Key City Leaders Indicate Support for DWP Layoffs

As Los Angeles Department of Water and Power officials unveiled a controversial proposed reorganization Wednesday, key city leaders said they were reluctantly prepared to back the plan despite its call to lay off 2,000 public employees, the largest such cutback in the history of the city government.

That prospect has rocked the DWP, a legendary Los Angeles institution whose employees nervously gathered in small groups Wednesday to await word of the anticipated cutbacks. Security at the department’s downtown headquarters was noticeably beefed up, with guards asked to work special “tactical alert” shifts. Only a day before, visitors came and went with little notice; Wednesday, they were asked to sign in and were escorted to elevators by security guards rather than allowed to wander around the building.

At City Hall, officials were chastened by the prospect of being asked to authorize municipal layoffs. But many said they were determined to press ahead swiftly with what they see as an inevitable restructuring if the DWP is to survive in a rapidly approaching deregulated energy market. The department is burdened with about $4 billion in bad debt in its energy generation operations, and the cutbacks, proposed by DWP General Manager S. David Freeman, are intended to help the agency buy down that debt over the next five years so that it can wade into a competitive energy market debt-free.

Without that effort, many city officials are convinced that the DWP would fold.

“I feel very, very committed that we must have a public utility in this basin,” said Councilwoman Jackie Goldberg, chairwoman of the Personnel Committee and one of the council’s most passionate defenders of city workers. “That’s going to make me willing to do things that probably no other context would make me willing to do.”

Specifically, Goldberg said that she is convinced that layoffs are necessary to save the DWP and that she is prepared to vote in favor of those cutbacks, though she added that she hopes to find other city jobs for some of the laid-off employees and to offer placement help for the rest. The City Council, the Water and Power Commission and Mayor Richard Riordan must all approve the restructuring, including the layoffs.

Riordan has expressed his support for Freeman, and Council President John Ferraro called the DWP chief Wednesday to express encouragement.

Another pivotal council member, Ruth Galanter, not only lent her support but also joined Freeman for his news conference at which he formally announced the restructuring proposal. Galanter chairs the Commerce Committee, which oversees the DWP, as well as the special committee on DWP restructuring.

“This is a very important day in the history of the DWP and the history of the city of Los Angeles,” Galanter said, adding that she hoped that her council colleagues would quickly approve the proposed restructuring.

Not everyone was convinced. Bob Duncan, executive director of the engineers and architects association that represents about half of the 2,000 white-collar workers targeted for layoffs, attended the news conference and afterward complained that DWP workers were being asked to pay the price for bad management decisions in years past.

The news conference--which about two dozen silent DWP employees watched from the back of the room--focused on Freeman’s dire assessment of the agency’s current health as well as his stark recommendations for recovery.

“We do have an immediate crisis,” Freeman said. “There is nothing magic about this. We have a work force that is much larger than we need to keep the lights on.”

In a city bureaucracy accustomed to soft-pedaling bad news, Freeman’s bottom line was blunt: “There will be 2,000 less employees of this utility after Feb. 1.”

About three-quarters of those laid off are expected to be engineers and managers, said Freeman and other officials. Left relatively unscathed would be the front-line, blue-collar electrical workers, whose union is supporting the proposed restructuring. A small number of clerical workers probably would lose their posts too.

The plan, however, is still open to amendment. After Freeman and Galanter formally unveiled it for reporters Wednesday afternoon, they staged the first of several public meetings.

About 50 people attended the evening gathering at Westwood Charter Elementary School, where council members Galanter, Cindy Miscikowski and Mike Feuer joined Freeman as he presented his plan to the public.

After the presentation, several speakers accused Freeman of blindsiding DWP employees with his announcement Tuesday. “You’re talking about hundreds of families being impacted and maybe destroyed,” one speaker said.

Freeman responded that most of the affected employees would be professionals who probably would have little difficulty finding jobs. He reiterated that without the cuts, the utility could be bankrupt soon. “I inherited a budget that contemplated eliminating 1,500 jobs, it just hadn’t been done yet,” Freeman said. “I didn’t just drop down here from Mars and drop the bomb.”

Before the meeting, Freeman stressed that some of the particulars of the layoffs still are being worked out. No employees have yet received pink slips, and the city’s Personnel Department is trying to sort out the “bumping rights” of workers who occupy positions that are being eliminated.

One politically dicey question is whether the layoffs would be based solely on seniority. The answer to that question not only will shape the DWP work force that remains but also will have profound implications for the agency’s ethnic and gender diversity.

“That goes directly to the equity question,” said City Councilman Mark Ridley-Thomas. “That’s an appropriate question that needs to be answered, and it’s one that I’m prepared to press as forcefully as possible.”

Freeman declined to condemn his predecessors for their decision to invest in that and other facilities, but he could not resist one jab.

“I’m not criticizing what went on here in the past,” he said. “We’re just paying for it.”

Times staff writer Jeffrey L. Rabin and correspondent Sue McAllister contributed to this story.