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Fri, Mar

Mayor Bass, Before Attacking the DWP, Look In the Mirror

EASTSIDER - First, let me give our new Mayor a break regarding her letter to the DWP treating it as if it is a LA City Department.  It isn’t. 

Maybe staff members have failed to spell out what a “Council Controlled Utility” really is, with a history going back to the days of Mulholland. They might also tell her how Mayor Garcetti interfered with the DWP for most of his terms, resulting in budgets and delayed staffing that resulted in something like the pole problem. 

Here’s a hint - If you think that the delays in fixing/replacing power poles are bad, you should know that the replacement cycle for those pipes underground is well over 100 years!  The reason in each case is simple - The Mayor, who appoints all of the DWP Board of Commissioners, is simply not going to give them the go ahead to raise rates enough to fix the problems anytime soon, out of the fear of backlash when Angelenos started to see new, much higher,  bills.  Period. 

Staffing and Poaching

Way back in 2017, an audit of the DWP highlighted the problems that Mayoral control interfered with the ability of the DWP to run an efficient operation. You can read about it here. 

“The major finding of the audit, that made headlines in the LA Times, was the one about DWP training program has high costs and low graduation rates, audit finds. 

The other major finding tied in with this, was that many trainees leave the DWP after completing the program, lured by better deals from other Utilities. 

I have no doubt that the data supports these findings. What this actually means in the real world, however, is another thing entirely. I believe that the training costs are well spent to train employees in a very hazardous business -- the reliable delivery of power to us under any and all adverse circumstances.”  

and 

“The three major complaints in the Audit relate to the length of time that it takes to train these power system employees (up to 42 months), the dropout rate (about 67% for Line Worker/Cable Splicer), and the fact that a lot of successful employees are hired away from DWP by other Utilities such as Southern California Edison.” 

That conundrum resulted in a budget/contract deal with the IBEW that tried to offset the flaws in a previous Mayor/Council imposed agreement. 

” I think most people have forgotten (or didn’t know) that in their prior multi-year agreement, the IBEW settled for a flat, or in some cases reduced, set of wages and benefits. The first three years of the four year deal provided for a 0% increase each year, with a 2% increase in the final year. That same agreement provided for a Tier2 Pension Plan for new hires, with 10-year vesting, and marginal portability. Not to mention (hat tip, OPA) that a number of classifications had their entry level salary actually reduced.  

As further background context for the current negotiations, in 2015, power-related costs represented 39% of revenue and 58% of controllable cash outlays by the utility. On the water side, the figures were 55% of revenue, and 52% of controllable cash outlay. 

This new 5-year agreement calls for a 3% COLA (cost of living adjustment) raise in September of this year, and an additional 1.5% increase in December. Thereafter, in October of 2018, 2019, 2020, and 2021, employees will receive raises based on the Consumer Price Index (CPI), with a minimum of 2% and a maximum of 4% for each year, using a standard set of CPI measurements. And, oh yes, there is the possibility of reducing the 10-year vesting period for the Tier 2 Pension Plan down to the public sector standard of 5 years. 

That’s it, except for a very few inequity adjustments, such as for the Line Workers, as I have previously written about. For this group, even City Controller Ron Galperin has admitted in his audit that there are significant training and retention problems. 

Actually, the whole article is worth a read to understand the contract negotiations process that the DWP faces, as opposed to the relatively straightforward private sector process of the big utility companies in California. 

Some of these issues were addressed in the 2022 negotiations, but the ability to hire and retain employees remains as a sore point. 

Beneath the Rhetoric

So let’s parse the Mayor’s hopefully inadvertent double speak.  From the first part of the Mayor’s letter, it requires DWP to: 

1) Commit to complete repairs to the utility poles in need of immediate repairs (Priority One) by May 16.

2) Commit to and make public a schedule to complete the Priority 2 pole repairs  per the California Public Utilities Commission regulations and orders.”

3) Institute regular reporting of pole inspections and repairs   

4) Report weekly to the Mayor’s Office on progress 

Maybe the Mayor is unfamiliar with the twisted relationship between her office, the City Council, and their straight jacketing of the DWP so they cannot operate as an independent utility. No matter, this is predictable politics, separating the Mayor from whatever perceived misdeeds the DWP has allegedly committed. 

