Nichols Quits Under Fire as Head of DWP

After weeks of battling with Mayor Tom Bradley, Department of Water and Power General Manager Norm Nichols voluntarily resigned Tuesday, saying the giant city-owned utility was becoming a “political playpen.”

“We know of too many instances where politically motivated agendas have replaced sound business judgment,” Nichols said in his letter of resignation to the DWP Board of Commissioners. “I cannot manage this business wherein political considerations are paramount to prudent management decisions.”

Nichols, 55, said in an interview with The Times that he felt political pressure from Bradley’s staff in recent months and particularly since April, when he initially opposed Bradley’s plan to implement mandatory water rationing.

The City Council is scheduled to vote today on the mayor’s proposal requiring water customers to reduce their consumption by 10% or pay fines.

Nichols said he quit because he felt the agency was under siege. “I saw that it was going to be an issue-of-the-week scenario,” he said.

Earlier this month, Nichols was publicly criticized by Bradley and City Controller Rick Tuttle for what they said were excessive spending for charter jets and DWP tours.

“The employees of this department . . . do not deserve to suffer the distraction and publicity associated with the continuing effort by the mayor and the controller to use the department for their own personal aggrandizement,” Nichols said.

Bradley said Nichols’ statements “clearly indicate that he is out of step with the people of Los Angeles.

“The people demand that our environment be protected and that public money be spent efficiently,” he said. “Mr. Nichols apparently failed to recognize these fundamental facts of Los Angeles life.”

Said Tuttle: “Mr. Nichols blames me in part for his difficulties. In fact, Mr. Nichols has been the architect of his problems. He was unwilling to change his practice of traveling on charter flights at an exorbitant cost to DWP rate-payers.”

City Council members and DWP commissioners were split in their reaction to the sudden announcement. Nichols, recognized as an effective manager and strategic planner, also was seen by city officials as aloof, arrogant and unwilling to bend to political considerations.

City Councilman Zev Yaroslavsky immediately called for a full council hearing on Nichols’ allegations of political intrusion at the department. “Mr. Nichols made some serious allegations in his letter of resignation,” Yaroslavsky said. “The council feels that he owes it to the City Council and to the people of Los Angeles to tell us more specifically what he is referring to.”

Bradley said it was not enough that Nichols ran “the best public utility in the nation.” He said Nichols also had to understand that the mayor “is elected as administrator of all city government.”

Bradley acknowledged that he had no differences with Nichols until April, when the general manager initially balked at endorsing the mayor’s rationing plan.

Bradley and Nichols agreed that he was not asked to leave the post that pays $151,359 annually, second only to the manager of the Department of Airports in salary.

Nichols, who was appointed general manager by the DWP commissioners in 1988, said his decision to leave after 33 years was not a “knee-jerk reaction” to Bradley’s tongue-lashings about expenses.

His decision, he said, was one of great personal anguish that simmered for months. And Nichols said he hoped his exit would refocus attention on the need to keep the DWP independent of political interference.

“I would hope customers would ask, ‘Hey, where’s this going to take us?’ ” Nichols said.

The DWP, with more than 11,000 employees and an annual budget of nearly $3 billion, is the nation’s largest municipal utility. It provides water and electrical power for more than 3 million city residents and contributes more than $100 million a year to the city’s general funds. In California, only Pacific Gas & Electric Co. and Southern California Edison Co. are larger than the DWP.

Bradley made it clear that he plans an aggressive environmentalist agenda for the DWP and that Nichols was slow to get on board.

The mayor is expected to soon name Mary Nichols (no relation to Norm Nichols), an attorney with the Natural Resources Defense Council and a former Bradley campaign manager, to replace commissioner Carol Wheeler, who resigned Monday at Bradley’s request.

Earlier this year, Bradley appointed Mike Gage, an environmentalist and his former aide, and Dorothy Green, of Heal the Bay, a watchdog group that monitors Santa Monica Bay.

This “loading up of the board” with environmentalists, as Norm Nichols put it, was among the reasons he cited for stepping down. Nichols urged the DWP commissioners to “advise the City Council to . . . to ensure that balanced and reasoned viewpoints can be heard” on the DWP board.

Although Nichols was under fire for allowing $700,000 in chartered private jets and a $1-million VIP tour program, his resignation was a surprise to his staff, the mayor’s office and the City Council.

Reaction from commissioners and City Council members to Nichols’ announcement was mixed.

Upon being told of the resignation, DWP Commissioner Gage said, “So be it. Some people don’t adapt to change very well.”

But commission President Rick Caruso lauded Nichols as a brilliant manager and said, “It’s unfortunate to lose someone with his talent.”

City Councilman Ernani Bernardi called him a “political scapegoat. . . . Apparently, the mayor’s getting mostly political advice now, and the environment is a hot ticket.”

Councilwoman Joan Milke Flores agreed that Nichols may have been mistreated by the mayor. “I’m not sure the mayor ever sat down with Nichols and said, ‘We’ve got some differences.’ (Bradley) just called press conferences instead. That must be demoralizing.”

Said Councilman Michael Woo: “What Mr. Nichols is calling political pressure we call accountability.” Woo said the council and mayor are trying to respond to public concerns about the environment. “Norm Nichols is the first casualty of that battle,” he said.

But Councilman Richard Alatorre said he was disturbed by the turn of events. “This should serve as a warning that we need to allow general managers to do their job,” he said. “I think we lost a good general manager.”

Walter Zelman, a former DWP commissioner and former director of the political watchdog group Common Cause, said, “I think the recent assertion of City Hall political needs and agendas into department activities has been excessively heavy-handed and not in the long-term best interests of the department or of the city.”

Nichols immediately will be replaced on an interim basis by Assistant General Manger Dan Waters, DWP officials said. Bradley promised that a nationwide search would be launched immediately for a successor.

But commission President Caruso said he “will strongly resist any effort to go outside” the department to find a new general manager because there is adequate management talent within the DWP.