You can trace the decline and fall of the nation’s largest municipal utility, our very own Department of Water and Power, back to October 1996 when the City Council in it all too finite wisdom vetoed a 10 percent raise for Bill McCarley, a career city bureaucrat appointed general manager by Mayor Richard Riordan.
His pension secure at 75 percent of his $179,463 last salary, McCarley quit and Chief Operating Officer Harry Sizemore was named Interim GM.
Councilman Richard Alarcon said at the time that “salary is not as
important as the person you get. (Approving the raise for McCarley) sends the wrong message. I
just don’t think we ought to be handing out the taxpayers’
money as if we have so much to spend.”
That from a guy who’s under indictment for perjury and voter fraud and has helped to create the city’s budget crisis with his belief that the city’s first priority is to enrich the unions and solve all the problems of LA’s one million poor people.
Thus began a cycle of management chaos that has led to nine temporary or permanent DWP heads in the last decade.
It also opened the door for IBEW union boss Bria D’Arcy to take virtual control of the utility as he filled the vacuum of leadership and extorted spectacular raises and sweetheart buyouts for his members who include all but the very top executives.
Fast forward to April of this year when First Deputy Mayor Austin Beutner took over as interim general manager by Mayor Antonio Villaraigosa and optimistically declared he expected to have a permanent GM in place well before his six-month term was up.
“The first job is finding a permanent general manager,” Beutner told the Daily News’ Rick Orlov at the time. “You cannot expect to have an agency develop any stability when there is so much turnover at the top.”
Things haven’t worked out with regards to hiring permanent general manager — or achieving transparency or credibility for the beleaguered DWP — quite the way Beutner had in mind six months.
Even as DWP commissioners have talked about paying as much as $500,000 in salary to the next general manager, nobody competent and sane wants such a thankless job.
Ever since the power rate hike fiasco last March, the City Council has taken to questioning just about every action of the DWP, recently rejecting a water rate hike and vetoing its decision to stop accepting workers transferred from other city departments because of pension costs.
Given his commitment to transparency, it would be good of Beutner to come clean about how many headhunters he has looking for general manager and how many candidates he’s interviewed and how many utility executives he’s offered the job to, only to be turned down.
In desperation, Beutner has decided to hire himself again, at least for two more months, presumably hoping that Santa Claus will fill his Christmas stocking with a qualified general manager.
It was a year ago that Villaraigosa fired David Nahai, the former DWP Commission president, he had hired as GM despite his lack of experience running a utility of any size, let alone the nation’s largest municipal utility. Nahai was paid $326,686 — nearly twice what McCarley was paid a decade earlier.
In his place, Villaraigosa installed David Freeman, his deputy mayor overseeing the DWP, as interim GM for six months.
It was because of bumbling interference by Freeman and his allegiance to the IBEW that the mayor couldn’t find a permanent head during his entire time in office and had to turn to Nahai.
Truth be told, you can blame nearly all the DWP’s troubles on Freeman.
Riordan fell for Freeman’s resume and good old boy charm and hired him as general manager in 1997 to take the reins permanently from Sizemore, the interim GM. His salary was put at $200,000 — more than the McCarley would have been paid if he’d gotten his 10 percent raise..
Freeman promised to make LA the greenest city in America — a promise Villaraigosa echoed years later — and squandered tens of millions of dollars without generating enough green energy to light a city block. It wasn’t too long before he was fired for disloyalty, more than incompetence.
His No. 2 David Wiggs, who joined the DWP with Freeman after earning $300,000 a year as an outside consultant, took over. but he soon became ill and his No. 2 Frank Salas became interim GM about the time the scandal over DWP’s public relations contract erupted.
By then, the DWP management was demoralized and confused by the incessant changes in policy and direction every time a new boss came in.
So Ron Deaton, the Chief Legislative Analyst who had amassed more power at City Hall than anyone in years, was sent in to straighten out the mess. But he too became ill and the search was on for a replacement.
It wasn’t so easy with Freeman skulking around so Raman Raj became the on-again, off-again interim GM after Freeman, after Nahai, and briefly after Freeman again.
Raj had bounced around in a lot jobs and needed to file for bankruptcy to bail himself out of financial trouble in the early 1990s but Freeman and the IBEW loved him so he became part of the
His six months are up next Wednesday so the DWP Commission he oversees as first deputy mayor has put on its agenda for Tuesday as Item 9 “Extension of Appointment and Compensation of Temporary General Manager.”
His appointment is for “up to two months, pending appointment of a permanent general manager.”
The mayor might be wise to keep Beutner in place for a lot longer since he’s only $1 a year as first deputy mayor. He doubled his salary as interim GM for six months and will get a third dollar for his extension.
Obviously, a man who made a fortune as an investment banker, doesn’t need the city’s money.
But the next permanent DWP general manager surely will shake the city down for a lot of money and an iron-clad contract with a handsome payoff when he’s fired in two years by the next mayor.
Even then, after a year of interim GMs and more than a decade of chaos, why would anyone sane and competent want the job?
No one has for a long, long time. There’s just too many problems.
D’Arcy runs the place. Workers drink on the job and go to strip clubs. The public is fed up with the endless rate hikes, ripoffs, bursting water pipes, power outages and all the other nonsense — so fed up that Council members are afraid their will be a voter backlash that takes them all down.
Maybe the answer is to keep Beutner on the DWP payroll full time. After all, it will only cost us a dollar now and again.