Why can't LADWP hold onto its top executives?

The executive churn at Los Angeles Department of Water and Power continues with the announced departure of General Manager Marcie Edwards after just two years on the job.

The seventh general manager to head up the nation's largest municipal utility in the past decade, Edwards announced her retirement earlier this week. 

DWP's Revolving Door at the C Suite

•     Marcie Edwards - March 2014- August 2016
•     Ron Nichols - January 2011 to March 2014 
•     Austin Beutner - April 2010 to December 2010 (interim)
•     S. David Freeman - October 2009  to April 2010 (interim)
•     H. David Nahai - October 2007 to October 2009
•     Robert Rozanski - July 2007 to October 2007 (acting)
•     Ron Deaton - 2004 to July 2007

    
DWP spokesman Joe Ramallo pointed out the turnover of top managers has slowed, given that only two GM's have served in the top spot in the past five years.  

David Nahai is an attorney who served two years on the DWP board before serving two years as general manager from 2007-2009. He said Edwards did well in a stressful job reporting to many bosses and stakeholders.

"If you take a look at just the turnover of that position, my predecessor suffered a heart attack, his predecessor came down with cancer, my successor lasted only six months," Nahai said. "It's a very stressful position, no doubt about that."

Department of Water and Power General Manager Marcie Edwards inherited the task of bringing transparency to two trusts that the DWP co-administers with its workers' union.

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There is little "structural strength in that position," Nahai said. "The GM doesn't have a contract like the police chief has, and there are limits on her authority, and so it's very demanding politically to navigate through the political process to get things done."

DWP Board of Commissioners president Mel Levine was part of the group that hired Edwards a little over two years ago. He said that when he brought her into the building for an interview, she recognized many of the people she had worked with from the beginning of her career until she left to head up Anaheim's city utilities. Levine said returning to run the DWP was a capstone for her career and that she relished taking on the reform agenda that Mayor Eric Garcetti put forward.

"It's a tough job, and she's been a great general manager and a real change agent in L.A.," Levine said. The stress of managing a multi-billion dollar budget while reporting to a labyrinthine structure of city officials could have taken its toll, he said.
    
"The general manager has probably 18 bosses," Levine said.  "They all have their own ideas about what the DWP should be doing, and she does have to juggle all those competing demands."
    
Edwards reported to a five-member board of commissioners, but also answered to the city council, mayor and city administrative officer and their staffers. The DWP also faces increasing oversight by state water, air quality and energy agencies. On top of that, the powerful electricians union, IBEW, also influences the DWP's decisions and relationships with city government, said Rafe Sonenshein, executive director of the Pat Brown Institute at Cal State L.A.

"There's a lot of chiefs around, and that is a big problem," he said. "There's a lot at stake. It's a huge utility with tremendous importance to the city's budget as well as dealing with its own budget. I hope it's not an impossible job, but it's turned out to be a very difficult job."

In past statements to luncheon crowds and town hall meetings she attended while pitching this year's power and water rate hikes, Edwards has exuded energy and optimism about the future of the agency, while providing a few cautionary words about its personnel challenges.
    
Specifically, she spoke about the churn in recent years and relative inexperience of upper managers in their posts at one of the nation's largest utilities.  She also mentioned the challenge of replacing the utility's aging front-line workforce. Many are in their 50s and 60s and nearing retirement, creating a potential expertise gap.
    
The agency has responded to repeated failures, each time promising the lessons learned would shore up public faith. There was the massive water pipe breaks like like at UCLA in 2014, two trusts that gave millions of dollars of ratepayer money to the union where its spending was not rigorously overseen. There was a flawed new billing system that has led to the DWP suing its contractor.

An independent report commissioned by the City Controller's Office said late last year that the DWP delivered low rates and had improved its planning, but its management remained too decentralized. No single entity had enough authority over DWP operations to be held accountable, said the report. It said multiple and occasionally conflicting layers of oversight hindered executives' ability to accomplish long-term goals like replacing aging water pipes fast enough, and moving to less polluting forms of energy.

Based on those findings and a city council study of potential changes, the DWP is going through a fifth attempt in 16 years at restructuring the agency to improve its management and transparency.     
The latest attempt at change is in the hands of voters in the November election. A ballot measure that originated with the city council would change how the DWP is governed, putting more authority in the hands of the general manager and the DWP board. It would also make that board a part-time group whose members have more experience running utilities.

Immediately after Edwards was hired in 2014, the DWP's previously authorized new billing system was revealed at rollout to be issuing incorrect bills to customers. Her successor as interim general manager is David Wright, who she brought in to handle the billing debacle.

Levine said Wright brought customer waits on the phone to sort out errors from more than an hour down to less than two minutes.

"The combination of shepherding through a rate increase to pay for critically important infrastructure investments, the problem with the billing system, the multiple bosses that she had to navigate, wears you down," Levine said.

"The fact that we have had seven GMs in ten years tells you something about the challenge of the job, it's a tough job," Levine said.