Chain of command

Bernero has been coy about the formal change he´ll propose for BWL at the state of the city address Jan. 29. But not about what he wants city voters to approve.

“The structure is wrong,” Bernero said, referring to the relationship between the utility, the commissioners and the city as well as the chaos and cost surrounding the firing of the last three general managers.

“These are good people trapped in a bad system,” he said of the commissioners. “We need greater accountability. It´s not new that these are the issues that develop.”

Bernero said that making the BWL general manager a member of his cabinet would be better for the city and utility. “We would know what BWL was doing and it would know what we were doing.”

This now is happening informally. Bernero said that recently fired general manager Peter Lark had been attending cabinet meetings.

“I told him that I viewed him as a department head,” Bernero said. “He chafed at any accountability.”

Bernero is particularly incensed by the employment contracts that Lark wrung out of the BWL board, which he said wouldn´t have happened if he had been in charge. When Lark was hired in 2007, he received a one-year contract, a salary of $190,000, good benefits and no severance provisions. By 2013, Lark was making $258,502 a year with a five-year contract that automatically renewed each year. He had negotiated retention bonuses and a severance package that could pay him as much as $900,000 if he was dismissed without cause.

Bernero said this sort of compensation package is unacceptable for city employees, adding that he knew nothing about it when BWL´s commissioners negotiated the latest contract.

But Bernero has hardly been a handsoff mayor. “I communicate with board members on a host of issues,” he said. The contract seems an odd issue to slip under his radar.

The formal relationship between the city and BWL is designed to offer the utility political insulation, to prevent undue meddling and ensure financial independence. But as the vote to fire Lark demonstrates, some commissioners know who is really in charge. Looking back even as they look ahead, they recognized that Bernero until recently was a strong and  vocal Lark supporter.

Bernero praised him for his help with Accident Fund power plant headquarters project, for the new REO Town power plant and for his support of in-lieu-of tax payments to the city. Compliant by nature and culture, it would have been unlikely for commissioners to challenge the steady salary and benefit gains from such a well regarded mayoral favorite.

And in truth BWL is a political creature of a political culture. The 2014 July quarterly campaign documents filed by Bernero´s reelection operation list BWL officials as prominent contributors. Lark gave $125; dismissed chief administrative officer Susan Devon, $125; corporate spokesman Steve Serkaian, $250; assistant general manager George Stojic, $125; commissioner Marge Bossenbery, $100; and there are more.

Bernero acknowledges that he has placed at least eight people, most of them political allies, within BWL. Notable are Serkaian, who previously worked for the mayor and the Lansing school system, and most recently Trent Atkins, BWL´s new emergency operations manager.

“I recommended a few people. They are good hires and they´ve done a good job,” he said, denying that the placements were political. But if Bernero succeeds gaining more direct control of BWL, there are likely to be repercussions outside of the city, in the communities that buy their power from Lansing.

Bernero acknowledges the possibility.

“I fully expect Fletcher and Triplett to bitch and moan, that they will wring their hands. For them it is something to complain about.” He was referring to Delta Township Supervisor Kenneth Fletcher and East Lansing Mayor Nathan Triplett, channeling his frustration about their lack of support for meaningful regional cooperation.

But another setback in his bid for regionalism may not be Bernero´s biggest challenge. Like the dog who catches the car, securing more control of BWL may be more of a challenge than the administration wants or needs.

BWL as an enterprise is significantly larger than the city. It has total assets of $1.1 billion, annual operating revenues of $348 million and net assets (equity) of $578 million. The city´s total assets are $705 million with a net position or equity of $398 million.

A utility like BWL is a complex mix of finances, regulations, power plants, water systems distributions lines, personnel and politics.

“Look at my departments. They run a tight ship. When I talk about accountability, the police chief is accountable.” And so is the head of the Parks and Recreation department. But there is a big difference between making sure umpires show up for summer softball games and ensuring that BWL is a top flight utility.

The city´s search for a new general manager isn´t made easier by the chaos surrounding Lark´s dismissal. It will be costly and the vagueness of the reporting structure will simply add to the challenge.