L.A. DWP flushes $40 million down the drain

 

Remember the good old days - before billion-dollar bailouts and trillion-dollar deficits - when $40 million sounded like a lot of money?

If you earned $40 million, you were on top of the world. If you lost $40 million, you were a bum. And if you sent $40 million to two non-profit groups to try and cozy up to your largest employees' union, only to have that money vanish without so much as a receipt, you were the Los Angeles Department of Water and Power.

That $40 million, incidentally, was ratepayer funds - all of those checks mailed in and electronically processed from your more than 4 million customers. L.A. DWP is the largest municipal utility in the United States and yet it has managed to let all that money walk right out the front door.

The Joint Training Institute and the Joint Safety Institute - both controlled by DWP managers and union leaders - have received up to $4 million per year since their creation more than a decade ago. This, despite a recent painful round of job cutbacks at the agency, has critics up in arms demanding a full accounting of where this ratepayer money ended up and what was it being used for.

Nobody at DWP seems to know the answers to those questions. These are public funds, paid out from the bank accounts of the agency's customers, and it sounds like those customers are getting fleeced by this government-run, bureaucratic monstrosity that has grown too big and too powerful for its own good.

According to the limited records provided by DWP under the California Public Records Act, about $1 million per year has been used to pay salaries of a handful of administrators running these non-profits. Federal tax records indicate the two non-profits spent more than $360,000 on travel between 2009 and 2011.

The whole mission statement appears to be improving relations between the DWP and Local 18 of the International Brotherhood of Electrical Workers. City records show the two non-profits are supposed to "identify" safety and training as core values at the department, and to promote "communication, mutual trust and respect," between DWP managers and the union.

There are plenty of ways the imagination can interpret what "improving relations" with a labor union can entail - and $40 million can buy an awful lot of improvements, apparently.

Jeff Millman, a spokesman for Mayor Eric Garcetti, told reporters the mayor plans to meet with DWP managers soon to discuss the issue. "This is ratepayer money and they need to account for it," Millman said.

A lack of openness in the expenditure of public dollars is an invitation to suspicion, Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC, told reporters. "It's entirely possible there's a legitimate explanation for how the money is being used," he said.

"Until that explanation is provided, though, the logical assumption is that they are hiding huge amounts of ratepayer dollars off the books for no discernible gain."

Trust us, there is a discernible gain. It's all about politics and gamesmanship and backroom wheeling and dealing. It was the electrical workers' union, after all, who became a major player in the most recent mayoral campaign - spending millions unsuccessfully to elect Wendy Greul over Eric Garcetti.

Garcetti responded by campaigning to rein in DWP's spending on employee salaries and benefits. DWP workers averaged more than $100,000 in salary, overtime and other payments in 2012 - earning 50% more than the salary average for other city workers.

The DWP has also come under criticism for its generous paid sick time rules. Department policy allows for up to 10 sick days per year, but practically speaking there is no limit and the rule has not been enforced for decades. Employees were paid out $35.5 million for extra sick days since 2010, according to a Los Angeles newspaper report.

Now we have these shadowy non-profits taking in ratepayer dollars but not showing any reasonable return on this "investment." Oh sure, they claim to be advising DWP on "training" and the industry's best "safety practices," but an online report posted in 2004 on the need for "ergonomic training" and a proposal for a "defensive-driving fair" for agency employees should have cost less than $40 million. Don't you think?

Big government, and big government agencies, take ratepayers' money and line their own pockets with it. They take expensive, unnecessary travel junkets. They help themselves to expensive concert tickets and seats at baseball games. The last thing they are interested in is safeguarding the trust of the public funds they have been given.

It's just another $40 million flushed down the drain. We should all start remembering those days when we recognized that was a lot of money.

 

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