LA WATCHDOG - Why are campaign funding IBEW Union Bo$$ Brian d’Arcy and City Council President Herb Wesson in such a rush to approve a four year contract between our Department of Water and Power and the IBEW, the union that represents over 90% of the Department’s employees?
Or perhaps a better question is, “What are Bo$$ d’Arcy and Herb trying to cover up?”
Last week, Bo$$ d’Arcy, frustrated by Mayor Eric Garcetti’s failure to approve what d’Arcy calls a “good deal for the City,” threatened to withdraw his current proposal unless the City quickly approved this deal.
However, this deadline has now been extended to August 30 as a result of Herb Wesson’s offer on behalf of the City Council to serve as “partners willing to facilitate discussions in the interest of the ratepayers.”
Under the proposed contract, the City Administrative Officer and DWP projected savings of $464 million over the next four years, an average of $116 million a year. And over the next 30 years, estimated savings are $6 billion, an average of $200 million a year.
Of this $6 billion in savings, $2.5 billion is due to the creation of a new pension tier for newly hired employees and $3.5 billion due to the deferral of scheduled cost of living adjustments (“COLA”).
As part of this deal, the DWP pension plan and the City would settle the Romero v. City of Los Angeles law suit. This would saddle the DWP with approximately $200 million in unfunded pension liabilities that accompanied the 1,600 surplus City employees that were dumped on the DWP by the Villaraigosa administration. This sleight of hand maneuver will cost Ratepayers about $375 million over the next 15 years, or about $25 million a year.
Under this extension of the current contract that is due to expire in 13 months, the take home pay of current employees will not be reduced. Rather, it will remain flat as contractually obligated COLAs of between 2% and 4% will be deferred over the next three years. In October of 2016, DWP employees will receive a raise of up to 4%.
During this deferral period, the scheduled COLA increases will be considered as part of the employees’ contribution to their current and retiree health care plans.
The DWP will also establish lower starting salaries for 28 entry level positions that are similar to those of other City employees.
Furthermore, the DWP would establish a new pension tier similar the new pension tier for the city’s civilian employees, except the DWP employee contribution is lower and does not provide the recalculation in case of higher annual costs and investment losses.
While the new contract that was negotiated by the City Administrative Officer based on instructions from the super secret Executive Employee Relations Committee and endorsed by Chief Legislative Analyst, the Ratepayers have not had the opportunity to review and analyze the proposed $6 billion in savings, the underlying assumptions, and the impact on our ever increasing water and power rates.
Quite frankly, the proposed savings of $464 million over the next four years and $6 billion over the next thirty years stretch the bounds of credibility and give credence to the old adage: Figures never lie, but liars figure.
Rather than trying to steamroll the Ratepayers, the City Council needs a detailed analysis of the proposed contract which has so many moving parts that it is impossible for mere mortals to understand. This analysis would involve not only the Ratepayers Advocate, but an independent third party who has the expertise and experience to understand compensation schemes and make recommendations regarding the “transformational” changes required to effect major cost reductions in the future.
Importantly, and absent from the proposed contract, DWP’s work rules must be reviewed before entering into a new arrangement with the IBEW. New work rules would provide for comprehensive benchmarking not only of DWP salaries and benefits, but of its operations involving Once Through Cooling, the Power Reliability Program (think utility poles), and Utility Built Renewables. The review would also address process improvements, staffing levels, and the outsourcing of non core functions. The review would analyze all of the many side agreements between the Department and the IBEW, including the unsupervised Joint Training and Safety Institutes.
The approval of the proposed IBEW Contract needs to be open and transparent and not conducted behind closed doors because Ratepayers, Neighborhood Councils, and voters do not trust the Herb Wesson led City Council.
We had the blatant lies that City officials dished out about the City’s finances in their efforts to pass Proposition A, the permanent half cent increase in our sales tax.
The Wesson led City Council has also blessed land deals that have benefitted large campaign contributors, including dollar a year leases to politically connected organizations, the $60 million gift to the $64 billion Westfield Group, and the $300 million variance given to New York City based Millennium Partners that will turn Hollywood and Vine into a parking lot.
Furthermore, City Hall has is not to be trusted in labor negotiations involving campaign funding union leaders as was clearly demonstrated in 2007 when they gave away the store to the city’s workers and in 2005 and 2009 in the negotiations with the IBEW.
The Wesson led City Council will spin many reasons why this contract needs to be ratified now, including the ability to save $25 million by deferring the contractually obligated COLA in October. On the other hand, we have the opportunity to save hundreds of millions of dollars through reasonable changes in the DWP’s Cadillac healthcare plan, its pension plan, and its many restrictive work rules.
Now is the time for the Ratepayer Elected Eric Garcetti to step up to the plate and demand that the DWP Ratepayers and voters of Los Angeles have the necessary understanding of the proposed IBEW contract so that the negotiations are open and transparent and, in the words of Herb Wesson, in the “best interests of DWP Ratepayers and the residents of the City of Los Angeles.”
(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]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
-cw
CityWatch
Vol 11 Issue 65
Pub: Aug 13, 2013