Riordan Replaces Staff Chief in Power Shift : City Hall: Management expert William Ouchi is new top aide, replacing William McCarley, who gets DWP post. Moves take many by surprise.

In the most dramatic shake-up of his year-old administration, Los Angeles Mayor Richard Riordan on Thursday ousted a career bureaucrat as his chief of staff and replaced him with a UCLA management guru eager to restructure the City Hall bureaucracy.

William R. McCarley, a 29-year City Hall veteran, will leave as top aide to Riordan to take over as head of the Department of Water and Power.

He will be replaced in the mayor’s suite by William Ouchi, who has been on leave for a year from UCLA to advise Riordan.

Riordan announced the moves to his staff just after noon, taking many by surprise. At a brief afternoon news conference, the mayor and his aides said many details of the power shift have yet to be resolved. Potentially controversial questions include whether Ouchi will retain his UCLA affiliation, who will pay his salary and how much he will make.

Riordan said both men will assume their jobs on an interim basis. McCarley’s appointment requires the approval of the DWP commission, which is in the midst of a nationwide search for a permanent general manager to replace Dan Waters, who retired earlier this year.

Riordan went to great lengths to praise both men and assure that the change is not a demotion for McCarley. “Bill has the background, wisdom and guts needed to engineer this city agency so that it will work smarter and more efficiently,” Riordan said. He went on to praise Ouchi, saying that he will bring his expertise as one of the top academics in the world to city government.

The moves will accomplish two key goals for the Riordan Administration: The first will put the mayor’s staff in the hands of a close confidante who is expected to increase the pressure for streamlining the city bureaucracy. And the second will put at the DWP a proven team player who is expected to be more sympathetic than past managers to Riordan’s efforts to tap the utility’s funds for a continued expansion of the Police Department.

The changes come after a year in which Riordan succeeded in eliminating a $200-million deficit and finding $83 million more to expand the LAPD. McCarley helped shepherd those projects through the City Council.

But another prime goal for the mayor, rebuilding the city’s huge and often dysfunctional bureaucracy, has languished. Riordan’s proposals to eliminate the Board of Public Works and to consolidate eight agencies and commissions into two new super-departments were rejected by the City Council.

Only small dollar savings were associated with the changes and council members protested that Riordan’s staff, led by McCarley, did not make a compelling case on the value of change.

McCarley, who had been the top policy analyst for the City Council before becoming the mayor’s aide, is well-liked by most council members. But some members of the mayor’s staff have found the Army veteran too authoritarian.

One top mayoral aide said the change had as much to do with personality as policy.

“The mayor respects Bill, but there has never been any chemistry between them,” said the aide, who asked not to be named. “They just didn’t click, and the mayor needed someone he is comfortable with to work with him.”

Ouchi, a Japanese American who was born in Hawaii, is the first Asian American ever to hold the top administrative post in the mayor’s office.

In his work at the UCLA Anderson Graduate School of Management he has been acclaimed as an expert in organization and is a frequent consultant to corporations. He took a leave from UCLA a year ago to test some of his ideas in the real-life crucible of City Hall. A private nonprofit group called the Fund for a New Los Angeles was established to help pay Ouchi’s expenses and to reimburse UCLA for his salary, about $120,000 a year. The city’s corporate elite provided most of the more than $500,000 that has gone to that effort so far.

Working just two doors down from Riordan’s office, Ouchi has been an unknown quantity to many at City Hall.

“I’ve never met the man,” one council member said.

The 51-year-old Ouchi has worked mostly behind the scenes as a special adviser to the mayor.

He played a central role in drafting Project Safety Los Angeles, the five-year blueprint that Riordan and Police Chief Willie L. Williams unveiled last year for adding 2,855 officers to the LAPD.

He also brought together a group of high-powered business executives in the mayor’s Committee on Fiscal Administration, which outlined plans for tapping city pension funds, improving bill collections and generally wringing more money out of city departments.

“It will be a privilege for me to continue with (Riordan’s) agenda of bringing public safety to the level we all expect, of bringing jobs back to the city of Los Angeles and of bringing the latest principles of modern management to every branch of city government,” Ouchi said.

Ouchi often played Mr. Outside to McCarley’s Mr. Inside--with the professor acting as the “idea man” who would change City Hall and McCarley frequently introducing a dose of political reality into debates among the mayor’s top staff.

