Craig Hoshijima of Public Financial Management told LAFCO that bond agreements would make it difficult to divide DWP among the proposed new cities in the San Fernando Valley and Harbor areas and what's left of LA. The latest secession movement, by residents of Hollywood, would further complicate matters, he suggests.

Public Financial Management was retained by LAFCO to conduct studies on dividing up citywide agencies like DWP. Hoshijima says state law and bond agreements forbid breaking up the utility if it would jeopardize the value of the bonds.

Many residents of the sprawling San Fernando Valley want to form their own city, saying that such a divorce would improve local services and lead to better government. The split would have to be approved by LAFCO first.One way to continue uninterrupted water and power service would be to form a joint operating agreement like the one Glendale, Burbank and Pasadena use to operate Burbank Airport. LAFCO has to devise a plan for the first three years of cityhood if secession is approved by voters.