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LA WATCHDOG - The Department of Water and Power is one of the most important enterprises in the City, delivering water and power to four million Angelenos and to over 200,000 businesses that provide millions of jobs that fuel our economy.
The Department is a massive organization with 11,300 employees and annual revenues of almost $7 billion, debt approaching $20 billion, and assets of $35 billion, all of which need to be managed effectively and efficiently. But that is not the case.
The Department is currently searching for a new General Manager since Marty Adams is retiring after almost five years at the helm. But this search has dragged on and created considerable controversy as the internal candidates have been passed over despite the support of the IBEW, the Department’s domineering union.
Over the last twenty years, DWP has had six general managers (not counting four interim GMs who served less than two years in total). This turnover of General Managers, only one of which was home grown (Adams), and lack of continuity has had an adverse impact on the Department. This has led one former executive to quip, “Anyone qualified to be General Manager should be smart enough to not take the job.”
The five-member Board of Commissioners has also experienced significant turnover. Over the last twenty years, there have been 27 politically appointed commissioners, very few of which have any relevant industry or management experience. This includes three new commissioners that have been appointed within the last year.
Adding to the confusion are the Councilmembers, the Mayor, and their staffs who also lack any relevant experience. But this lack of knowledge does not hinder them from determining policy goals, no matter how unrealistic or costly. A prime example is the LA100 Renewables Plan where DWP will be powered by 100% renewable energy by 2035 even though it is technically very difficult, if not impossible, and will require a tripling of our rates (if we are lucky).
Adding to the confusion is the politically powerful IBEW, the Department’s union that represents over 90% of the DWP’s employees. Operating behind the scenes, the union leadership influences many decisions to its benefit, including those involving outside contracts through the very complicated Notice of Compliance Process. At the same time, IBEW management will often act as a counterbalance to some of the hare-brained schemes coming out of City Hall.
There are also issues of oversight. The Department is searching for a replacement for the termed-out Fred Pickel, the Ratepayers Advocate, who has done an excellent job over the last twelve years. Pickel and his staff have helped to rationalize rate increases requested by DWP and have provided guidance based on their extensive experience to management, the Board of Commissioners, the Mayor, and the City Council.
At the same time, the Department should be looking to fill the position of Inspector General who would help weed out corruption and inefficiencies.
DWP is going through a huge transition in both the Water System and Power System involving over $100 billion over the next decade or two. This will require excellent management at all levels, including the Department management, the Board of Commissioners, and City Hall.
While DWP has or is about to retain a management consultant to advise on the role of the Board, the Mayor, the City’s Chief Executive Officer, and her advisors need to take an active role in developing a strong management team to lead the Department during this period of transition, all the while respecting the wallets of the Ratepayers.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He can be reached at: [email protected].)