On Thursday, some questioned whether the theoretician can put his ideas into action.

“The concern that I share is that the office is still lacking in an ability to implement its ideas,” said one businessman who deals frequently with the Administration. “They have a lot of good ideas, but some of us are looking for individuals to make things happen.”

Deputy Mayor Robin Kramer pointed to Ouchi’s work on the public safety plan and fiscal reforms as proof that he “is not just an academician with a bow tie.”

Although he works within the mayor’s suite, Ouchi’s semi-independent status has allowed him to avoid the financial disclosure forms required of other top city officials.

Asked if he intends to leave his position at UCLA, Ouchi would only say: “That has yet to be seen.”

The mayor’s office is working with the city Ethics Commission and the city attorney’s office on issues including who will pay Ouchi and whether he can retain his UCLA affiliation. Ouchi wants to maintain his campus ties in order to continue supervising several doctoral candidates and directing a special summer program for minority students.

For at least the time being, his salary will be covered by the nonprofit committee--an arrangement that troubled at least one council member.

“If he doesn’t want to be on the city payroll, he should not get the job,” said the council member, who requested anonymity. “This is a city job and should be accountable to the taxpayers.”

For the 54-year-old McCarley, the move to the DWP is part of a long and prominent City Hall career. He began as a junior analyst in the Bureau of Street Lighting and worked his way up to become the city’s chief legislative analyst, a post he held for 10 years.

In recent years, McCarley had grown restless as legislative analyst, the top researcher for the City Council. He tried to get a job heading Los Angeles International Airport but lost out. Then came the offer as Riordan’s top aide.

“Bill is the perfect choice . . . a person who is respected by the City Council, who will make certain the mayor and the City Council work as one team in turning this city around,” Riordan said then.

But from his first days with Riordan, McCarley complained to associates about his frustrations. Initially, he was surrounded by former campaign workers with little experience in government, and Riordan himself is easily distracted. McCarley faced a flood of challenges.

“During this year we’ve had a few, minor little things happen,” McCarley said jokingly at Thursday’s news conference. “A few labor disputes, nothing serious, a minor earthquake, a little budget problem of $200 (million) or $300 million.”

McCarley is nearing retirement and his temporary appointment to the DWP was seen as a way of removing him from the chief of staff post while allowing him to retire with a full pension. Officials said McCarley would be eligible for full retirement at 63% of his salary next June 28--his 30-year anniversary with the city.

He made $149,000 as chief legislative analyst--significantly higher than the $100,000 top salary permitted for mayoral staffers. To lure McCarley to the job, Riordan had pushed special legislation through the council to allow him to maintain his $149,000 salary.

For the mayor’s office, the change means the loss of its most veteran staffer, one who knows City Hall inside out.

“There are a lot of people in the mayor’s office who have a lot of ideas, some of them good, some of them bad,” said one council member. “McCarley has been the one to say, ‘You can’t do that--it’s illegal, it’s politically unwise, it will break the bank.’ Ouchi has been the one with the wild ideas.”

McCarley, who said he may seek a permanent position as DWP chief, said he is not being cast away by the mayor but simply put to use elsewhere.

“I’m a team player,” McCarley said. “I’ve played a lot of positions. . . . I’m not going to Mars or Jupiter. I’m just going up the hill (to the DWP).”

New Leadership

Here is a look at the Mayor Richard Riordan’s new chief of staff, William G. Ouchi, and the man he replaced, William R. McCarley.

WILLIAM G. OUCHI

* Age: 51

* Residence: Santa Monica

* Education: Williams College, bachelor of arts. Ph.D. from the University of Chicago.

* Career highlights: Has been a faculty member at the University of Chicago, Stanford and, since 1979, UCLA Anderson Graduate School of Management.

* Family: Married, three children

* Quote: “I pledge to all the people of the city of Los Angeles that I’ll do everything in my power to provide them with the best Riordan Administration they can possibly get.”

*

WILLIAM R. McCARLEY

* Age: 54

* Residence: Mission Viejo

* Education: Cal Poly Pomona, bachelor of science. Graduate studies in finance and public administration at USC.

* Career highlights: Chief legislative analyst, city of Los Angeles, from 1984 to 1993. Has worked in a variety of capacities for the city for 29 years.

* Family: Married, one child

* Quote: “I’m a team player. I’ve played a lot of positions. . . . I’m not going to Mars or Jupiter. I’m just going up the hill.”