L.A.’s public utility, seeking yet another rate increase, has become a monument to avarice

By Charles Rappleye

Utility managers are plugged into your piggybank

Utility managers are plugged into your piggybank

So the L.A. Department of Water and Power is seeking a rate increase. Not a small one, either: 4% a year for each of the next five years, regardless of inflation.

Sounds like most of what we hear from the DWP. Charges going up, salaries going up, employment going up — never mind the financial constraints of the citizens “served” by the runaway agency.

Like a true monopoly, the DWP sets prices and does as it likes.

You know the DWP litany of arrogance and excess, yes? But it’s worth review, just because it’s so extraordinary.

Consider, for starters, the salaries paid at the department. You can find them posted on the website maintained by L.A. City Controller Ron Galperin. (At lacontroller.org there’s even a handy button that will take you to a portfolio of data on the agency.)

Start at the top, where the view is truly breathtaking. The salaries commence at $350,000, for the director, and then settle in at the high $200,000s for managers and assistant managers and accountants — now there’s a challenging job! — until drifting gently on down, still well above $200,000, to such high-falutin positions as Executive Assistant to the General Manager — three of those — and the nine Electrical Systems Managers.

Mind you, these are just the managers. The staff at the DWP does just fine, too, with the department-wide average topping $100,000. Six figures, baby. Hard to even conceive, a pay scale like that.

For what it’s worth, by way of comparison, the national average wage for an electrician is $56,000, according to the federal Bureau of Labor Standards. Electrical engineers earn $100,000; at DWP they can expect double that. And with overtime and other perks, annual pay for “top earners” at the DWP routinely tops $300,000.

Maybe you don’t find these figures so funny. Especially if you pay bills to the DWP. But you can’t help but appreciate some of the laughers that the department has served up in recent years. Like the $50,000 the agency paid to a psychologist in 2010 to mediate between two feuding managers. Or the exposure two years back of $40 million siphoned off to fund two “trusts” set up as “training” entities. Once exposed, the officers of the principal DWP union opposed any attempt by city officials to rein
in the trusts, or even to routinely audit their books.

But city auditors pressed on, and found what has to be termed egregious misconduct: Operating out of offices in far-flung Sunland under conditions of “near secrecy,” the trusts spent money without soliciting bids, paid executives “far in excess of what other California employees get for doing the same work,” performed duplicate functions that squandered close to $1 million dollars, and issued credit cards without spending controls. Moreover, the trusts piled up excess income of more than $10 million, which was stashed in sequestered accounts — presumably for unanticipated future emergency party supplies.

And what did the managers at the DWP have to say about all this? Nothing, really. They left it to the head of the agency’s principal union, Brian D’Arcy of the IBEW, to thumb his nose at city officials and the press, denouncing his critics as “right-wing apparatchiks.” That was wrong, of course. More accurately, his critics are chumps and dupes, elected officials whom D’Arcy knew would never call his bluff.

Rather than hammer on the operators of the agency, the city decided to hire a fancy consulting firm — based in London, of all places — to analyze how the department might control its spending. The result? The city should approve the rate hike. As to DWP spending, the consultants found, “in the near term there are not significant opportunities to reduce costs.” These gumshoes did manage to discern that DWP salaries “are significantly above those of their peers,” but found that any cuts would require “leadership and cooperation from city management, LADWP and its labor unions.” In other words, fuggedaboutit.

Just a disgrace, really. And especially when you consider that the department was created back in 1914 as a Progressive Era response to high prices charged by private utilities. “Public power” — power for the people and not for profit — was to be transformative; one meaningful, concrete step toward a civic establishment grounded in the public interest.

As with so many early-20th century reforms, the gains from public power proved more incremental than revolutionary. Women’s suffrage did not change — much — the course of American democracy. Public education soon bogged down in public dysfunction. And public power?

Modest gains, at most. Today, nationwide, public power companies charge an average of 14% less than private utilities, and pay more in local taxes.

But not in Los Angeles. Here public power has become a redoubt for lucrative sinecures, private squabbles over public spoils, and blatant gold-digging. Union stooges like D’Arcy will still mouth the tropes of class struggle, but that’s all smoke.

What’s really going on at the DWP long predates the Progressive Era or even the union movement. It’s a simple matter of greed. Managers and employees at the city utility have found a safe haven from the economic storms buffeting the city around them, and they will take all they can, as long as they can. And we will pay for it.