07 Sep 2012
- Written by Jack Humphreville
LA WATCHDOG - The review of the Department of Water and Power’s two year, 11.2% increase in our power rates by the Ratepayers Advocate and PA Consulting confirmed that the Power System’s salaries are “significantly higher” than other utilities and that its health and pension benefits appear to be “more generous” than the industry norms.
The PA Consulting report also stated that there are significant levels of overstaffing, especially in Shared Services which employs 40% of the DWP’s full time staff. This compares to a national average of 20%.
There are also significant restrictions (or penalties) on outsourcing. This essentially prohibits DWP from hiring third party vendors, even for functions that are not a core competency to DWP or where the vendor is highly specialized and can provide the service more efficiently.
There also appear to be numerous work rules and other IBEW contract provisions that result in significantly higher costs and inhibit the development of more efficient systems and processes.
Unfortunately, there is very little that can be done until September of 2014 when the current IBEW contract expires.
In the meantime, DWP’s current system wide, three year, $449 million cost reduction program has resulted in labor savings of about $46 million a year as a result of a hiring freeze and a reduction in overtime. And the Department expects to save another $47 million a year through the elimination of 419 vacant positions, a savings of “only” $112,000 per position.
In its report, PA Consulting recommended that the DWP, the City, and the IBEW (which represents 93% of DWP’s employees) work together on achieving “transformational” savings that will result in significant savings and lower rate increases over time.
The recommendations included a 10% decrease in labor costs derived from increased outsourcing, reductions in the force, and possible salary reductions.
There are numerous areas for outsourcing, including, but not limited to, customer service, bill issuance and payment processing, collections, meter reading, customer information systems, fleet maintenance, security, and various human resource services.
Savings would also be derived from increased worker contributions to the currently free health care plan, including a 20% employee contribution, $25 co-pays for office visits, and $15 payment for prescriptions.
And along with a 1% increase in pension contributions, these recommendations would result in labor related savings of $136 million by 2017.
But the negotiation of a labor agreement that will benefit Ratepayers will not be easy, especially since labor negotiations are conducted behind closed doors with our elected officials whose campaigns have been funded by IBEW Union Bo$$ Brian d’Arcy.
For example, the IBEW was the largest contributor to Mayor Villaraigosa’s 2005 campaign for Mayor and Wendy Greuel’s 2009 campaign for Controller.
And during the November 2010 negotiations involving the DWP ballot measures, the Garcetti led IBEW 8 (including Zine, Wesson, Alarcon, Huizar, Reyes, Hahn, and LaBonge) were doing the bidding of Union Bo$$ d’Arcy as they stripped numerous provisions (including qualifications to be a Commissioner) from the ballot amendment and killed the measure that would have allowed the City Council to remove the General Manager or any Commissioner with a two-thirds vote.
This blatant conflict of interest where our Elected Elite are negotiating deals with the same public labor unions that financed their political campaigns is why the upcoming labor negotiations between the DWP and the IBEW must be open and transparent, not behind the closed doors of the super secretive Executive Employee Relations Committee.
Furthermore, these negotiations must also be conducted by the knowledgeable management of the Department of Water and Power (after all, they do know the water and power business) with the assistance of the Ratepayers Advocate to make sure that the Department and the Ratepayers are not going to be fleeced as they have in the past when Villaraigosa, Garcetti, and Zine “negotiated” the last deal that included a four year wage increase of anywhere between 11% and 19% depending on the cost of living.
And finally, the IBEW Labor Premium that has been extracted from the Ratepayers with the assistance their wholly owned cronies in City Hall is just another example of why Angelenos should vote YES on Proposition 32 (otherwise known as Paycheck Protection or Stop Special Interest Money) to limit the unbridled power that campaign funding Union Bo$$ Brian d’Arcy has over our water and power rates.
(Note: The DWP Committee will be meeting on Saturday morning at 8:45 at the Hollywood Constituent Center located at 6501 Fountain Avenue in Hollywood. Fred Pickel, the Ratepayers Advocate, will discuss the proposed rate increases. TRANSPARENCY will also be discussed. All are welcomed. Bring your own coffee.)
Vol 10 Issue 72
Pub: Sept 7, 2012