Pressure Rising at the Water Utility

On April 6, Perwez Moheet, deputy director of the Austin Water Utility, announced his retirement. It wasn't exactly a shock, as Moheet, – who has logged over three decades of service with the city, including a stint in 2007 as acting director of the department – had been placed on administrative leave the previous week after the release of a report blaming him for a bungled hiring and appointment process.

The report's authors, from consulting firm MGT of America, concluded Moheet's hiring action "demonstrates a general disregard for the city-wide personnel policies and only serves to create (or exacerbate) suspicion and distrust throughout the Water Utility."

Announcing Moheet's retirement, City Manager Marc Ott released a statement saying: "I felt compelled to move the organization in a new direction. ... Perwez has contributed greatly to the success of Austin Water over his long career, but the poor decisions brought to light through the MGT investigation are clearly inconsistent with our goal of becoming the best managed city in the country." Last week, Ott told the Chronicle he had been "completely flabbergasted" by the appointments, that they "clearly violated a number of different policies and procedures from a personnel standpoint, and I just can't tolerate that."

However, the decisions that effectively cost Moheet his position – filling seven new AWU positions by appointment instead of using the traditional hiring process already under way – didn't occur in a vacuum. Faced with a record-breaking heat wave in the summer of 2009, the utility – tarred as being slow to respond to leaks – was under political pressure to step up its repair program, resulting in the creation of the group Moheet would later lose his job over. Intimations of racial animosity disfiguring the office culture – revealed in another report MGT prepared for the city – call into doubt the complaints that initiated the investigation. And Moheet, while the main force pushing for fast staffing, didn't even make the actual appointments himself.

In itself, it's a disagreeable personnel matter that city officials have decided to eliminate by forcing out one manager. But it's also a sensitive enough subject that very few of the principals involved are willing to discuss it substantively on the record – so we've pieced the story together from the available documents, interviews, and reports.

In brief, the dismissal has some City Hall watchers wondering whether the utility, faced with an embarrassing situation and an expensive report, needed someone to fall on his sword – and whether Moheet was essentially nominated for that task.

The Long, Hot Summer

The March 24 report from MGT accusing Moheet has an interesting background all its own. Directed by former Travis County Sheriff Margo Frasier, the $70,000 review and report investigated two distinct group allegations of discrimination and retribution at the Water Utility. The first considered Engineering Ser­vices Assistant Director Gopal Guthikonda, accused by seven complainants of gender and racial discrimination, retaliation, and more. MGT's findings exonerated Guthikonda on all counts and even sounded a counterclaim of collusion against the complainants, saying their responses to investigators' questions sounded like "someone had told them that if all of them stated the same thing that it would lend creditability to their claims." (See "AWU Supervisor Cleared of Discrimination Charges," April 2.)

The investigation into Moheet was prompted by similar complaints. Two utility employees, Onnie Bohr (female, white) and Kirk Obst (male, white), together alleged discrimination on the basis of gender and race; both had applied for one of seven newly created jobs in the Pipeline Operations division of the utility, and neither was hired. MGT's report found no evidence to support either's claims – while all seven of the hires were male, the interview process, such as it was, indicated female complainant Bohr wouldn't have been a top candidate regardless, and of the seven hires, five were Hispanic, one African-American, and one white. But while MGT absolved Moheet of equal opportunity employment complaints, the report had much more to say about the hiring process in Pipeline Operations.

The summer of 2009 was the hottest in Austin history, with triple-digit temperatures stretching well over two consecutive months. Heat waves tax utilities via high demand and strain the capacities and stress-tolerance of old pipelines. As drought conditions rose along with the mercury over the summer, so did the pressure on Austin Water Utility to respond to leaks quickly – which the utility did, by forming a new pipeline repair and maintenance team.

In fact, MGT traces the story back to the beginning of the year, in early January 2009, when a ruptured 24-inch water main at Sixth and Lamar paralyzed the already congested corridor. The break occurred around 10am on Jan. 9, 2009, and wasn't fully repaired until around 5am the next morning. According to MGT, Moheet "suggested that the inordinate amount of time it took the Water Utility to respond to and repair the main was a result of a lack of coordination and leadership in Pipe­line Operations," the department tasked with maintaining and repairing the utility's conduits.

In response, over the next few months, six new positions were created in Pipeline Opera­tions to expedite repairs: managers for four newly created divisions (Meter Main­ten­ance, Water Distribution System Mainten­ance, Waste­water Collection System Mainten­ance, Valve and Hydrant Maintenance), plus a superintendent and supervisor position. By the middle of May 2009, the six positions were filled with "acting" hires – appointees filling the positions pending a formal hiring process.

