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Ron Kaye: The restructuring of GWP

July 21, 2012

Like dominoes tipping over, one after another, cities — first Vallejo, now San Bernardino, next Compton — are seeking relief from their fiscal incompetence and reckless irresponsibility by hiding behind bankruptcy laws that leave creditors and employees in the lurch, and the citizens to protect and serve themselves.

You have to wonder how many others will follow suit as the state of California and the hundreds of government agencies under its jurisdiction keep on budgeting fictitious spending cuts, improbable tax and revenue increases and ineffective long-term public employee pension reforms as if the four-year recession soon will end and the good times are just around the corner.

With that as a backdrop, the drama in recent months over what is going on with Glendale Water & Power is worth examining to see whether city leaders are, like so many others, masking over problems or coming to terms with past mistakes to fix what got broken.

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The utility's general manager was replaced, water rates were increased, electricity rate hikes are being sought, a credit rating agency downgraded its water bonds, and the utility workers bolted from the city union to join the International Brotherhood of Electrical Workers — but have yet to get a contract, despite 19 negotiating sessions.

“GWP is in transition in every sense, from the labor standpoint, from the leadership standpoint, from a financial standpoint; but the takeaway for us is that at least we know where we are going,” City Manager Scott Ochoa said last week as he talked about the “fundamental restructuring” he is carrying out in the utility's management and culture.

“Where GWP is going is where the rest of the organization already is. GWP is like the moon orbiting the earth. The attitude is, ‘We're separate. We have our own money. We are doing our own thing.' That's what has to change going forward as we reconcile our finances, zero-out capital expenditures, and achieve cost attainment, better leadership, strong management — all those things are the future of GWP.”

The point man for carrying out the changes is Steve Zurn, the city's public works director who is serving as interim GWP general manager and likely will get the position permanently in the fall after a top-down analysis of the organization is complete.

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