Follow-up to Glenn Steiger’s Resignation in 2012, whether a Cover-Up for something more Ominous (Part II)
As I reported previously, Glenn Steiger’s resignation and abrupt departure for an inadvertent botch expense claim totaling $1,164.02 for lodging, parking and mileage expenses, does not pass the smell test, There’s appeared to be something more ominous, behind his resignation that isn’t being disclosed by City Officials.
This could have pertained to a variety of issues under his watch:
1. When Glenn Steiger first became GWP General Manager in February 2008, per the 2007-2008 GWP Annual Report, in his “General Manage Message”, he said: GWP faces serious issues with supply. California officially entered a drought in June. Although water demand in Glendale is relatively stable, the demands upon our diminishing regional water supplies are multiplying. As a result, GWP began reducing demand through conservation incentives, to encourage conservation. Customers responded to these programs and have reduced water consumption by nearly 10%.
• Yet, with the City facing severe drought conditions since 2008, Steiger allowed the City Council to approve over 4,000 new units, in several new developments, under the Downtown Specific Plan, after obtaining variances for reduced parking per unit, for each development, without any opposition, that wiped out any benefits of water conservation by existing city residents and businesses, and for what?
• Steiger in his GM message said that GWP will continue to expand its Solar Solutions program to produce clean energy and lower electricity use, that the City subsidized. This, including water conservation, ultimately helped to reduce City revenues that resulted in under projected revenues to pay for the City’s fixed overhead and operating expenses. To compensate for this loss revenue, the City’s solution was a Drought Adjustment Charge for water and a Energy Adjustment Charge to adjust for the variation from projected costs of fuel and purchased power below budgeted projections.
2. Steiger’s pushed the “Smart Meter” program through without the benefit of public debate. His possible alleged poor oversight of the program, from 2009. in its design, development, implementation, and management, of the Smart Grid utility modernization project for Glendale Water and Power cost taxpayers over $50 million in bonds intended for future infrastructure, that was a significant factor to the raising of Electric and Water rates by a much higher percentage than would have otherwise resulted. Invoices, change orders and other paperwork from GWP’s smart meter contract lacked certain cost details, a practice that could put the city at risk of overpaying for work, a city audit found. The project, a segment where the original cost estimate for which was $29 million, has increased in cost by about $4 million since it was approved in 2009. (1)
• Incidentally, the City Council was not upfront or forthright with the community of its true intentions with the smart meter program, i.e. that now gives the city the capability to charge higher rates in the future, during prime peak hour usage, between 10:00 a.m. and 6:00 p.m.
GWP was the first utility in the U.S. to receive federal stimulus funding for its “smart grid” initiative, and the first to be fully smart-grid operational for both its electric and water utilities. Why was Steiger in such a rush to push this agenda, besides giving him expertise to promote himself to other utilities in the future? Prior to the smart meters, it only cost the city less than $500,000 annually for meter readers.
Steiger in reflection noted some of the problems he experienced: (2)
• In finding tech savvy engineers, local talent, competition in areas like the Silicon Valley is fierce, and relocation expense reimbursement may “still” be necessary to achieve optimal staffing levels.
• Ratchet technical compensation budgets 15% – 30%- Glendale experienced a 15% – 20% increase in technical labor cost. : Few utilities (or vendors for that matter), consider the opportunity cost of a position left vacant while searching for an employee who will accept less than the going rate. It is vital to finishing a deployment on time.
• Anticipate a 2-3 year technical employee shelf life: “Techies” are on the 2-3 year plan. Motivated by projects that will have a significant impact on a business, they will work night and day to complete a project, then they are on to the next best thing – which is rarely with the same employer.
• Consider contracting arrangements. Finding full-time employees with the right skill set is rarely expeditious. There is a current engineering shortage, taking its toll on employers seeking to staff their US-based facilities.
Few, if any, utilities can successfully navigate these challenges without incremental technical resources. Additional application, software and firmware engineers will be needed before, during and after deployment, costing millions of dollars annually more than meter readers.