In June 2009, the four division manager positions were posted, all of which the acting directors applied for. In early August 2009, interviews started for the Water Distribution System Maintenance position; by mid-month the Valve and Hydrant Maintenance interviews began, which, due to a series of stops and starts, stretched all the way to Sept. 10, 2009. The acting Water Distribution System Main­ten­ance manager, Nowell Mojica, scored second in the interview process after another applicant, James Bennett, 73 to 69; Bennett was also the top scorer for the Valve and Hydrant position, over acting manager John Muraida, although the report notes that scores from one of the panelists, David Anders, Finance and Business Services assistant director, couldn't be found. (Anders says he submitted his scores to George Calhoun, Pipeline Operations assistant director and hiring manager for the four manager positions; MGT apparently couldn't find Calhoun's Valve and Hydrant interview scores either.)

By early September 2009, although the interview and hiring process was only partially completed, Moheet asked his superior, AWU Director Greg Meszaros, to appoint the six acting Pipeline Operations employees, plus an additional scheduler position, permanently. On Sept. 9, 2009, he requested the appointments again, this time in response to a congratulatory e-mail from the city manager, lauding the work in the newly formed department. On Sept. 14, 2009, Moheet presented Meszar­os with what MGT called a "justification memo" outlining the track records of the Pipe­line Operations appointees. Around that time, Meszaros spoke to Rudy Garza, assistant city manager over the utility, about the appointments; Garza says he told Meszaros to speak to the city's Human Resources Depart­ment about how to proceed, which he did by e-mailing HR Sept. 15, 2009, to say the acting directors were "exceeding performance expectations." (The appointments, despite the reported mismanagement, apparently didn't violate city code – at least according to MGT. The consultancy's report, while noting that Garza encouraged running the appointments by Human Resources, states "city policy does not require prior approval" by HR. But Ott says making appointments while the interview and hiring process was under way constituted a violation. "There were procedures that they should have followed, and they simply did not.")

Some two hours after that message was sent to HR, Moheet e-mailed notes of congratulation to the appointees in the four positions, including the four acting division managers. "You have done an excellent job in an acting capacity in this position and we look forward to you continuing to achieve great things for the Utility and its ratepayers," reads a sentence included in all of the messages.

Jumping the Gun

The first sign of backlash emerged Sept. 29, 2009, when HR Director Mark Washington e-mailed Moheet, admonishing him for not waiting for HR approval before making or publicizing the appointments. (Apparently Wash­ing­ton had been out the week the appointments occurred.) That's one of the facts MGT uses to indict Moheet in the conclusions section of the report, stating "it is clear," from early September 2009 on, that Moheet "embarked upon a unilateral campaign to appoint seven individuals," culminating in their appointment prior to HR's sign-off, despite the advice of Garza.

The MGT report argues against the stated reasoning behind the appointments: alternately, 1) that action was required because Pipeline Operations wasn't able to adequately respond because its managers were hampered by being in an acting capacity and 2) that, due to this temporary position, some managers "were not performing well because of their unwillingness to do what was necessary in an acting role." MGT writes that the first argument is undermined by Moheet's justification memo; the second argument is undone by itself, "as it calls into question whether these individuals had the leadership qualities" necessary for the job. (The only reference made to this second rationale in the report are paraphrased words from Moheet saying some managers "were hesitant to make difficult, but necessary decisions and provide the level of appropriate direction needed during complex times.")

Having found that the appointments were "not based, at least entirely, on legitimate business needs," MGT's concluding paragraph states, "The perception of most individuals with knowledge of the situation is that the process was halted because the persons who were serving in the acting roles were not the top candidates after the first two sets of interviews," and moreover, that at least one "would not be successful" under the city's promotional process – hence, the authors conclude, Moheet's "unilateral campaign."

The Heat Was On

It's strange that the report reaches this conclusion, since the pressure the utility was under is plainly spelled out in the report's own pages: a September statement from Moheet – coming in the midst of the stalled interview process – saying that AWU was receiving "a lot of heat from City Hall" regarding response times to water breaks.

It's indisputable that during that summer, the utility was under pressure to shorten Pipe­line Operations response times. The remarkable operational changes under way at the utility were outlined in a Sept. 15, 2009, e-mail from Pipeline Operations Assistant Director Calhoun, broadly announcing the appointments: Around 2007, the utility had been under a seven-day deadline for leak repairs. This window was reduced to three days, and then, once drought conditions reached the utility's Stage II water-rationing levels, was reduced further to a response time of three hours after the report of a leak. "This is an awesome task and one that has never been done before in the 20 years I have been with Austin Water," Calhoun wrote.

With those Stage II restrictions, including fines starting at $400 for illegal watering, having gone into effect in late August 2009 – just as the interview process was stalling out – undeniable political pressure was brought to bear on the utility. A sampling of headlines that summer included an Austin American-Statesman report that current drought levels, if they persisted, could mean Barton Springs going dry by the end of 2010. And all summer long, debate had roiled over Water Treatment Plant No. 4 and specifically whether historically low water levels in Lake Travis could sustain the massive new plant.

