LOS ANGELES -- S. David Freeman, a general manager credited with improving the fortunes of the Sacramento Municipal Utility District, this week said he plans to resign on Feb. 1.
Freeman, 67, did not specify his future plans, but he reportedly is considering a run for the state Assembly next year.
The district's board of directors hired Freeman -- a veteran of the Lower Colorado River Authority and the Tennessee Valley Authority -- in 1990, and gave him a five-year contract.
Municipal bond analysts generally credit Freeman with helping calm the district after a tumultuous period in the late 1980s.
Freeman "has been a stabilizing influence," said Philip Edwards, a director of Standard & Poor's Corp.
Problems at the district began snowballing a few years ago, when major capital expenditures and heavy borrowing for an overhaul of the Rancho Seco nuclear power plant weakened the district's finances.
Friction among board members, and clashes between the board and management heightened the turmoil and led to high executive turnover.
Freeman, however, is leaving a much different utility.
"I am proud of the turnaround at SMUD," Freeman wrote this week in his resignation letter to the board. "I have completed work on SMUD's 1994 budget and am pleased that costs are under control and no rate increase is needed.
"This is my fourth year in a row as general manager that we have held the line on rates to our customers" while providing pay raises for employees, Freeman said.
Freeman was traveling yesterday and could not be reached for comment.
In an interview last year, Freeman stressed the district's turnaround is "not due to public relations; it's due to performance."
One of the district's accomplishments under Freeman has been development of new generating resources, following a vote by local citizens in 1989 to close the Rancho Seco plant.
The district is in the midst of constructing or planning various cogeneration projects to help diversify its power supply. It also is pursuing other options -- including increased conservation -- to balance demand and supply without relying so heavily on purchases from private utilities.
Municipal analysts also have lauded Freeman for developing a constructive working relationship with the board while simultaneously improving the utility's standing in the community.
"The stability of management as well as the board has contributed to the improved rating" of the district, Edwards said.
The district's bond ratings at one time tumbled to triple-B levels, but have since been restored to single-A levels because of the turnaround.
District officials acknowledge that challenges remain. But, Freeman said last year, "We're way beyond the comeback trail."
Freeman is also leaving on amicable terms with the district, which Edwards termed important.
"This type of turnover is different from the other type," which had stemmed partly from friction with a divided board, Edwards said.
Now, Edwards said, his agency hopes "there continues to be stability."
The district is expected to conduct a nationwide search for a successor, and also examine internal candidates.
Colleagues have said that Freeman, a self-described utility repairman, tends to get restless once he engineers a turnaround. Viewed in that light, his resignation is not a total surprise.
He wrote in his resignation letter that "the unsung heroes of this turnaround" are the 2,300 SMUD employees.
Freeman, a Democrat, may in 1994 seek the state's Fifth Assembly District seat currently held by Barbara Alby, a Republican. Alby won the seat in June to complete the term of B.T. Collins, who died in office. Collins was a former assistant state treasurer and investment banker.
The district is amending the official statement for its recent $141.1 million refunding to reflect Freeman's resignation.
