently have with all other City departments to consolidate or transfer any of the duties, powers, or functions of the departments of Airports, Harbor, Water & Power, Pensions and the City Employees' Retirement System.

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Box: Changing the rules (see text)