$3 MILLION PR CONTRACT BEFORE DWP FLEISHMAN-HILLARD VOTE DUE.

Byline: Harrison Sheppard Staff Writer

The Department of Water and Power board today will consider whether to renew a controversial $3 million public relations contract with the politically connected firm Fleishman-Hillard despite recent audits raising questions about the utility's public relations spending.

An audit last month by City Controller Laura Chick criticized Fleishman's oversight of a subcontractor on DWP's Green Power renewable energy program, citing a lack of control over invoices.

``The overall concern is the millions of dollars spent on public relations,'' said Rob Wilcox, a spokesman for Chick. ``The question would be on the need for those millions of ratepayers' dollars to be expended in that way, and we look forward to the City Council looking over our audits and looking at the question of public relations.''

At least two council committees plan to hold hearings in coming months to examine some of the issues raised by Chick's audit.

The concern, Wilcox said, was not about Fleishman specifically - other than its management of the subcontractor - but about overall spending on public relations. According to DWP officials, the utility is spending just under $6 million this year on public relations - $3 million to Fleishman, $2 million to the Lee Andrews Group and less than $1 million for an advertising and community relations partnership with the Los Angeles Dodgers.

Fleishman-Hillard made the first contribution to Mayor James Hahn's anti-secession campaign and has contributed a total of $15,000. Doug Dowie, general manager of Fleishman's Los Angeles office, played a key role in trying to persuade the Valley Industry and Commerce Association to remain neutral on the secession issue. The association is expected to announce its position today.

The Lee Andrews Group was the subcontractor that Fleishman-Hillard was criticized for not properly overseeing, but that contract is now a separate arrangement, Dowie said. ``The Lee Andrews Group now has its own contract with the DWP to work in the Green Power area.''

The DWP on Monday also released an internal audit of the Green Power program commissioned by DWP general manager David Wiggs that confirmed many of Chick's findings. Among its dozens of criticisms, the internal audit found problems with oversight of the Lee Andrews contract and raised questions about spending on other promotional activities.

DWP chief administrative officer Frank Salas said even though the DWP has a monopoly in the city, it needs to spend millions on public relations in part because it doesn't know whether it may lose that monopoly someday through changes in the law.

``We're not being complacent,'' Salas said. ``We're not taking anything for granted.''

Salas said the department plans to hire a consultant soon to help implement recommendations from both audits.

Salas added that the contract with Fleishman provides an important service to the department by helping it communicate with its employees, customers, the media and legislators. Earlier this year, Salas noted, J.D. Powers and Associates gave DWP the highest ranking for utilities in the Western U.S. for midsize business customer satisfaction.

Councilwoman Ruth Galanter, who chairs the council committee that oversees the DWP, said she plans to hold hearings in mid-November on the Green Power program, and the Audits and Governmental Efficiency committee also plans to examine Chick's findings.