State Auditor OK's LADWP transfers

The Los Angeles Department of Water and Power can continue subsidizing the City of Los Angeles, according to the State Auditor:

...But the report by California Auditor Elaine Howle found that the transfer of $657 million in ratepayer funds from the DWP to the city general fund since 2001 was legal under the Los Angeles City Charter.

Sen. Richard Alarcon, D-Van Nuys, a mayoral candidate, had requested the audit last August, contending the transfer amounted to an illegal tax increase.

Rather than justifying the practice of transferring funds from the LADWP to the City's general fund, the report points more to Senator Alarcón's inability to ask the right questions.

At issue is not whether funds can or should be transferred to the General Fund, but instead, the question should as whether an increase in water or power rates to fund such a transfer constitutes a tax, which would be subject to Prop 13 rules.