Is DWP Change Really Possible? Here’s What They Said at the Reform Forum

“The City Came into Being To Preserve Life, It Came for the Good Life” – Aristotle, from the walls of the Tom Bradley Room atop City Hall, quoted by Mayor Garcetti in his opening remarks at the PBI DWP Reform Forum.

DWP is personal to me. Since the first time I went to represent a worker at the then GOB in 1988, the building speaks to me. Images of “Chinatown” flash by, that blue wall still gives me the shivers.

I went with my Don, my husband, to file his retirement papers at DWP’s now JFB earlier this month. Look, dear, there’s the first place you cussed me out! Isn’t it romantic?

I walked those halls for years. I bargained for the DWP Security Officers for many proud years, way back to that time when Enrique Hernandez, then a member of the Police Commission, promised that his private security contracting company would, of course, provide benefits for the low-wage security “guards” he (and Mayor Riordan) wanted the DWP to employ, before the Living Wage Ordinance.

I used to love to drop in on Roger Brennan late in the day. He was fun; he solved problems; and I could see the traffic going north on the 110 from his office.

As I wrote in City Watch, I had my first argument with a manager at DWP in 1988. I said, “the City” and George Pengaman said, “the Company.” We did that for a while. The City. The Company.

The LADWP is the only city department that uses a “.com” for its email addresses.

The DWP Reform Forum organized by the Pat Brown Institute’s Raphael Sonenshein and CSULA held on March 29, 2016 and held perhaps ironically in the Ronald F. Deaton Auditorium began with opening comments from the politicians.

First, the Mayor: Things are moving in the right direction in LA. We’ve still got the cheapest rates and our utility does many things right. In my first year as Mayor, we secured pension “reform” at the DWP. To “shine light on where the money went,” we’ve added the Office of the Ratepayer Advocate. However, as 40% of the workforce will be eligible to retire in the next 15 years. this is our “second Mulholland moment,” and we will be going to the voters this fall. “You’re either a small ‘d’ democrat or you’re not,” said the Mayor.

City Controller Ron Galperin took us back to 1902 when the City’s water and power company was private and the headlines of the day were of corruption and excessive rate hikes. As his office’s recent audit concludes, the DWP provides high quality water and reliable power at competitive rates. Yet to Galperin’s point of view, it is a “miracle that things get done.” He wants to unchain the bureaucracy – at DWP and throughout the City, to get “the politics out of DWP,” to ensure accountability, and to avoid unintended consequences and chaos. Galperin advocates an open process that empowers ratepayers.

Councilmember Felipe Fuentes, the main proponent of the instant effort to “reform” the DWP, wants to bring a DWP “reform” charter amendment to the voters in November of this year. He bases his initiative on the belief that the primary operating principle at the utility must be a “fiduciary obligation to the rate base.” His proposal would “professionalize” the commission with full time members free of fear of removal. He’d “divorce” personnel matters from the rest of the City, provide independent legal and policy analysis for the Board, streamline the process of approvals from City Hall. “I don’t want to rubber stamp every decision, especially when we can only confirm or deny and send it back.” He’d retain the opportunity for the Council to assert jurisdiction somehow. Finally, Councilmember Fuentes seeks to “remove politics” from City Hall while wanting to ensure more focus on customer service.

PBI Director and charter historian/participant Professor Raphael Sonenshein enthused about the Institute staff’s organization and the good turn-out for the forum and reminded the amassed that “nothing in the City Charter can be changed without a vote of the people.”

Sonenshein introduced the panel: DWP General Manager Marcie Edwards, who started at DWP as a clerk/typist in 1976, promoted through the organization, left to run Anaheim’s utility, became their City Manager and returned to DWP as the 11th GM in 15 years; Tony Wilkinson, Neighborhood Council activist and Chair of the quite effective Neighborhood Council DWP Advocates; and prominent Los Angeles attorney, Chair of the Appointed Charter Reform Commission, George Kieffer.

