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LA WATCHDOG - One of the City’s the most important oversight entities, if not the most important, is the Ratepayer Advocate who is charged with being an independent watchdog over our Department of Water and Power, a sprawling enterprise with annual revenues of $7 billion, assets of $33 billion (not counting pension assets of $19 billion), long term debt of $20 billion, and 11,500 employees, most of whom are represented by the IBEW. DWP also has a capital budget that will exceed $100 billion over the next decade as part of its plan to be powered by 100% renewables and to develop more local supplies of water.
On March 17, 2023, the City Clerk notified Mayor Bass, Council President Krekorian, and Energy and Finance Chair Yaroslavsky that the term of Dr. Fred Pickel, the current Ratepayer Advocate, expired on December 12, 2023. Unfortunately, Mayor Bass did not appoint her two members to the Citizens Selection Committee until October 30, 2023.
A year later, we still do not have a candidate to replace Pickel who intends to retire in mid-November, having delayed his retirement several times. The Committee has hired Korn Ferry, a leading executive search firm, which in turn has prepared a position specification brochure to assist in identifying and vetting candidates to fill this important position.
One stumbling block is the compensation necessary to attract a qualified candidate who has the knowledge, experience, presence, and leadership capabilities to be an excellent Ratepayer Advocate. This is a difficult job, not only because it involves working with and understanding the nation’s largest municipal utility (and its bureaucracy) that is going through a huge climate change related transition but dealing with the City’s political establishment and its many special interest constituencies.
The Korn Ferry brochure has compensation package in the range of $250,000 to $350,000, a number supported by the City Administrative Officer. (Note: The Ratepayer Advocate is paid for by DWP, not the City.) However, Korn Ferry has recommended a compensation in the range of $550,000 based on their knowledge of the market for an excellent candidate. This is supported by a compensation study by Mercer, another internationally recognized consulting firm.
Some have speculated, with good reason, that the Mayor and the City Council do not appreciate independent oversight, even though 78% of the voters approved of the establishment of the Ratepayer Advocate in 2011.
Fred Pickel
For example, last year Pickel said that the funding of the Silver Lake Reservoir Master Plan by DWP was not reasonable because there was not a “nexus” between the plan and drinking water services, causing one councilman to object, or as one observer commented, “He had a bird.”
Recently, Pickel commented that the escalation in rates and bills association with its 100% Renewables by 2035 was “not reasonable,” again causing conniptions by the environmental community and several at City Hall.
The Committee should proceed using the compensation package recommended by Korn Ferry and Mercer. We need a strong Ratepayer Advocate, one that will protect our interests, much in the same way that Pickel, along with his sidekicks, Camden Collins on power issues and Grant Hoag on water matters, did over the last decade. After all, you get what you pay for, and $300,000 is a drop in the bucket when the Department will be spending over $100 billion over the next decade.
(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].)
