Year of transition for PUD

They all found multiple areas of risk, including a lack of internal controls, lack of compliance in various areas, an on-the-job injury rate triple the industry standard, and inefficient and non-compliant financial practices.

They found a large backlog of uncompleted work orders, and a lack of cohesive, global operational oversight.

Kline created five new management positions, hiring four externally. In July, he reported to the board that progress was being made.

Under the sweeping changes, employee discontent bubbled. At least twice earlier this year, people reached out to the Chronicle, saying Kline was hiring his friends to be in management.

Kline said he did hire away two people from his former employer, Eugene Water and Electric Board.

One is chief financial officer Harvey Hall, taking a position the PUD once had, but let lapse. Kline filled it again.

The other is Kevin McCarthy, director of utility operations. He agreed to come out of retirement to replace the former operations supervisor who oversaw the line crews and tree crews.

Kline also hired away a human resources director from the outside company that had been providing human resources work on contract. Cyndi Gentry’s job as director of corporate services also includes other duties like public affairs and energy management.

He hired Jimmy Wells from Goldendale for operations support, including fleet maintenance and operational safety.

“Our operations were, I’ll say, managed disparately, so this was an opportunity to centralize those functions,” Kline said.

Finally, he internally transferred Steve Horzynek to a new position of program manager of asset management.

By July, tensions were such that nine PUD employees, all members of the only unionized group at the PUD, representing linemen and meter readers, wrote to the PUD board, asking for Kline’s ouster.

They noted that “many” other employees agreed with them, but were afraid to sign the letter for fear of retaliation.

The letter called Kline “adversarial” and said McCarthy was intimidating and had belittled people about their weight, physical activity and driving history.

McCarthy, who described himself to the Chronicle as “an Irish from Brooklyn,” bluntly said the PUD’s practices were outdated, and his reaction to what he found when he arrived in February was “catatonic shock.”

But he also noted being outdated is common in monopolies like utilities, because they lack the competition that might spur efficiencies and upgrades.

“They needed a lot of help: fleet, regulatory stuff, safety, facilities,” he said. “They were just old school.” He said it was out of date “in terms of things not being in place, behavior a little out of whack, technology.”

Despite the upheaval, McCarthy said, “I love being here. I like the people, they’re great people.”

He also emphasized several times that the linemen are “good guys.” But, he noted, “when things don’t go their way, these are the outcomes that they do. This is not untypical of what goes on” with linemen anywhere.

McCarthy said the state of the PUD was “not anyone’s fault, there’s no blame, it’s just the previous regime never brought the utility along into the 21st century for a lot of things.”

He owns up to using some foul language when a lineman “basically challenged” him on driving a commercial truck one day. But the person apologized later, and McCarthy apologized also.

The letter writers said the new human resources person “is just another friend hired by the adversarial general manager and we employees feel we have nowhere to turn.”

They said they also had no faith in McCarthy. They noted that on the first day on the job, he “bragged” about driving a truck during a union strike at his previous work.

Then, they wrote, “we heard from him how everything was not done right here. He mentioned time after time how [Eugene Water and Electric Board] was the best at everything and that we were going to change to match what they did.”

McCarthy said, “It’s a little more accountability, people don’t like that sometimes.”

McCarthy said the linemen are “still a little cold to me,” but things have improved since a new line superintendent was hired two months ago to be their direct supervisor.

Kline feels the work environment is getting incrementally better all the time. “It feels better today than it did last week, we’re on the path.”

PUD board member Dan Williams said, “obviously, lots of change is going on, change brought about by changes in the industry as well as changes in technology, and it has to do with some of the internal changes that are going on.”

Not only is the power world changing, but the PUD itself is experiencing change not only since Kline arrived, but because a wave of retirements have occurred.

Williams said, “We hadn’t been aware of these things” that impacted the wider power world. “We hadn’t been investing in infrastructure as fast or as much as we should have and some of it had to do with not enough personnel to get the job done. We had good personnel, we still have good personnel. The turnover’s just all been because of retirements. We have excellent personnel.”

Williams added, “I think we’re going in the right direction. It’s going to take awhile. There’s quite an issue with any change. Humans resist change. I’m no different.”

Williams said the board didn’t respond to the letter from the linemen, because it wasn’t presented to them during the board meeting, but prior, while they were eating in the lunch room.

In terms of doing more planning and not just reacting, Kline gave the example of a piece of power equipment that gets broken every year on Mill Creek because turkeys hop down a hillside and damage it. Rather than repair it every year, as was done in the past, the equipment is being moved.

The turkey problem was unusual, since squirrels are the biggest cause of outages, Kline said.

On the financial side, Kline said a number of efficiencies have been found.

He learned that a financial system the PUD purchased in 2010 had a number of time-saving functions that were not being utilized. Once they were, payroll work that once took 20 hours is down to four.

In another example, staff were stuffing envelopes for late notices and disconnects, but Kline learned that service is covered by its billing service, which is now doing that work.

He said the PUD has had clean external audits, but he would be seeking a new auditor next year.

Kline told the board in March that “Once identified and explained, employees have been very open to improving controls, and in many cases have been self-disclosing areas that they have been concerned with themselves, but did not know how to address on their own or through management.”

In another move to save time and money, the PUD will also be jobbing out tree trimming. Two of the three people who now do that work for the PUD will be transferred to other jobs internally, he said. The status of the third employee is still being worked on by human resources, Kline said.

One of the tree trimmers will become a lineman apprentice and the other will become the utility arborist. The plan now is, instead of simply cutting trees, the PUD will work with customers on possibly trimming them instead if feasible, Kline said.