Proposed reform for LADWP


Los Angeles needs a customer-focused utility that provides reliable and affordable water and power to our residents. It is critical to the future of our City’s economy, environment, and quality of life. That is why L.A. Department of Water and Power (LAWDP) reform has been a cornerstone of my administration. Since taking office, we have stabilized the department by bringing in new, reform-minded leadership. We fixed a broken billing system, instituted benchmarking, and shed light on the Joint Training Institute/Joint Safety Institute (JTI/JSI) trusts. We also negotiated a historic labor contract that is saving ratepayers $5 billion over the next 30 years and slashed call wait times from a high of 40 minutes to under 2 minutes. We did all of this while maintaining some of the lowest rates in the region. With the ship on the right course, we can now take the next step.

As we kick off the next phase of LADWP reform I want to share the key principles I’d like voters to see on the ballot in the November 2016 election.

A full-time board with broad authority to oversee the day-to-day operations of LADWP. Volunteer boards have served the department and our city well throughout history. In particular, our current board has helped ensure greater transparency and accountability at LADWP and I applaud board members for their dedication. But if we are going to grant more autonomy to LADWP, we need to ensure an appointed board has clear, streamlined and transparent lines of accountability.
A predictable and research-based ratemaking process that customers deserve. Utilities need to make long-term investments in infrastructure, systems, and people. Rates are important to making these investments, and, with uncertainty about when rate adjustments will come, the department has been forced to make inefficient spending decisions far too often. Rates should be based on need and long range planning, not politics.

An overhaul of the hiring and contracting process. Forty percent of LADWP’s workforce is eligible to retire in the next five years and utilities require new and ever-changing job skills among their employees. The current process simply is not flexible or fast enough to meet these challenges. We also need a contracting system that allows us to be nimble and efficient.

Strengthen the Office of the Ratepayer Advocate. Since first creating the office, we now have the benefit of lessons learned. The Ratepayer Advocate should operate like an Inspector General, with expanded access to information in order to provide the public with the transparency they require and deserve. There should also be more clarity in the role the office plays in a new ratemaking process.

Reform the City transfer policy. The City transfer covers the expenses–such as franchise fees and property taxes–that private utilities routinely pay to the cities they serve. However, we need to hear from a broad cross-section of stakeholders and experts about how to update our policy to be more consistent with a modern utility.
Support our low-income citizens, public schools, and park space. Low-income rates should be adjusted and we should explore authorization of discounts for public parks and schools. We should find a way to help the organizations who deserve our support, and residents most in need.

Ensure public accountability. Maintaining checks and balances within the system is vital as we seek to grant the department broad operational independence. To ensure appropriate oversight and accountability, the Mayor should appoint, and Council should confirm, the utility’s general manager and the board. This allows the public to hold their elected officials accountable for the performance of the utility, but keeps politics away from day-to-day decision making.

I look forward to a thorough public discussion on this critical issue in the months ahead, including thorough review from the City Council’s Rules, Elections, Intergovernmental Relations and Neighborhoods Committee led by Council President Wesson. I will be actively engaged in this process, soliciting suggestions and ideas from stakeholders across the City, and ensuring that all Angelenos have a voice, as we work together to improve our resident owned utility.

Link to Mayor Garsetti’s statement