Want Real Reform at DWP? Make DWP a Part of the City!

This week an important committee of the Los Angeles City Council gets to weigh in on reforms proposed for the City’s Department of Water and Power. 

On January 22, 2016, Councilmember Felipe Fuentes introduced a motion, seconded by Council President Herb Wesson and supported by several others, instructing the City Attorney and CAO to draft all necessary charter changes to get the decision to the voters on the November 2016 ballot. 

From the motion: 

In its 1999 study of governance options, RAND Corporation called the utility's existing system "overly complex, cumbersome, and bureaucratic." 

A decade later, PA Consulting found that DWP's governance framework "does not facilitate efficient decision-making and clouds accountability for key decisions."

The Los Angeles 2020 Commission recommended in 2014 that the City establish a full-time, paid independent rate commission of experts to "take the politics out of DWP."

Most recently, the 2015 Industrial, Economic and Administrative Survey noted that unless DWP becomes more transparent "it will be difficult for LADWP to earn back the public trust and carry out its agenda" and recommended that the City consider alternative governance structures for the utility.

Mel Levine, LADWP Commission President, former member of Congress and former State legislator has said, “The bottom line is, there are too many cooks in the kitchen. It makes governance extremely difficult. Everybody can get their oar in — and everybody can blame everybody else.” (LA Times, December 10, 2015.) 

The specific changes proposed are these: 

1. Cap the amount of money transferred from DWP to the rest of the City at “pre-Prop 26 level,” taking the amount of funds DWP contributes to the overall municipality (keep in mind that as a public utility, the LADWP pays no taxes) back to 2009 and fixing it there forever; 

1. To reduce reported political interference, replace the appointed board with one made up of seven full-time “professional” (paid, dearly) members to run the utility including hiring the general manager and controlling all programs, costs, and revenues; 

3.  Remove DWP from the civil service system and set up a DWP-specific Personnel Department. 

This past weekend’s op-ed from Mickey Cantor and Austin Beutner of the 2020 Commission (LA Times,  February 15, 2016) includes a fourth proposed change: subsidies for LA’s “neediest families who sometimes can’t afford to keep their lights on.” This provision is not in the Fuentes motion. 

Jack Humphreville responded in CityWatch to the proposed ballot measure quickly and decidedly: 

“While these proposals are long overdue, they are not ready for prime time. Rather, these proposals are ‘a great place to start the conversation’ as there needs to be a ‘robust public discussion and debate before any charter proposal gets put on the ballot.’ 

“While the idea of a more autonomous, full time, professional Board of Commissioners is appealing, it is not a silver bullet.  Rather, it may add a layer of bureaucracy that may be counter-productive if the proper ground rules are not established and followed by the politically appointed commissioners who may want to micro manage the Department.  

“There are numerous other questions, including how the Commissioners are selected or removed, their qualifications, and how to prevent the Board from going “rogue” by raising our rates to astronomical levels.…

“Ratepayers must be given a significant role in this committee as they are not only the people paying the bills, but whose votes will be required to approve any ballot measures, including the new Transfer Tax.  This will be an opportunity for the City to earn the confidence of the Ratepayers, who, at this point in time, do not trust City Hall when it involves DWP and their wallets.” 

Retired Transportation Engineer, human rights and labor activist and veteran of the 1999 Charter Reform experience, City Charter expert Yadi Hashemi offers an alternative approach: “Mend it, don’t end it:”

“The establishment of the DWP as a publicly-owned municipal utility and the creation of the civil service system are among the biggest achievements of 20^th Century Progressives. They’re both worth protection and preservation and you can’t preserve the first without the second. 

“As in the past, critics point the finger at the civil service system instead of recognizing management failures and inefficiencies of a bureaucracy that has nothing to do with the civil service system. How in the world did the civil service system prevent DWP from hiring more people? If anything, adhering to the civil service system would result in having a list at hand so that you would be ready when the need arises. 

“Now, it has been a long time and I would have to go back and review the rules. I can imagine people arguing about the need for flexibility in hiring because of special needs, and the fast changing needs of the work place because of technological innovations. However, there is nothing that prevents management from proposing changes to the civil service rules or increasing the number of exempt positions,” Hashemi adds thoughtfully. 

How important is it that the City get the governance and operations of the United States’ largest municipal utility right? 

Is this a privatization proposal? 

What concrete benefits enure to the communities of Los Angeles as a result of owning the largest public utility in the nation? 

Precisely what does it mean to limit political interference? 

Can we all gain from deep, vibrant, aggressive public oversight of our City’s power and water?

Every time a politician or pundit, a rich guy, or a former newspaper editor talks about limiting interference from “City Hall,” he or she means to restrict actual public oversight, to shade the sanitizing light of day. 

Rather than further isolate DWP with an insulated, professional board, its own rules, all the money in the world, no pesky “political interference,” its very own Personnel Department, everything it’s ever wanted except perhaps a completely corporate structure, maybe it’s time to consider bringing the DWP into the rest of the City family. 

Let the City help address and resolve the problems that have persisted at the LAWP for decades.

1. Hiring problem solved. Given the wide wage disparity between DWP and every other City department and considering that the City defines a promotion as a job that pays more, treat every opening at DWP as promotional. The Department can quickly and easily hire the best it can find with minimal personnel work.

If employees moved more readily between DWP and the other city departments, many of its perceived problems would be resolved.

Besides solving the reported hiring problem in fair and simple fashion, this could dramatically improve the DWP’s workforce diversity making it a bit less white and male.

2. Integrate the DWP into the City’s purchasing, procurement, contracting processes to maximize operational efficiency and reap potentially dramatic cost savings. 

3. Consider freeing DWP up to concentrate on the delivery of power by moving all water functions into the Department of Sanitation’s water division. Many cities have one water department. LA does an outstanding job in its collection, processing, and treatment of wastewater. 

4. Explore savings and efficiencies achievable by the integration of common services such as technology, security, tree trimming, street paving, printing, and more. In 2012, thirteen separate city departments trimmed trees. DWP’s trees were among the costliest to trim. This exploration should include employee benefits. Thousands of city workers receive great, cost-effective family benefits at the lowest cost-per-employee of any of the City’s benefit plans through the City’s Joint Labor-Management Benefits Trust. DWP workers could be covered in a city-wide plan, saving millions. 

5. Listen to the Advocates, Neighborhood Councils, council and local political offices, customers, and your own workers. Add a young person to the Board. Broadcast the board meetings on cable TV. Encourage local media to cover them. 

In 1988, I had my first argument with a manager at DWP. I said, “the City” and George Pengaman said, “the Company.” We did that for a while. The City. The Company. It was foretelling. 

Truck drivers in the City wave or nod to each other when they pass each other driving, like motorcycles or new moms (my lovely daughter-in-law Lidia tells me!) But not the DWP trucks.

It is time for the DWP to venture down the hill into the rest of the City, to allow other city departments to help, to embrace the LA in its name and act like a big part of a vital City. And finally…to fulfill the promise of water and power owned by the people.

(Julie Butcher writes for CityWatch, is a retired union leader and is now enjoying Riverside and her first grandchild. She can be reached at [email protected]) Edited for CityWatch by Linda Abrams.