On April 14, I had the privilege of attending a small roundtable discussion here in Los Angeles with German Chancellor Angela Merkel. After some remarks about a strong collaboration between our city and her country, Merkel got straight to the point: What is going on with the city’s utility, and is Los Angeles on the brink of collapse?
Those are crucial and highly interrelated questions. Our city’s future and its economic recovery rest in part upon a Department of Water & Power that is innovative, cost-effective and second to none in serving the public.
No one takes pleasure in asking Angelenos to pay higher utility rates when so many already are struggling to pay their bills. But last week’s rate hike was crucial for the long-term health of the city. Now we must focus on where the city goes from here.
As the newly appointed general manager, my priority is to put the DWP’s house in order. Although I will be serving as an interim director, the mayor has made clear that he wants me to begin the process of transforming the department now.
Here are four areas I will focus on immediately:
• Transparency. I want ratepayers to see how their dollars are put to use. The DWP budget must be thoroughly analyzed to insure that public money is being well spent, with an eye to cost-effectiveness and accountability.
Capital efficiency. The DWP needs to be streamlined and to use its resources more wisely. I intend to take a hard look at why the utility owns more than 300,000 acres of land — the equivalent of more than 20 times the size of Manhattan. The DWP also occupies about 5 million square feet of real estate for offices, maintenance facilities, etc., while Pacific Gas & Electric uses for similar purposes about 7 million square feet — yet PG&E serves almost four times as many customers. Does DWP really need so much land and so many buildings?
Planning. The rate increase recently passed will help us survive in the present, but what about DWP’s role in the Los Angeles of tomorrow? The DWP must prioritize its investments and assume a leadership position in the emerging fields of green technology, clean energy and clean water supplies. In addition to providing greener alternatives for our community, this will help drive economic development in Los Angeles.
Passing the torch. In my role as general manager, I will be best remembered for whom I find as a successor. The DWP has had eight general managers in the last 10 years. The city needs continuity, and it needs someone with the leadership and management skills necessary to run the department well. I intend to find and recruit such a person to lead the DWP.
Can a complete transformation happen in the next few months? Of course not. But at a minimum, the department can be put back on track and retooled, with stronger fundamentals, to start it down the path to transforming itself.
The DWP’s challenges are similar to those facing Los Angeles itself. Both the city and its utility need to change their cultures, making them more responsive to the public’s needs. At present, we lack long-term strategies — we have plenty of ideas but no coherent vision for where we want to be 10 years out and beyond. And we’ve yet to figure a way to gain the full benefit of the city’s incredible assets — its commercial gateways, its creative capital, its wellspring of higher education, and its remarkable cultural diversity. These are the elements of any winning sales pitch.
This is not the first time Los Angeles has had to adapt to a changing world. Eighty years ago, we were a city steeped in “black gold,” boasting the fourth-highest oil production in the world. Forty years later, computer scientists in the Southland harvested a different mother lode: contributing crucial research to what became the Internet. Twenty years ago, after the end of the Cold War, Los Angeles saw a decline in aerospace contracts and created a new economy of trade, tourism and technology.
The challenge of transformation is not new. But it does require new thinking, new energy and a new willingness, on the part of all Angelenos, to take on the task at hand.
Austin Beutner is first deputy mayor of Los Angeles and general manager of the Los Angeles Department of Water & Power.