All Charged Up

What it will take to save L.A.�s troubled utility?

Comments (0) By Jeffrey Anderson Thursday, Jan 19 2006

Rewiring should start at the top. (AP/Worldwide)

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IN STRIVING TO SHAPE LOS ANGELES into a great modern city, Mayor Antonio Villaraigosa has set high standards and surrounded himself with advisers and commissioners hailed as “the best and the brightest.”

Villaraigosa’s commissioners at the city’s three revenue-generating agencies — the airport, the harbor and the Department of Water and Power — have made it clear that the city’s stagnant ways of doing business cannot continue if they are to reach the lofty goals the mayor has set, such as a 20 percent renewable energy standard by 2010.

At the DWP, where dysfunction and scandal exposed the worst of Jim Hahn’s administration, Villaraigosa’s appointees face a top-heavy organization riddled with incompetence, cronyism and a compromised civil-service system, according to veteran employees, city managers and high-level DWP sources — hardly the foundation for a sweeping progressive agenda.

His DWP commissioners have acknowledged a creaky infrastructure nearing the breaking point, an erosion of talent and innovation, questionable contracting practices, not enough vision and too much secrecy. “There is no clarity, no fiscal discipline,” says Commissioner Nick Patsaouras. “There needs to be more responsiveness to the customer.”

The board has been aggressive in scrutinizing contracts, lobbying costs and executive perks, such as writing classes and health club memberships. The commissioners say they are curious about a pair of safety and training institutes kept afloat with millions of dollars of ratepayer money that meet in private with little oversight. They have stressed the need to find a way out of the money pit in the Owens Valley, where the city has poured hundreds of millions of dollars into projects borne out of water lust and intransigence.

Radical change is needed, the board insists.

“This board will no longer be in the rubberstamp position our predecessors allowed themselves to be in,” Commissioner David Nahai said before a December 20 board meeting. “Our goal is to be transparent and root out fraud, waste and inconsistency.”

Added Commissioner Mary Nichols, president of the board: “Too much downsizing in the 1990s left the DWP unable to do for itself. We’ll be looking for ways to flatten the organization’s structure and bring in more skilled people. We don’t need more middle management, but we do need more engineering, communications and environmental expertise.”

In announcing their intent to reform the DWP, Nichols, Nahai, Patsaouras and commissioners Edith Ramirez and Forescee Hogan-Rowles have sought help from all corners of the department. Their sometimes harsh questioning of managers about longstanding practices has sent shock waves through the department’s upper echelons. Board meetings have become a lengthy ordeal for some.

Feeling emboldened, employees have been voicing criticism in public, in private meetings with the board’s grievance committee and via written correspondence to the board. Some managers have thanked the board for its curiosity and leadership. Others, like those overseeing the Owens Lake Dust Mitigation Project, have sulked, argued or defended themselves in a way that shows they feel insulted and attacked. Many upper and mid-level managers are deciding to retire. The DWP would not comment for this story.

Now, with space opening up at the top and scores of baby boomers eyeing their pensions, a major reorganization is under way. The board is about to find out what the DWP is really made of. If they follow the path they have laid out — the path of openness, fairness, efficiency and professionalism — they might get more than they bargained for.

Critics of the DWP, including some who left out of frustration, say the managerial ranks are full of employees who leapfrogged over more qualified applicants via patronage and manipulation of civil-service rules, non–civil servants who are underqualified or beholden to political patrons, and managers who have allowed the International Brotherhood of Electrical Workers Local 18, whose members compose 95 percent of the department, to push them around. “It’s not the department I went to work for,” says one former employee who chose early retirement.

“The board is going to put an end to generations of nepotism and favoritism,” says an optimistic high-level source at the DWP. “The civil service was designed to avoid the spoils system, but instead we’ve got demoralized employees and undeserving managers who get insecure and lash out. It breeds resentment and affects performance.”

AT THE DECEMBER 20 BOARD MEETING, Nahai turned his attention briefly to an anonymous letter that breaks down the DWP’s problems into five categories: transparency in the conduct of business, unchecked influence by the IBEW, low morale and productivity, impending infrastructure failures, and improper contracting practices.

“The fact that this letter is anonymous robs us of the opportunity to assess the writer’s credibility,” said Nahai, who has scheduled hearings before the board’s Personnel Relations Committee on January 27 and 31 for employees to testify under protected status about personnel complaints, including allegations of bogus promotions. He and commissioner Edith Ramirez, both attorneys, will preside. “We want people to come forward and not have their careers threatened,” Nahai said. In a telephone interview, he later added, “I don’t know if we will see a trickle or a flood. But I will do everything in my power to see that no one who comes forward will be retaliated against. The journey will take us where it leads, and the chips will fall where they may.”