Controversy Follows DWP Chief in Retirement : Finances: City officials denounce deal allowing Dan Waters to collect $75,000 in overtime pay. He was earlier criticized over water rates and spending during ’93 strike.

Dan Waters thought retirement would put an end to the controversies that encircled him as general manager of the city Department of Water and Power.

He was wrong.

Even as he skis, travels and relaxes at home, Waters and the DWP are coming under fire for employing a method that allows him to cash in on 1,044 hours in compensatory time he accrued during his tenure at the city-owned utility. That translates to about $75,000.

City Controller Rick Tuttle said Thursday that he will refuse to pay the $75,000 in overtime payments to Waters until the City Council reviews the matter.

“This sham appointment should not stand, and this waste of public funds should not be allowed,” said Tuttle, who frequently clashed with the DWP chief. “Dan Waters was generously compensated when he accepted the position of general manager, and his pension reflects that.”

Waters, who retired from the $165,000-a-year job in February, could not be reached for comment.

On the day he retired, Waters was appointed assistant general manager, a job that carries no responsibilities but pays $72 an hour. Because general managers are not entitled to overtime, DWP officials said the voluntary demotion was the only way for Waters to collect on the comp time he had accrued before taking the agency’s top post.

Water’s voluntary demotion was approved by a Waters subordinate, assistant general manager Eldon Cotton, upon advice of the city attorney’s office.

The last general manager to retire, Norman E. Nichols, used the same post-retirement demotion in 1990 to receive $27,000 in overtime. The practice was questioned in a report released earlier this week by City Administrative Officer Keith Comrie that knocks the city’s rising overtime costs.

DWP officials defend the practice as a fair way of compensating general managers for comp time they accrued before they took the DWP’s top post. The practice may appear out of sorts, officials said, but it is part of an agreement between the DWP and the Management Employees Assn.

“I think it would be hard to say he’s doing anything improper or even tainted,” said Dennis Tito, president of the DWP Board of Commissioners. “If there is a problem, it is the convoluted way things took place. It’s the process you would question. It looks terrible, even sleazy.”

Councilman Joel Wachs, a frequent DWP critic, condemned the practice as a “secret golden handshake” and said he will seek to close the “loophole” that allows DWP general managers to cash in upon retirement.

A temporary replacement for Waters, Kenneth S. Miyoshi, was named Wednesday, but the search for a permanent DWP chief continues. Tito said he hopes to reform the system so the next general manager has more clear-cut guidelines upon retirement.

For Waters, 59, the uproar is nothing new. A recent audit knocked Waters’ leadership for spending abuses during last fall’s employee strike, in particular high-priced catered meals for supervisors. Waters was also dragged into controversies over the restructuring of water rates and rationing implemented during the long drought.