Has DWP changed its infrastructure plans after the Sunset Boulevard break?
People think age is the No. 1 criterion [for replacing water lines] and it isn't. It could be construction techniques, the materials, the corrosivity of the soil. We analyze that and we rate for condition. We had Sunset sonically evaluated within the last two years, and they said there was no problem.
If we suddenly had all the money in the world, we would still be choked down in how much we could do because we're a compact, highly developed city. I can't tear up all these major roadways at one time, so we have to feather in these projects where people can tolerate it. We did about 120,000 feet of water main repair last year and will do 150,000 this year.
We're going to start isolating sections of the system and intentionally pressurize them to see if we can create pinholes to indicate where there may be weaknesses, so we can do repairs in advance. A sewer pipe — you can run in a camera and look around. You can't do that with water pipe at 200 pounds of pressure.
Some people blamed the Sunset break on pressure created by the even-odd watering schedule.
Yes, let's blame conservation for pipe leaks! This was more a reflection of the corrosive soil and [outdated] construction.
Some of the 2009 water rate increase went to infrastructure.
It went for a number of water quality improvements. We're having to cover reservoirs; we're replacing a lot of major lines. We have a water supply plan: recycling projects, stormwater recapture projects, cleaning up local water. We've been lobbying heavily to ensure sufficient funding. There are low-interest state funds, there's bond money. And when you're talking about a basin that's contaminated, a share should be carried by the potentially responsible parties. The San Fernando Valley aquifer, if we're able to clean that up, is fairly good-sized, so it could help support Southern California. It's down to supplying only about 10% of our water [down from more than 50%].
We are going to ask very likely for [water rate] increases next year. Doing so this year under such
Who will pay for the damage from the Sunset leak? Is the DWP self-insured?
We have incident-specific insurance and I'm guesstimating that we will probably pay about $3 million [as a deductible], and insurance will cover the balance. Certainly $3 million isn't a drop in the bucket, but it's better than having made the decision to self-insure when you have that potential amount of damages out there. Everything's a trade-off.
Twenty million gallons lost — maybe 4% of the city's daily use — and a $3-million deductible. You're right that it's not a lot in the scheme of things, but appearances matter.
Customer perception is always critical. We do what's best in our technical analysis of the system. We need to ensure people are aware that's how we're working.
My challenge is, this utility is not skilled at storytelling. These guys, their function is to get the water back on, not to talk.
You have to maintain pressure in this vast system; if you drop under a certain pressure, it allows for potential contamination, and then you're giving boil-water orders to 100,000 people. Because it's 1921 technology, the [Sunset] valve wouldn't close against increasing pressure, so we had to work a series of other valves before we could get the last couple of "turns." People don't see us doing that.
Why not a jazzy campaign to make the public aware? For the drought, what about a public service announcement:
I think things like that draw people's attention, but how much benefit would I get versus how much it would cost?
I think Kim Kardashian has been known to take off her clothes for nothing.
I could probably afford that!
Now and then there's talk of privatizing the DWP.
I've looked at privatization analyses. The advantage of [a public utility] is that we have requirements that our money is spent solely in the interest of ratepayers. Water is a lifeline commodity — this isn't something to make money on. Our rates are required to be cost-of-service. We can only charge what it takes to buy, maintain and hold adequate cash reserves.
Is water too cheap?
In many instances, yes. Many environmentalists will tell you that the problem with water is that it's so cheap it doesn't spur people to action.
Right now [DWP ratepayers] get roughly 800 gallons for three bucks. You can't get compressed air that cheap. Price is always a determining factor on conservation-related behavior. Los Angeles has taken a leadership role in conservation. We already have one of the lowest per-capita consumptions around but there's more to do. One project may not change the world but hundreds absolutely will. In particular we want to be able to impact landscape use. We have a program to encourage people to buy a separate meter [for] landscape consumption.
I think you're going to see more [pricing] tiers — so the more water you use, the greater you pay for it; obviously ensuring protections for lower income folks.
DWP has four Drought Busters — excuse me, a four-person Water Conservation Response Unit — for the whole city. They've given out more than 800 warnings.
I wanted to call them Drought Busters! Four guys can cover a lot of territory. [Water wasters] get educational material, then a warning, then a citation. Most people stop after one [visit].
What about sights that outrage consumers, like city sprinklers watering the streets?
I take pictures and I send them in.
So you're the fifth Drought Buster?
You can't live in this industry without becoming incredibly sensitive. I walk around my [neighborhood] where people have little yards. I have my own little door hangers, very polite ones, I hang on people's doorknobs that say, Hey! I drive my husband crazy because he's brushing his teeth and I'm turning off the water. I said, I can't stand here running a water company and watch you run water while you brush your teeth. He doesn't anymore!
What's your assessment of the DWP unions?
DWP signed a contract that from the city's standpoint was one of the most advantageous ever negotiated: a two-tier pension, pension reform, no cost-of-living raises for three years, salary rollbacks for entry level on a variety of new [jobs], over a half-billion value over a 30-year time frame. I applaud IBEW employees for that deal.
What about the $40 million in the training and safety trust funds? The city has had to go to court for more access to the records.
The trusts were modeled after an agreement between Boeing management and labor because every time you hit a recession, the first things to get cut are safety and training. So I can understand the effort to ensure a consistent revenue stream. New opportunities and capabilities come up all the time that we need to evaluate for our linemen or water utility workers. The trust enables us to do that. It has been audited. This [call for more auditing] is about people wanting to get down to a granular level and challenge certain expenses. Those trusts have value and should be continued.
DWP employees reportedly average 50% higher pay than other city workers.
You know that old saying that you can you can make statistics say anything you want? I don't have a lot of buy-in to those numbers. As an example, not getting cost of living raises at the DWP for three years — where we do have salaries out of alignment, that'll be gone within three years.
Look at overtime. A lot of times, overtime is appropriate. The city has an ordinance: We can't get out there [to do work] during rush hour, so we end up working in off hours that are typically compensated with overtime. You've seen this fuss about pole replacement costs — $25,000 [per pole]. Pacific Gas and Electric [in Northern California] was quick to comment they did theirs for less than half. Sure, when you have a service territory that includes a lot of farmland. Do it where there's 144 communication lines on top! The cost of doing business in L.A. is different, and we're structured to deal with that.
Do consumers need to lower their expectations about water cost and availability?
A bit of both. We live in a desert. It's not going to start raining 25 inches here. And we are continuing to grow. And as much as I can move into stormwater capture and water conservation and recycling — I want to be off imported water by 50% in 2030 — people are going to have to pay attention and adjust their habits.
This interview was edited and condensed from a taped transcript.