The gist: Mayor-President Josh Guillory intends to stick with interim directors at LUS and LUS Fiber for several more months while moving to combine their IT personnel with LCG’s IT department. Both interim appointments, made by the last administration, were said to be “short-term” and of questionable qualifications. The reorganization has met some resistance.
The main pitch is cost savings. Pooling personnel could save $500,000 a year on IT services, according to Chief Administrative Officer Cydra Wingerter. This would primarily be achieved by using the consolidation to staff currently vacant positions, in a combined innovation group overseen by LCG Chief Information Officer Randy Gray. All 31 employees in the LUS network engineering division would come under Gray’s supervision.
“The next director is going to be in a better position,” Wingerter says. “It’s going to produce incredible savings across the board.”
Interim directors for LUS and LUS Fiber will remain in place for “several months,” Wingerter confirms. Lowell Duhon and Kayla Miles were installed over LUS and Fiber, respectively, by former Mayor-President Joel Robideaux to oversee an inquiry he launched into questionable payments made over the years by LUS and consolidated government to Fiber. Those payments allegedly amounted to millions in illegal subsidies to the municipal telecom. Both Duhon and Miles have remained in their positions despite the apparent wrap up of that investigation late last year. The findings were reported to the Public Service Commission, which has some oversight over Fiber, at the end of 2019.
The administration has been courting council members this week. Both parish and city council members would need to vote on a joint ordinance to approve the reorganization, just as they did with the administration’s successful bid to split up the Public Works Department. Administration officials met with City Councilwoman Liz Hebert and Parish Councilman Bryan Tabor Wednesday, rolling out a slide deck presentation to talk them through the plan.
“I feel like it’s moving too fast,” Hebert says. “If it’s a great idea now, it’ll be a great idea when the [LUS] investigation is over.” Hebert says she wants to wait for permanent directors to be appointed and for an independent, forensic audit of LUS and Fiber’s finances to be completed.
There is some concern about how the combined IT group would be budgeted and how it would affect the day-to-day work of LUS network engineers. It’s unclear how costs would be allocated between city and parish dollars and those of LUS ratepayers. LUS is self-funded by its utility sales, and annually contributes millions to the city general fund each year. Conceivably, the CIO would have control over the LUS network budget, which would in turn impact utility operations. The IT groups for LUS and LCG have roughly similar personnel costs, around $2.5 million.
Saving money may not be the right objective. Independent IT Consultant Doug Menefee believes LCG’s IT department is underfunded and understaffed. He argues that a reorganization could make sense, if the net effect is to improve the resources available for cybersecurity in particular. Cyberattacks hampered services in the city of New Orleans and the Louisiana Department of Motor Vehicles last year. He warns that saving money should not be the prime objective.
“Consolidation shouldn’t come from cost savings but from efficient use of talent,” Menefee says, noting IT talent can be tough to find. There’s usefulness, he argues, in having a “single throat to choke” and in pooling skills. LUS may have resources that LCG’s IT group could benefit from.
LUS advocates say this is a bad idea altogether. Former LUS top manager Andrew Duhon circulated an email to council members arguing that the plan puts LUS operations at risk. Duhon supervised the divisions targeted by the reorg. LUS network engineers are integrated into the utility’s everyday work, he says, including its power grid, cybersecurity systems, customer service applications and more.
A “whistleblower” letter called the reorganization a “power grab” to prop up the city’s 311 initiative. The anonymous letter, sent around to media outlets on Jan. 21, prompted Guillory to dismiss the concerns, saying the plan was at the “beginning of the beginning.” Claiming to be an LUS employee, the tipster said there is no reason to “move control” for the sake of collaboration.
LUS staff have reportedly been kept out of the loop. In his letter, the former CFO claims LUS staff members have been blocked out of the proposal’s development, which Wingerter denies. Asked to name specific LUS employees, she declined, citing only the interim director.
“Since LUS and LUS Fiber lack permanent directors, there is no real advocate for LUS,” Andrew Duhon writes in his letter to council members.
Lowell Duhon took a considerable pay bump when Robideaux made him interim LUS director. He served as Robideaux’s CAO for all but the last few months of Robideaux’s term, until he was moved to LUS to oversee the investigation, boosting his annual pay from $125,000 to $250,000. That substantial raise garnered suspicion that Robideaux’s motives for the appointments were a kind of patronage. Robideaux tied the leadership shuffle to a request by the PSC, which the PSC subsequently denied.
Consultants have questioned both Duhon’s and Miles’ qualifications. NewGen Strategies and Solutions, the consulting engineer required by LUS’ bond contracts, found both Duhon and Miles “lacking” in the appropriate experience to manage the day-to-day affairs of LUS and Fiber. The firm voiced those concerns in a letter sent to Robideaux in November. Robideaux mollified the consultant’s concern by insisting the appointments would be “short-term” until qualified directors could be appointed by a new administration in early 2020.
Wingerter says the inquiry is still going. And she notes that the administration and consulting engineer have a “difference of opinion” about Lowell Duhon’s and Miles’ qualifications. She said new questionable charges have surfaced but declined to go into details. Lowell Duhon’s role, however, is not limited to the apparently ongoing investigation, she says, adding that the former CAO oversees customer service, finance and other LUS activities.
“He was the boss of the previous directors,” Wingerter says, defending Lowell Duhon’s fitness to run LUS.
LUS and Fiber both face a great deal of uncertainty in 2020. LUS is in the middle of a power planning process, set to wrap up this year, that could lead to a decision to retire and replace the coal-fired power plant that accounts for half the system’s electricity generating capacity. Fiber’s fate is largely in the hands of the PSC, which is purportedly reviewing the results of Robideaux’s 2019 investigation.