Surveying the BWL political wreckage

For a politician, it´s self-inflicted wounds that hurt the most.

Lansing Mayor Virg Bernero surely feels the pain after his failed bid to take control of the Lansing Board of Water & Light, the city´s semi-autonomous public utility.

Bernero orchestrated the ouster of BWL’s general manager, J. Peter Lark, who resisted the mayor´s push to treat the utility like other city departments. Prodded by Bernero and increasingly dissatisfied with the general manager´s performance and attitude, five BWL commissioners voted to fire MICKEY HIRTEN Lark for still unspecified causes. Bernero hinted — broadly — at changes in the City Charter to curtail BWL oversight by the board.

And then it all fell apart.

There was predictable opposition from BWL´s unionized workers — they have a sweet contract from a compliant employer — and public criticism by East Lansing Mayor Nathan Triplett and Delta Township Supervisor Ken Fletcher —“bitching and moaning” is what Bernero said he expected. More sobering were the warnings by city and regional business leaders about politicizing the utility. Two weeks after the coup, Bernero bailed on the “city department” plan. But the damage was done to the city, the utility, the mayor and Council.

Only BWL customers seem to have escaped the carnage, and from the start it was unclear how any of this was good for them. The lights are on. But they will pay for the failed power grab: perhaps $900,000 in severance payments to Lark, legal fees to untangle the firing, recruiting costs for a new general manager and what could be a higher than average salary for the new CEO´s services.

Bernero said in his State of the City address last week that he wants a charter measure to limit long-term contracts and generous severance agreements for city employees. Lark during his seven years as general manager had wrangled both from BWL´s commissioners.

But this proposed charter employment requirement, if approved by city voters in May, certainly will affect BWL´s ability to hire the top-flight talent it needs to oversee the utility. It won´t go unnoticed by job candidates that BWL has fired three general managers in the last 10 years. The utility is a CEO graveyard.

A talented executive considering the job will recognize that running BWL historically is a short-tenure assignment that could be even shorter with Bernero´s push for contract and severance limitations. In the end, the city will fill the position, but should expect to pay dearly to compensate for the risk of working in Lansing´s politically charged environment.

Reworking his plan to take control of BWL, Bernero has instead proposed that he appoint an inspector general with the power to conduct performance audits. Call it the mayor´s mole. Considering that the mayor appoints the commissioners and has political allies in key positions at BWL, it seems unnecessary, costly and without any obvious benefit to ratepayers, who, of course, will, pay for this political face saver.

But Bernero is adamant that the city needs expertise to keep track of BWL. “The inspector general will be there to give us information, so that the mayor and the Council can truly be informed. The system we have now doesn´t facilitate the accountability that the framers anticipated,” he told me.

He said that he hopes it works. “If it doesn´t, in a few years I may come back with the department plan.” For the moment, Bernero´s comfortable with what he calls a “paid watchdog” who is a member of his cabinet.

But why does it have to be so complicated? Why can´t BWL managers and city officials simply meet regularly to coordinate plans and policies? Why should they have different agendas? Aren´t both working to serve the public?

One of the utility´s problems is the political nature of the BWL board, which is composed of appointees from the city´s voting wards as well as at-large members. In many ways the commissioners aren´t up to the challenge of overseeing the utility, and they acknowledged as much after BWL ragged 2013 ice-storm performance.

Resolving to improve their oversight, they were swept up in Bernero´s frenzy to rid himself of Lark. It was a messy business: private meeting with the mayor, side conversations, factions and personal slights. To what end? Since Bernero no longer wants to make BWL a city department, nothing has changed. But in the wreckage may be opportunity: a better board of commissioners and another look at the benefits of selling the BWL.

Within the communities served by the BWL, there is expertise to reform a board of commissioners with skills that strengthen the utility. East Lansing, which gets a non-voting position on the BWL board starting July 1, has nominated Robert B. Nelson, a former Michigan Public Service commissioner and from 1987 to 1999 president of the Michigan Electric and Gas Association. This is a commissioner who can bring meaningful oversight to BWL.

Tim Daman, who heads the Lansing Regional Chamber of Commerce, said his organization welcomes the opportunity to work with the city to fashion a board of commissioners with strong professional expertise. With 1,100 members, Damon is confident that this talent exists.

Then there is the larger question of whether it really makes sense for the city to own a utility. Certainly there is some measure of pride and politics at play, but does it still make financial sense? The gap between the rates charged by providers like Consumers Electric and BWL is shrinking. For my electric bill in January, the difference between a bill from BWL and what I received from Consumers is just $3.88 — about 4 percent.

Rates from a commercial utility might be slightly higher than BWL´s right now, but money from the sale of the utility, which last year had net assets in excess of $600 million, could transform Lansing. The city could invest in education, health care, job creation, the arts and more. If ever there was a time to consider shedding this property, it´s now, during what might charitably be called a transition period. Considering the last 10 years, Lansing may have better luck selling BWL that it´s had running it.