Editorial: Time for reform at the DWP

Everyone knows about the problems at the Los Angeles Department of Water and Power. Weighed down by bureaucracy, political meddling and cumbersome rules, the nation’s largest municipal utility has had a difficult time meeting the challenges of climate change, drought and an aging infrastructure.

Now, Councilman Felipe Fuentes wants to put a measure before city voters that would dramatically change the way the DWP is governed. Under his proposed amendment to the Los Angeles City Charter, the volunteer Board of Water and Power Commissioners that was created 90 years ago to set policy for the utility would be replaced by a full-time board, whose members would have to meet certain qualifications, such as expertise in utility management, environmental policy, consumer advocacy or finance. Board members would serve set terms, and they could not be removed by the mayor. They would be able to hire legal and analytical staff and would theoretically have the power to decide rate increases, approve contracts and hire general managers without City Hall approval. The goal is to allow the utility to operate with less interference from the City Council and the mayor.

This isn’t exactly a new proposal. As Fuentes points out, this is how the DWP was originally structured under the 1925 City Charter. The citizen commission hired and oversaw the general manager, and the utility was largely independent of City Hall.

On paper that’s still the way it works. But in reality, City Hall keeps the DWP on a tight rein. The mayor picks the Board of Water and Power Commissioners, who serve at his pleasure and who have only as much authority as the he chooses to give them. He hires and fires the utility’s general manager, which has led to a succession of them in recent years. The City Council has oversight authority as well.

In theory, all this political oversight is supposed to make the DWP more accountable. In practice, however, the utility is paralyzed by too many bosses with no real responsibility, overlapping lines of authority and competing political interests. The result is an agency that is slow to respond to crisis (like the billing system debacle in 2013), can’t raise the money needed to upgrade aging pipes and power lines, and can’t hire the workers needed to keep the systems running.

There have been five separate recommendations in the last 16 years to fix the DWP’s governance structure, yet until now there has never been the appetite in City Hall for serious change at the DWP. A report released in December urged Mayor Eric Garcetti and the City Council to appoint a committee to come up with a solution that could be put on the 2017 ballot for voter approval. Fuentes, who said he’d already been studying DWP governance reform for a year, said another committee wasn’t necessary. His motion calls for putting a charter amendment on the June or November 2016 ballot.

Fuentes’ proposal is good start. The DWP is a department badly in need of reform. But a restructuring like this one is all about the details, and the councilman’s initial outline raises some tricky questions that have yet to be answered. For example, the newly empowered board would set water and power rates, but the proposal leaves open the possibility that the City Council could still — and presumably would — assert jurisdiction over major decisions. Is that continuing the problem of political meddling or is it a necessary check on the commissioners and the agency to ensure they remain accountable to ratepayers? Fuentes would eliminate civil service protections for DWP workers and give the DWP, rather than the city’s personnel department, responsibility for hiring and firing workers. The DWP would still be represented by a union and hiring would still have to follow union rules, but would that provide enough protection against favoritism, nepotism and politicized hiring? Also, Fuentes would cap the annual transfer of “surplus” utility revenue to City Hall at 2010 levels, which would mean more money for DWP operations but less money for police, fire and other basic city services. Is that a good trade-off?

These are complicated questions that deserve a full discussion. Fuentes and his colleagues should not hold up proposed water and power rate increases until governance reform is settled. There ought to be a robust public debate before any charter proposal gets put on the ballot.

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