Los Angeles Department of Water and Power (DWP) General Manager Ron Nichols can’t tell investigators what happened to $40 million in two nonprofit trust funds he and a union leader have overseen for years, and has apparently gotten tired of talking about it in an official capacity.
Nichols announced his resignation Thursday after three years on the job. The head of the nation’s largest public water and electric utility has been under fire since the Los Angeles Times began raising questions about the trusts he co-manages with Brian D’Arcy, leader of International Brotherhood of Electrical Workers Local 18, the DWP’s largest union.
D’Arcy has blocked efforts by the Times and City Controller Ron Galperin to find out how the money was spent by the Joint Training Institute and the Joint Safety Institute, both created ostensibly to help repair relations between the DWP and the union after years of labor turmoil in the 1990s. Nichols said he was out of the loop and didn’t have any information.
So far, no one has publicly admitted to knowing much about them. The commission that oversees the DWP demanded information from the union in October and threatened to audit the funds. The union promised to complete its own audit by November 19, but when it was not produced, the commission cut off funding for the trusts.
When Nichols was answering, or not answering, questions about the mysterious ratepayer-financed trust funds, he was explaining why the department’s new billing system was such a mess. DWP had switched to a new computer system that cost $162 million, triple the $59-million cost that had been bandied about in public.
Tens of thousands of customers received incorrect bills, late bills, bogus late notices and threats of disconnection after the rollout last September. One Los Angeles resident reportedly received a bill for $3,900, 12 times the amount she is normally charged. Others reported having large sums of money suddenly sucked out of their bank accounts via the utility’s automatic-payment function.
The DWP was at the center of L.A.’s mayoral election last year. Wendy Greuel, former L.A. city controller and councilwoman, had strong support from unions, including the DWP’s. But she lost to Eric Garcetti, who pledged to shake up the utility and resist union demands.
Nichols walks away at the end of the month from a $340,000 salary.