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Grand jury criticizes city for using Glendale Water & Power as 'piggy bank'

Report hammers funds transfers

March 26, 2013|By Brittany Levine, brittany.levine@latimes.com

A preliminary Los Angeles County civil grand jury report unsealed this week criticizes Glendale for using its utility as a "piggy bank" to cover budgetary shortfalls and heralds a more thorough review in the months ahead.

The report, which was released Monday, comes a week before the April 2 election, when voters will decide whether to approve Measure B, a city ballot measure that would change how the city collects tens of millions of dollars from the electricity fund of Glendale Water & Power.

While the civil grand jury acknowledged the fiscal challenges facing cities such as Glendale, “it is not permissible for the city to use Glendale Water & Power as its ‘piggy bank' to satisfy budgetary shortfalls,” the report stated.

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City Manager Scott Ochoa railed against what he called a flawed report and its timing just days before the general election.

“The civil grand jury looks at charter cities like they're the hammer and we're the nails,” Ochoa said, referring to Glendale's status as a city that has its own governing laws. “They're hell-bent on finding a narrative that fits what their perspective is.”

But Harry Zavos — a retired law professor who has long criticized the transfer and filed the complaint with the grand jury that prompted the report — said that after months of degradation by City Council members and city officials, the preliminary findings were gratifying.

“I hope [the report] sends a message to the new council that instead of ignoring or distorting criticisms, or belittling those who make them, it should honestly and fairly engage with them,” Zavos said. “No one likes to be criticized, but in our form of government, the public is best served when the government does not, like the turtle, draw its head into its protective shell.”

For decades, the city has transferred tens of millions of dollars annually from Glendale Water & Power to the General Fund, which pays for police, parks and other public services. While critics have called it a backdoor tax that artificially inflates utility rates, city officials say it is the only way they can maintain the current level of public services.

In 2011, officials stopped transferring money from the water utility because some court cases cast doubt on the legality of the practice, but they continued to transfer electricity revenues.

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