Less publicly apparent than the drought-exacerbated political pressures were the identity politics at the utility that led to the MGT investigation in the first place. Both the investigation clearing Gopal Guthi­kon­da and the separate Pipeline Operations investigation were initiated by complaints of racial discrimination – apparently reflecting the likelihood that there's a disgruntled subset at the utility that resents employees of a Middle Eastern or Indian background. For instance, in the Guthi­konda complaint, MGT found there was "some indication" that one of the parties alleging discrimination resented having to assist a recently promoted co-worker based on that co-worker's Indian heritage. In another incident recounted in the Guthikonda investigation, two other complainants told MGT they felt a "security breach" had occurred when an job applicant failed to check in with them prior to a job interview. However, instead of reporting the incident at the time, the two complainants only talked about it with their co-workers, "[leading] to speculation that there was an inappropriate advantage" given to the interviewee – an applicant of Indian background.

While it's hard to believe Moheet's ethnicity had anything whatsoever to do with Ott's decision encouraging him to retire, the repeated – and unfounded – claims of reverse discrimination that initiated both the Guthikonda and Moheet investigations raise troubling questions about racial tensions at the utility. Ott says embracing racial diversity and acceptance is "always on the radar in terms of the entire [city] organization, but given what we've learned more recently about the water department, we're certainly going to focus some attention over there."

Another question unanswered by the report is what role employees other than Moheet played in the admittedly imperfect hiring process. The so-called justification memo from Moheet to Meszaros was also signed by Calhoun, who was also tasked with overseeing the hiring process. MGT wrote, "Although the memo is essentially complete, Mr. Calhoun signs the memo to provide the appearance that he was involved or a part of the final personnel decisions in his division." However, a few days later, Cal­houn said he told Moheet the two acting division managers interviewed were not the top candidates after the initial rounds of interviews.

Later, Moheet presented the justification memo to Meszaros but did not discuss the results of the interviews with him. The report then says, "While Mr. Mes­zar­os stated that he did not know the status of the interviews, he did state that it would not have made a difference in his decision." It was soon after that that Meszaros consulted Garza about the appointments, and Moheet congratulated the appointees prior to HR's approval.

MGT lightly touches on the chain of command in its 31-point "Findings of Fact." Item 23 states, "As Director, the decision to appoint was ultimately made by Mr. Mes­zar­os." However, Item 24 states, "The decision to appoint was based on the suggestion and advice of the Water Utility's Deputy Director, [Perwez] Moheet."

Still Waters

Several principals in the MGT report, including Moheet, declined to speak with the Chronicle. Meszaros told me he had no comment about the MGT report or Moheet's retirement. Even a public information request to the city, dated April 9, requesting Moheet's employee file, was given a response deadline (under law) of April 23, which came and went; the files were finally provided a week later.

That's not to say the report – and Moheet's dismissal – hasn't been a topic of employee discussion. Carol Guthrie, assistant business manager with the local chapter of the American Federation of State, County and Municipal Employees, has been following the case closely and posed several questions. "This particular issue [the appointments] occurred in September [2009]. It was authorized all the way up the chain of command, and nobody had a problem with it then," she said, adding that practically nothing was made of it until the unfounded discrimination complaint. "I guess after spending $70,000 on a report ... they had to come up with a scapegoat. Now, they make it the focus of the investigation, and say, 'Oh well, we've handled the problem.' I think that they just used Perwez as a scapegoat because none of that chain of command wanted to accept responsibility for the original sign-off."

There's another question hanging over MGT's separate report absolving Guthikonda: If the firm's findings were conclusive enough to warrant Moheet's dismissal, then why hasn't any action occurred regarding the complainants who accused Guthikonda of discrimination – a charge MGT not only refuted but felt was coordinated, with complainants stating "things as fact for which it turned out they had no direct proof or knowledge." Ott said that since the allegations weren't substantiated, "we set that aside in the sense that there's no action to be taken relative to the specific complaints. But in my view, do we have diversity issues, sensitivity issues in the water department? The answer's yes. We certainly are going to address those by bringing in the kind of resources and expertise that can provide that kind of training," presumably as part of the increased ethics training the city instituted for employees.

While Ott's attempts to address issues at the utility are laudable, the summary dismissal of Moheet makes it abundantly clear that city officials intend to put the AWU appointment process – flawed, if arguably not in direct violation of city code – behind them. But if several of the specters raised by the report aren't resolved – chain-of-command issues, effects of pressure on a department already under tremendous resource stress and simultaneously buffeted by racial politics and resentments – it may not be so long before another pipe bursts at AWU.