Mayoral blackmail?

He's having a tough time getting the council to sign off on his cockamamie scheme to raise power rates at a time of double-digit unemployment, so the new ploy is raising the dreaded B-word. From the LAT:

In a briefing paper sent to council members Monday night, Villaraigosa's office said the DWP would renege on a promise to transfer $73 million to the city's general fund budget if its rate proposal is rejected. Such a move would cause the general fund, which pays for public safety, libraries and other basic services, to "run out of cash" before the end of the fiscal year on June 30, Villaraigosa's briefing paper said. "Council rejection of the DWP board's action [to increase rates] would be the most immediate and direct route to bankruptcy the city could pursue," the report said.

But wait a minute - Doesn't the mayor insist that there is no possible way that the city will go bankrupt on his watch? What happened to the guy who was in control? Putting aside the amateur hour politics is the rate hike's questionable timing. Once all four increases are in place, households across the city will see electricity cost increases ranging from 9 percent to 28 percent. I like solar panels as much as the next fella, but shouldn't we wait a spell, at least until the jobless rate breaks, say, 12 percent?

Councilman Herb Wesson criticized Villaraigosa for using the possibility of bankruptcy to build support for his plan for installing solar panels. "I don't think you hold people hostage that way," he said.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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