Ron Nichols announced his resignation Thursday as general manager of the Los Angeles Department of Water and Power, which is struggling through a pair of public-relations debacles.
Despite repeated demands from elected officials, Nichols has been unable to produce records showing how two nonprofit trusts created to help improve relations with the utility's largest union have spent more than $40 million in ratepayer money over the last decade.
Nichols also has been unable to adequately explain to elected officials, including his boss, Mayor Eric Garcetti, what those trusts have accomplished, even though he has co-managed them with the union leader for the last three years.
And Nichols has taken heat for a new $162-million computerized billing system that sent as many as 70,000 late or inaccurate bills to customers in recent months. In some cases, the system erroneously withdrew large sums directly from customer's bank accounts via an auto-pay function.
"I thank Ron for his service to our city as head of a department that serves every L.A. resident and business," Garcetti said. "I'm focused on continuing to reform the DWP to cut costs, improve customer service and increase transparency."
While most public utility jobs are about as vanilla as government work gets, the head of the Los Angeles DWP, who is charged with managing an agency with the most politically powerful labor union in the city, is never far from controversy.
Nichols became the agency's sixth general manager in five years when former Mayor Antonio Villaraigosa hired him in early 2011. His three-year tenure put a temporary end to the revolving door and brought a period of relative stability to the nation's largest water and electric utility.
But the ground beneath Nichols' feet began to shift dangerously when his agency's biggest union, the International Brotherhood of Electrical Workers Local 18, threw their support and about $4 million in campaign cash behind Garcetti's chief rival in the 2013 mayoral race.
Not surprisingly, Garcetti made reforming the DWP a central issue of his campaign. Nichols' departure, on Jan. 31, will give the new mayor a chance to install an ally at the helm of the city's most high-profile agency.
The mayor's office has not indicated who will replace Nichols, but a source close to the deliberations said it will most likely be someone from outside the agency.
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