Finding top-rated technical talent isn’t the only challenge utilities will face. The deployment of AMI technologies requires multiple functional areas to work in tandem to ensure its successful implementation. Glendale needed to create a smart grid operational command center, where Contract IT personnel, internal members of the IT team and operations team members sat side-by-side to interact daily. Also meter readers although no longer needed were not laid off , but redeployed, per union MOU, regardless of qualification with the new technology. GWP partnered with other departments to develop a curriculum to train unemployed and displaced workers to gain valuable skills to qualify in an entry level craft position for the electric utility.
• Using existing employees, where merited, to fill new roles will not only enable a utility to avoid the drama (and water-cooler scuttlebutt that significantly reduces productivity) associated with mass layoffs, it can also reduce the length of time associated with getting an employee up and running. (3)
It wasn’t until September 19,. 2011 that GWP installed its last smart meter. A total of 120,000 smart meters have been installed throughout Glendale, originally projected to replace 84,500 electric meters and 33,400 water meters. (4)
In 2013, after Steiger had resigned as GWP General Manager in June 2012, he was already promoting himself as a consultant on smart grid and related issues to the energy and water industries. Based on his insights, the bottom line is that finding the right “human capital” for successful smart grid initiatives may not be quick or easy or without a budget hit,. (5)
3. Steiger’s oversight, or lack thereof, and collective participation, responsible for corroborating Willdan Financial Services, work product, that bungled the City’s water rate increase of March 2012, that resulted in the City coming up short in projected revenues, by almost $9 million dollars.
4. Steiger’s wholesale buying and selling of energy futures to other utilities via hedge funds, that the City purported made a profit in 2010-11 and 2011-12 per the City’s Utilities financial report, yet during the same period the Utility lost a significant amount of money per the City’s Cash and Cash Equivalent fund accounts, that decreased by $85.6 million during Steiger’s tenure.
As I had previously reported, there was something very ominous and incomprehensible about Steiger’s sudden and unexpected departure. To add fuel to the fire, one of the readers, a board member to the Coalition for Better Government, and a retired county sheriff, observed that the City Council did not do its due diligence to find an adequate replacement for Glenn Steiger, like it did in replacing police chief, Ron DePampa, i.e.
• City officials will begin accepting applications to replace Glendale Police Chief Ron De Pompa, who has been working on an hourly basis since announcing his retirement in February. Philosophies that are listed in the new job description. (6)
• On October 12, 2013, Ochoa announced Rob Castro’s appointment following a nationwide search to replace outgoing Police Chief Ron De Pompa, who retired in February. (7)
So, why wasn’t the same urgency given to find a new GWP General Manager to replace Glenn Steiger. Didn’t the City perform a nationwide search in 2007 prior to Glenn Steiger being hired from Mass Municipal Wholesale Electric Co as General Manager/CEO ? Rather, Ochoa who appointed Steve Zurn as Interim GWP General Manger in May 2012, decided to make it permanent four months later, by selecting Steve Zurn, with no evidence of a nationwide search, who would perform a dual role as Director of Public Works as well as GWP General Manager.
The question is why put Steve Zurn in a dual role, as head of both Public Works and GWP, who appears to lack the education and qualifications for such a very important position?
