MUST READ: Will Campaign-Funding Union Bo$$ d’Arcy Own City Hall?

Underlying this “investment” by Bo$$ d’Arcy is his desire to negotiate a new, very lucrative union contract for his members who comprise over 90% of the employees of our Department of Water and Power. 

The current contract between DWP and the IBEW expires in September of 2014.  

However, the Bo$$ does not want to leave anything to chance if the current City Council does not renegotiate the existing contract by June 30, Mayor Villaraigosa’s last day in office. 

As a result, the IBEW is pressing the secretive Executive Employee Relations Committee and the existing City Council to extend the IBEW’s existing contract prior to the new installation of seven new Council Members and a new mayor on July 1, 2013. 

By entering into a new contract prior to the change in leadership, there will not be a thorough airing of the independent and well documented findings and recommendations outlined in PA Consulting’s report of August 23 involving the “efficiency” of DWP’s work force.  

The issues include “materially higher” salaries for DWP employees compared other regional utility workers, very “generous” healthcare and pension benefits, overly restrictive work rules that limit DWP’s operating flexibility, the inability to contract out noncore services, overstaffing, and the need for “benchmarking” DWP’s operations against other utility peers. (Take a look.)

http://opa.lacity.org/documents/CostReductionReport20120823.pdf 

Unfortunately, the review of the PA Consulting findings and recommendations is on a slow boat as the result of considerable political pressure by the IBEW and its lackeys on the City Council. 

When the City Council approved the 11.2%, two year increase in our power rates on September 25, it requested that the DWP, with the assistance of the Ratepayers Advocate, the City Administrative Officer, and the Chief Legislative Analyst, report back to the City Council within 90 days regarding the implementation of ten of the recommendations of the independent third party reviewer, PA Consulting. 

However, after six months, there has been no public review or analysis of the PA Consulting recommendations (and their implementation) by the Energy and Environment Committee headed by the politically ambitious Jose Huizar or the politically appointed DWP Board of Commissioners.  

Nevertheless, the IBEW and the EERC are now engaged in secret contract negotiations that call for increased levels of compensation and benefits despite the fact that DWP salary levels and benefits are dramatically higher than other regional utilities. 

The EERC and the City Council should not be engaged in any contract negotiations with the IBEW until there has been an extensive review, analysis, and public discussion of the findings and recommendations of PA Consulting. 

This dialogue would include the possibility of saving $50 million a year by having higher co-pays for prescriptions and visits to the doctor’s office, increasing employee contributions to 20% of the cost of the very generous healthcare benefit, and increasing pension contributions by 1%. 

It would also include a discussion of DWP staffing levels, especially in Joint Services, and whether it is worthwhile to contract out non-core functions such as customer service, fleet maintenance, and security services. 

Any review would also include an analysis of the DWP’s pension plan which is underfunded by $2.3 billion assuming an investment rate assumption of 7.75%.  However, this liability would increase to over $4 billion using a more realistic investment rate assumption, lowering the funding level to about 65%.    

These negotiations should not begin until after July 1 when we have a new mayor and seven new Council Members who can be held accountable for the new contract.

Any negotiations should be also open and transparent and not conducted by the EERC behind closed doors in the bowels of City Hall. 

The negotiations should be led by DWP management since they are obviously more knowledgeable about the operations of the Department than our Elected Elite who have absolutely no clue on how to manage an engineering and capital intensive business with over $4 billion in revenues. 

Any contract should also include provisions that require periodic benchmarking where the efficiency of DWP’s operations are compared to those of other regional utilities. 

Any new contract and its terms must also be reviewed and analyzed by the Ratepayers Advocate and discussed with the Ratepayers and the public since our Elected Elite have a blatant conflict of interest. 

Over the years, the Mayor, the Controller, and most of the members of the City Council have received contributions from the leadership of the campaign funding unions.

Alternatively, several non-compliant members have had opponents whose campaigns have been financed by significant IBEW contributions, such as Bernard Parks in 2011 when over $1 million was spent in an attempt to oust him from office.  

Campaign funding Union Bo$$ Brian d’Arcy is spending millions to own City Hall so that he can preserve the IBEW Labor Premium that costs Ratepayers an estimated $250 million a year.

Rather than entering into a new, expensive contract with the IBEW this year which maintains the overly restrictive work rules, the City needs to analyze its relationship with the DWP’s domineering union to make sure that Ratepayers are being treated fairly, in an open and transparent manner, especially since our power rates are anticipated to increase by 36% over the next five years.

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee,  the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw

CityWatch

Vol 11 Issue 23

Pub: Mar 19, 2013