Zurn lays out GWP changes

Glendale Water & Power has cut 35 positions, including several top managers, and there may be more reductions to come, the utility’s new general manager said during an overview of his first three months at the helm.

Speaking to the Glendale Water & Power Commission at a City Hall meeting Monday, Steve Zurn — who also serves as public works director —outlined how he’s reorganized the utility that operated in a decentralized fashion, as well as his plans for the future.

Part of those plans include eliminating 25 to 35 more staff members through early retirements and layoffs and a possible electricity rate increase come next spring.

While commissioners approved of his belt-tightening, they warned Zurn not to cut the utility to the bone and expressed concern over his balancing multiple jobs.

“Wearing two hats of two big, important entities is a lot,” said Commissioner Deborah Dentler.

But Zurn shook off the concerns, adding that the cuts wouldn’t compromise reliability. He plans to spend most of his time managing the utility, leaving the day-to-day operation of public works to top staff he’s personally groomed.

Zurn has been molding the utility to mirror public works, which he said finishes projects on time, under budget and with few change orders. At the utility, change orders — additional costs that are added after a project has begun — have been put under the microscope.

Other aspects of utility operations, including budgeting, are being examined, with Zurn’s predecessor, Glenn Steiger, now out of the picture. Steiger resigned for personal reasons the same week city officials discovered he double-billed Glendale and a joint powers authority for conference costs.

Zurn said public works employees would attest that he’s “a cheap you-know-what” and utility workers should expect the same mindset. As one of his first orders of business, he took 55 credit cards away from Glendale Water & Power officials and routed expenditures to the utility’s new finance administrator.

“We look at this as spending not our money, it’s the citizen’s money, and we have to be very diligent with how we do that,” Zurn said.

But centralizing spending and cutting positions won’t be enough to fix Glendale Water & Power. Currently, the water side is $21 million in the red, and although the electricity operations have $72.5 million in cash, that’s below the $124 million minimum set by City Council policy.

Nearly $43 million in projects included in the utility’s five-year plan — including upgrading unit control systems at Grayson Power Plant and replacing several water mains — were deferred after the city closed a $15.4-million budget gap this summer.

With a multiyear water rate hike approved several months ago — and $35 million in proposed water bonds — utility officials can bring the water side back into the black by 2016, but the electricity side also needs revenue enhancements, Zurn said.

He expects to propose an electricity rate increase and $60 million in electricity bonds next spring.

This summer, Zurn held several public meetings proposing a 14.7% electricity rate increase over four years, starting with a 3% bump in 2013. But those numbers may change, he said.

The rate increases, though, won’t cover some expenses. Maintenance of the aging power plant is a top concern, Zurn said, as are state mandates that require utilities to purchase more expensive energy from renewable sources, such as wind and solar power.

“These are not going to be inexpensive undertakings,” he said.
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