• Glenn Steiger was a graduate of New Jersey Institute of Technology, having received an MS, Engineering Management 1984 – 1987; and New Jersey Institute of Technology, having received a BSCE, Civil Engineering; 1966 – 1970. (8)
This does not even include his prior work experience as VP, Corporate and Competitive Affairs, Jersey Central Power and Light May 1982 – December 1996; VP, Corporate and Competitive Affairs, GPU Energy 1995 – 1997; General Manager IID Energy. Imperial Irrigation District, April 2003 – January 2006; and General Manager/CEO, Mass Municipal Wholesale Electric Co., January 2006 – January 2008 (8)
In comparison, Steve Zurn’s education was as follows: degree , Political Science, UCLA and a Masters Degree , Public Administration, California State University Long Beach. Zurn appears to have had no Engineering Management or Civil Engineering education classes. Zurn has worked for the City of Glendale for 25 years spending his entire career in the Public Works Department in various capacities. including Administration, Engineering, Traffic & Transportation, Fleet Maintenance, Project Management, Integrated Waste Management, Maintenance Services and Environmental Management. In 2003 he was appointed Director of Public Works. (9)
The real question is, how can Zurn being Director of Public Works, qualify him as GWP General Manager ? Apparently, it appears he was selected strictly on the basis that, during his 9 years tenure as head of Public Work’s, his ongoing display of accountability and strong management style has proven to be the essential qualities needed to lead GWP,” said “then” Mayor Frank Quintero. (10)
• Other cities, i.e. Anaheim Public Utilities frequently requires experience in professional engineering, design, environmental and other consulting services in support of water capital projects and other ongoing planning, operation and maintenance activities conducted on behalf of the City’s utilities.
GWP General Manager Steve Zurn displayed his inexperience when discussing Bartle Wells, Cost of Service Analysis (COSA), in June 2014, prior to the new water rate increase being voted upon, when he said, “utility staff didn’t catch the consultant’s mistakes because officials at the time didn’t have the expertise to do so and were relying on Willdan Financial Service’s (WFS’s) calculations”.
• Zurn is blaming “utility staff”? Oh Really! We’re paying Zurn $225,797 annually. Yet he is not willing to take responsibility and passes the buck when things don’t turn out as expected. What do you expect from someone with only “accountability and management skills“.
However, Zurn assured the City Council, that this time, the rate plan created by, Bartle Wells Associates (BWA), had been thoroughly vetted by a team of auditors and lawyers to review the new proposed rate structure. (11)
This was even after former Law Professor Zavos gave several presentations and submitted documentation to Zurn and the City council that Bartle Well’s COSA analysis was flawed, with Prop 218 errors, using a similar framework by WFS in its Tier Rate Structure. The only difference between BWA and WFS’s COSA is that this time it’s guaranteed to make money
It’s apparent that BWA’s COSA violates the State’s Constitution’s pro-portionality requirement that states water fees shall not exceed the proportional cost of the service attributable to the ratepayer’s parcel. But don’t expect Zurn to understand this because of his limited qualifications to be GWP General Manager. The community is not being well served by having the position filled by someone with on the job training skills.
One member of the Coalition for Better Government said the following: This was “a political appointment to put someone in place without regard to his qualifications, but to put someone in place who will parrot the City Manager’s spin on how the Utility is run and not question any unethical dealings in the past that might reflect poorly on the City Manager.
This time Steve Zurn and the City Manager cannot claim ignorance since Prof. Zavos sent every city official, including BWA’s, his analysis with attachments and documents that outline several Prop. 218 violations in BWA’s COSA. • The recent water rate increase was passed by the City Council by a narrow 3 to 2 margin last June was just another way for justifying higher utility operational costs necessitating higher rates.
Arrogance breeds incompetence. Now the City in on the verge of facing another lawsuit for its lack of due diligence and incompetence by some members on the City Council. At least two members of the City Council had the wherewithal to dissent.
• The real question is, was this a political appointment, or did Scott Ochoa, City Manager, put Steve Zurn in this dual role to cover up tracks, of some “ominous” misdeed or allegation committed by Glenn Steiger under his tenure as GWP General Manager, that would have eventually come to light under a different outside leadership that would make Ochoa look bad?
Steve Zurn is a team player, who was rewarded with a substantial salary increase, by performing a dual role as long as he appeared to keep quiet. It should be noted that in June 2014, Steve Zurn stepped aside as head of public works, while retaining his position as GWP General Manager, while Zurn will keep his gross salary of $225,797, which was increased in 2012 when he took on the second job. Zurn said, “There’s not enough of one person to go around,” adding that each department deserves its own leader to give employees the attention and mentoring they deserve. (12) Why did it take Zurn over two years to come to this revelation?
(3) http://www.fiercesmartgrid.com/story/glendale-power-and-water-sets-gold-standard- ami/2013-04-03