“The first question you’re gonna get when you go to the doctor is: What’s wrong?” Sonenshein asked the panel to start. What exactly is the problem this reform move seeks to solve?

Marcie Edwards responded that for her the number one issue is her inability to make productivity improvements. “I need permission from 100 people to buy a box of pencils,” she said. There are problems with procurement and hiring – routine purchases my contemporaries in Sacramento can make easily here require numerous approvals. Personnel is concerned about “parity and opportunity,” and that’s great but it took two months to hire customer service reps and our wait times peaked at two hours. We have specialized jobs, we need to “import industry experts,” and we need more flexibility in hiring.

Tony Wilkinson’s top priority for reform is the need to address issues of managing and governance of the Department. “Too many parts of City government” have a hand in the workings of the utility. A full-time board may make sense provided “someone is willing to give up power.” Who’s willing to give up power for: Rate-setting? Bond indebtedness> Hiring? Legal matters? Contracts? Is it a fiduciary board or is it a managing board?

Sonenshein attempted to put the cliché “too many cooks in the kitchen” in Wilkinson’s mouth but experienced Neighborhood Council folk understand municipal nuance better than most, and Mr. Wilkinson respectfully summarized his opinions in knowledgeable detail.

George Keiffer: There’s a huge disconnect between authority and accountability – every play is second guessed by the owner in the box and the manager is held to account without having the power to execute the plays. Levels of contracting approval should be increased, perhaps to $5 million; the hiring of the General Manager should be approved by both the Mayor and the Council.

Wilkinson: Rates should be set primarily by the Board but the elected officials need to have oversight and should be able to veto the Department’s actions with a vote of a super-majority. This would de-politicize future rate increases.

Wilkinson gave a shout-out to Ron Deaton and the clever brilliance of the language of the MOU between LA’s Neighborhood Councils and the DWP which requires 120 days notice of any rate change. “Once we know, everyone knows!”

Keiffer: The Mayor should appoint the Board; there should be no ability to remove the commissioners; there should be seven of them and they should serve staggered terms. The commission should hire the General Manager and s/he should report to the board. I wouldn’t give staff to the board members. Increase approval levels – get politics out of the process and focus on the mission.

Edwards: Increase the role and scope of the Ratepayer Advocate. They can always be counted on to be responsive to the ratepayers.

When the floor opened for questions, most of the comments from community members were about the rates, the increasing of rates, service problems, communities that feel underserved. Some raised questions about the millions in Joint Labor-Management initiatives (“these issues can only be resolved through negotiations with our ‘labor partners’”) and the lack of available opportunities for residential solar power.

There was some discussion about the parties to bargaining with the panelists asserting that Department management is not involved in negotiations.

In response to questions about privatization, Marcie Edwards responded: “Contracting out can be cost effective…DWP plans to do that.”

One commenter expressed concerns about privatization: An executive can make a snap decision but that doesn’t make it right. I’m worried about privatization and about the vendorization of the DWP.

Edwards expressed opposition to the privatization of water, claims she doesn’t know what “vendorization” means.

Wilkinson: There’s always a temptation to sell the power system and that’s why we need to make DWP run as efficiently as a private business.

Keiffer: Concerned that in the future there’ll be pressure to sell if we don’t make these changes now.

From the audience, Nick Patsaouras stood to advocate for the “Inspector General” portions of the responsibilities of the Ratepayer Advocate to be added back in, to “oversee a $5 billion” enterprise.

The Pat Brown Institute organized this forum as Fuentes and the other politicians scurry and maneuver to get a charter amendment on the November ballot to “reform” the DWP.

It’s unclear why this is urgent for Fuentes.

