DWP to Cut Staff by 1,000 Over 18 Months

Under pressure from Los Angeles city leaders to streamline operations, the Department of Water and Power will reduce its staff by 1,000 employees--10% of its work force--by July and will implement other cost-saving measures within the next 18 months, officials announced Tuesday.

DWP Director William R. McCarley said the staff reductions will account for $60 million of a projected $160-million savings between now and the end of fiscal 1995-96--cuts that must be made if the city wants to compete once the electric utility industry is deregulated.

“It is not a pleasant job to have to do this,” McCarley told the department’s Board of Water and Power commissioners, who unanimously approved the reductions. “But it is something we have to do.”

The cuts are the first phase of a plan to slice the DWP’s 10,400-employee work force by up to 2,900 positions within five years, McCarley said.

He said he is hopeful that the reductions can be accomplished mostly through attrition, voluntary retirement and placement of employees in other city jobs. However, he predicted that up to 200 layoffs may be necessary to eliminate 1,000 positions.

“It’s simply a fact of life,” McCarley said. “It is being done in other industries.”

Once the reductions are in place, he said, the DWP would be in a better position to upgrade its facilities or cut customers’ rates. Some of the savings, City Council members contend, could also be used to help fund the expansion of the Police Department.

“I could give a long list on how we could use that money,” Councilwoman Laura Chick said. “Using it to make the city safer would be the first on the list.”

DWP employees and union leaders said that although they were dismayed by Tuesday’s decision to cut staff, they were not surprised.

“Like everybody else, they’re cutting,” said a 30-year-old clerical worker who asked not to be identified.

“You’ve just got to accept it,” said another clerical worker, a 34-year-old Mid-City woman who has worked for the DWP for 14 years. “I’m not very worried,” she added with a laugh. “I’m old.”

Josephine Valverde, a clerk who has only been with the department for a year, called the cuts “the kiss of death.”

“I think it’s a shame that they view this as a cash cow, and keep raiding it for all its money,” she said.

Albert Kamakeeaina, a construction worker who has been with the DWP for 18 years, added: “All it boils down to is politics.”

Indeed, city officials have long bashed the semi-independent DWP as wasteful and have sought to tap into its funds.

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The department came under heated criticism last year after it was disclosed that the DWP had spent more than $800,000 on catered food at the time of a nine-day strike by employees. The utility’s managers had previously been chastised for expensive charter airline flights and its handling of contracts.

Council members, frustrated at the way the department was being run, hired a private firm in late 1993 to audit the department.

In May, they released the report, which urged the DWP to cut its staff by up to a quarter to save as much as $223 million a year.

The audit, conducted by a New Hampshire-based consulting firm, compared the DWP to other utilities and found that it generally charged customers lower rates but that its expenses were high.

However, with deregulation of the power industry looming, the firm concluded that 2,300 to 2,900 employees should be cut from the work force to bring the DWP in line with the staffing of private utilities.

At the urging of the council, McCarley agreed to comply with the audit’s findings and went to work on the first round of cuts.

“This is the result of many months of effort,” McCarley said.

Under the plan, the department will cut 20 administrators, 330 engineers and other professionals, 80 technicians, 150 clerks and 420 maintenance and construction workers.

McCarley said he will report back to the Board of Commissioners within 30 days with a final list of reductions. He said he will also inform the City Council members of his plans. However, the DWP does not need their approval to move forward.

The other cost-saving measures include cutting travel expenses and reducing equipment budgets.

City leaders praised the department’s decision to make the reductions.

“We are running a utility here, not a charity,” Councilman Zev Yaroslavsky said.

Chick added: “I have been hearing for a long time and suspecting for a long time that there are ways to run DWP more efficiently. This is a first step in the right direction.

“Although I don’t want to see job loss, I hate the idea we might have unneeded employees.”