I do have to point out that having the Board members that you appointed excoriate Marty Adams (the General Manager) is bad form. Further, if he decides to say ‘enough, I quit’, you would leave the millions of ratepayers in Los Angeles SOL. 

Longer Term Demands

The next set of demands in the Mayor’s letter are pure hyperbole, as in “an extravagant statement or assertion not intended to be understood literally”. In this case they were; 

a) Retain outside experts to advise on necessary reforms within LADWP to achieve these goals 

We’ve been here before.  Outside experts translates into spending a bunch of money to have outside consultants create a whole set of recommendations which will never be adopted for the simple reason that the City of Los Angeles will always insist they they are in charge, like the Mayor appointing all of the DWP Board.  If they were ever serious, they would allow the  DWP to function as an independent entity, as in a separate utility. 

(b) Expand and elevate  its risk management functions with a focus on safety of the public and workers 

How about the Department and its employees fix the damn poles before wandering into the weeds? 

(c) Create a truly independent Inspector General. 

God save us.  Does anyone remember Garcetti’s try at this.  I wrote two articles at the time.  The first one in 2019 had the heading The DWP Inspector General Announcement: Garcetti’s Pitiful Head Fake. 

“So, looking at the governance of the Department of Water and Power, here’s the deal. It has a Commission, all appointed by the Mayor, and a General Manager, also appointed by the Mayor. Its lawyer, by statute, is the City Attorney of the City of Los Angeles, currently Mike Feuer. 

When we pound on the DWP, remember who we are really challenging. Mike Feuer, the legal genius who choreographed the fixed DWP billing litigation. And who then dropped the DWP lawsuit against PriceWaterhouseCoopers, with no cause other than his personal embarrassment. 

I have no idea if David Wright, the most recent General Manager to depart under a cloud, is dirty or not in the whole rigged DWP Billing debacle. What I do know is who appointed him, and who his attorney was. 

So, if anyone wants to believe that establishing some bullshit Office of the Inspector General for DWP is going to make everything better, I have a great deal for you on PG&E Stock. 

It’s a crying shame. The DWP is a great engineering company, our rates are competitive, our power and water are reliable, and there are a lot of lifetime employees who do a wonderful job. All that an Inspector General is going to accomplish is to pit people against each other in an adversarial series of investigations that will simply cause a lot of them to retire or refuse to talk to anyone and spend their time protecting their job. And I can’t blame them.” 

The second article was in 2020, and you can find it here. 

“In fact, there are three things that would go a lot further to help ratepayers, and they wouldn’t even cost much money. 

First, make sure that supporting documents for DWP Agendas are available to the public for a reasonable time period before the Board Meetings. Second, there needs to be a firewall between the City Attorney and DWP’s Attorney. No City Attorney should be directly in a position to decide who gets hired as the DWP’s attorney in litigation, and then decide how that plays with the City’s attorney in the same litigation. 

Also, we need a firewall between the Mayor, and the DWP’s General Manager, and Board. Hire/appoint them, cool, but then keep your cotton-picking hands off the scale, unless you really like personal flack when you get outed in a big case. 

So. I believe that the whole idea of an Inspector General overlay to the DWP is in fact a sleight of hand which simply puts another layer of government in place without addressing the real reason the Mayor came up with the idea -- a dereliction of duty to the ratepayers by the Mayor himself, as well as the elected City Attorney for the City of Los Angeles, Mike Feuer. 

And think about the effect on morale within the DWP staff. They get paid to provide us with reliable power and water at a reasonable cost and do one hell of a good job. Don’t mess up their morale.” 

The Takeaway

I actually feel sort of sorry for Mayor Bass. After all, she is new to all this DWP stuff.  On the other had, she voluntarily inherited many of Eric Garcetti’s staff, and those people have no excuse for failing to share with her the historically troubled relationship between the Mayor and the DWP. 

Let’s be honest. A major reason the DWP has never been fully staffed, and simply cannot turn on a dime, is the fact that it is a “Council Controlled Utility”. As a result, they are always budget challenged by City Council politics. 

Maybe it’s time to consider making the DWP an independent utility that simply provides water and power to Angelenos, without the political interference of a Mayor and 15 City Council members. Any one want to make a bet on that happening?

(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.)