It is even more unclear for the Council President who, it is reported, was unaware that the discussion regarding DWP “reform” aimed for the November ballot. At a March 16 luncheon organized by public affairs consultant Emma Schafer, Herb Wesson reported that “neither he nor other elected officials are to blame for the troubles of the Department of Water and Power.” As reported by Bill Boyarsky in LA Observed, Wesson continued: “Maybe we had something to do with it. But the way the department is set up now, it is set up to fail.”

Wesson chaired the March 3, 2016 special meeting of the Council’s Rules & Elections Committee in the Valley where he heard the clear, passionate, brief testimony of DWP Security Officer Fred Milhado: We’re proud to protect your water and power. We fear this is an attempt to privatize more security, to add more contractors who aren’t trained or committed to protecting our utility. As an active member of SEIU’s Labor-Management committee with the DWP, I urge you not to get rid of civil service protections for the workers.

At that same hearing, Councilmember Marqueece Harris-Dawson listened closely to the testimony of Traffic Officer Charles Harrell, particularly as Harrell described growing up in Los Angeles, his Dad, Aunt, and three Uncles employed by the Department of Water & Power. “My dad raised seven kids on a DWP salary,” Harrell told the committee, “and it’s important to keep DWP as a City asset.” The Councilmember responded later in the hearing that he knew what it meant to be raised in such a household.

At the PBI forum, Edwards made casual comparisons between “investor-controlled” and “customer-owned” utilities, noting, for instance, that “investor-controlled” operations spend more money on public relations functions.

Fuentes’ urging that the only metric worth evaluating is the “fiduciary obligation to the rate base” tells only part of the story. It is a municipal asset, and the City must demand and expect benefit to accrue to the entire City. It is also an employer, part of the City’s second largest. No private employer will do better.

Right now, the DWP is more male (79% – the entire City’s workforce is 72% male) and whiter (34%) than all but LA’s sworn departments. For a very long time, the Department has sought to isolate itself from the rest of the City, to everyone’s mutual detriment. Countless attempts, many successful, have narrowed classification titles to tie them exclusively to the utility. Look for job names like Utility Manager, the whole classification scheme of UMA’s and SUMA’s (the “U” being for Utility). Years ago, the DWP attempted to gain recognition for a job class it wanted to call “Utility Equipment Operator.”

Los Angeles County lets each of its departments do its own hiring and manage its own personnel operations. The LAPD would love for sworn police officers to do this work “like they used to.”

Wage discrepancies between all other city departments and the DWP are real and unjustifiable. The City and the Department have exacerbated the problem by bungling negotiations over issues of pension reciprocity, further limiting workers’ ability to move in and out of the DWP as they do into and out of every other city department.

Moves to “divorce” personnel work from the City’s Personnel Department (a department not only committed to “parity and opportunity,” as characterized by Ms. Edwards, but which walks the walk; the Personnel Department is the City’s most diverse (80% non-white, 70% female). It would be a big mistake to move workers out of the civil service system, hired and fired by a personnel operation entirely controlled by the DWP itself, further isolated from public or political scrutiny. Lists of serious discipline which now appear routinely on the published agendas of the City’s Civil Service Commission will disappear from public view. None of this solves the myriad problems at the DWP, gets us no closer to renewable and greener energy, saves money for the City, the DWP, or the ratepayers.

In his comments at the March 30 forum, Councilmember Fuentes gave fleeting mention of “unicorns” in city government. The first, he said, is the “one-day appointment.” He claims to not know what that is and to have “never seen one.” (The good news about this remark is that it likely means he’s trying to help his staff find city jobs. Good for him!) The other “unicorn” he mentioned is the “if I can only get to Water & Power” one. Not sure I understand the relevance of the reference but I’ve got another unicorn for his list: How ‘bout a politician that leaves office to spend more time with his family? ‘Cause that’s something I’ve never seen!

(Julie Butcher writes for CityWatch, is a retired union leader and is now enjoying Riverside and her first grandchild. She can be reached at juliejbutcher@gmail.com) Edited for CityWatch by Linda Abrams, published in CityWatch March 30, 2016

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