MIA on DWP
TOM LABONGE’S OFFICE IN CITY HALL features a life-size cardboard cutout of water baron William Mulholland, the founding father of the Department of Water and Power. Councilman LaBonge is a booster of all things Los Angeles, and he used to work for DWP. A visitor with questions about the Owens Lake Dust Mitigation Project — a half-billion-dollar product of Mulholland’s water grab — might think this is the right place to come for answers.
LaBonge is known more for honoring city guests, organizing the St. Patrick’s Day Parade and helping old ladies cross the street — and less so for his zest for controversial public-works projects. Last Friday, however, LaBonge, a member of the Committee on Energy and the Environment, which oversees the DWP, talked briefly about the Owens Lake project, a symbol of L.A.’s intransigence now plagued by charges of waste and mismanagement. Other council members hesitated to discuss the project given its tangle of scientific, legal and political challenges. LaBonge did not avoid a subject so entwined with the city’s history.
“It would be nice if it were right in front of us,” LaBonge said of the 100-square-mile alkali flat that the DWP refused to fix for years, before spending hundreds of millions of dollars to create a shallow flood zone to control dust — the most costly, least sustainable method. “People ought to know more about where their water comes from.” LaBonge mused about the DWP’s reach, from Arizona to British Columbia. He acknowledged the environmental damage caused by the DWP in Inyo and Mono counties, where the department owns 484 square miles of pristine land. “I know folks in Owens Valley are not happy with us, but there’s a good reason this little pueblo is now one of the greatest cities in the world. It’s because of engineers like Mulholland. If we didn’t own that land up there it’d be full of developers. It would look like the Central Valley.”
When asked about what must be done to address spiraling costs and the alarming amount of water required to control Owens Valley dust, LaBonge replied, “Someone has to get immersed in the subject and make sure things are done right.” He seemed as if he were talking about someone else as he headed for an elevator. “You need leadership, accountability.” Some in City Hall are comparing the dust project to the beleaguered Metro Red Line construction of the 1990s: out of sight, out of mind. “It might as well be underground,” says one council aide. Yet from Mayor Antonio Villaraigosa to Controller Laura Chick to a dozen council offices visited last week, few will discuss the project, looming water-rate hikes or other fiscal problems at the DWP — such as the pension being underfunded by $400 million, overtime costs of $51 million per year and $20 million in annual employee credit-card purchases that go without scrutiny.
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“We have to honor our commitments and stick to our priorities,” the mayor said on Tuesday. “What are your priorities at Owens Lake?” he was asked. “To honor our commitments.”
The L.A. Weekly exposed claims of mismanagement at Owens Lake last October. Soon after, the newly appointed DWP Board of Commissioners and the City Council called for an audit of the massive project. It will be months before the $500,000, top-to-bottom review is done. The project, like most terminally ill patients, has been emitting warning signs for years. Two years ago, the council, which included Villaraigosa at the time, learned of trouble when the city administrative officer warned of a water-rate hike to cover the ballooning expenses. In late 2004, a RAND study of the city’s proprietary departments — the airport, the port and the DWP — recommended that city leaders focus on higher-risk contracts; monitor performance after awarding contracts; balance fraud prevention with more fraud detection; and track administrative and regulatory costs.
Such oversight didn’t happen at Owens Lake. Ex-Councilwoman Cindy Miscikowski recalls testifying before a blue-ribbon task force formed to enact RAND’s recommendations. Chick and Councilwoman Wendy Greuel also testified. Owens Lake was a major concern. “It was an open-ended, fix-it-no-matter-what-it-takes situation,” Miscikowski says. “The city hired contractors. There were no checks and balances and no ceiling for costs. The CAO [city administrative officer] called for oversight of the proprietary departments but council approval was so poorly managed. It set in motion a never-ending money pit with no oversight.”
Indeed, retroactive council approvals for more funding exemplified problems identified by RAND: the council “approves most actions [from proprietary departments], rarely denies any actions, and requests more information for a small fraction of actions.”
Council members try to project a different image.
STEP INTO WENDY GREUEL’S OFFICE and you’ll see a framed Daily News op-ed she wrote hanging on the wall. “City Hall Needs an Attitude Adjustment” is the title of her 2003 column. Chairwoman of the Audits of Governmental Efficiency Committee, she was bemoaning the loss of $47 million because of the state budget crisis at the time. “The focus is to demand more from government rather than raise taxes,” she wrote. Now she sits on the Energy and Environment Committee. Sources say Greuel wants to be mayor someday. She declined requests for an interview. Instead, she offered a generic written statement: “I look forward to further scrutinizing the contract to ensure the project is fiscally responsible and environmentally sound.”
Until recently, Councilman Tony Cardenas oversaw the DWP as chair of the Commerce, Energy and Natural Resources Committee. Cardenas is an engineer and former state assemblyman. A glossy flier in his lobby features a photograph of him wearing a hardhat and orange vest during his 2004 visit to Owens Lake with former DWP board president Dominick Rubalcava. Despite the earnest photo, Cardenas convened an unusually lighthearted special meeting on January 25 to discuss Owens Lake. It was his last act as committee chair. He was the only committee member present. A transcript of the meeting, attended by DWP general manager Ron Deaton, chief administrative officer Robert Rozanski, project manager Richard Harasick, and Jack Baylis, senior vice president of CH2M Hill, the primary consultant on the project, resulted in a CH2M Hill press release deflecting responsibility for the project’s costs while heralding CH2M Hill’s success but limiting its role as “an important component” of the project, “not the biggest receiver of dollars.”
“Has [the project] won any awards?” Cardenas asks, after hearing from Harasick that the project is working “fantastically.” Then, after remarking that CH2M Hill “is not the overall manager,” he blames former DWP general manager S. David Freeman for faulty cost estimates and concludes that the media “sometimes doesn’t do their research.”
Some in City Hall have shown genuine concern. “CH2M Hill did the DWP’s feasibility study and then became the primary consultant — that doesn’t look good,” says an aide to one council member. “It’s hard to tell who is telling the truth and who is not,” the aide said of elaborate attempts to explain why cost estimates were originally so low.
Councilwoman Jan Perry, chair of the Energy and Environment Committee, and Councilman Alex Padilla, a committee member and the former council president, did not return calls for comment.
Council President Eric Garcetti, vice chair of the committee, says Owens Lake presents complex issues that cross jurisdictional lines within L.A. city government. Generations of leaders have grappled with it, he says. “We can’t be solely responsible to DWP ratepayers or solely responsible to the people of Inyo County. But we need to change the way we do business up there. To put this behind us we need a plan and clear objectives.”
Former Councilwoman Ruth Galanter, a consultant in City Hall and a scholar in urban research at Loyola Marymount University, says the council has been too reliant on DWP staff for information when voting on major decisions. “I don’t see anyone thinking in the long term, and that is very bad for all of us. Asking for a report isn’t the same as putting in time to understand an issue. It makes you wonder who is minding the store.”
For now it is Villaraigosa’s commissioners who will travel to Mono and Inyo counties next month for three days of public hearings on air-quality compliance and environmental and water-use issues that are central to Los Angeles’ history — and its future. “All of the board members have flown over the lake and seen the project and seen the dust,” says DWP board president Mary Nichols. “This will not be a photo op.”
Added Commissioner David Nahai: “Maybe the council is content to take a back seat. But Owens Valley is inextricably woven into our existence. We have to break the cycle of dust and lack of trust.”
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