Getting the best DWP deal

In the midst of this year’s mayoral campaign, the union representing most Los Angeles Department of Water and Power employees made city officials an offer they apparently couldn’t refuse.

The International Brotherhood of Electrical Workers Local 18 would scrap the pay hike its members were due beginning Oct. 1 and instead start in on a new multiyear deal featuring three straight years without cost-of-living increases — the first no-raise years at the utility in two decades. There would be up to a 4% base salary increase in the contract’s final year, pension concessions of a sort and a somewhat convoluted claim that DWP workers would for the first time ever contribute toward their healthcare costs.

The savings to the city over the four years of the deal, compared with continuing the terms of the current contract, would be $415 million. City officials estimate the present value of savings to be reaped over the next 30 years at $4 billion.

Not bad, and after Friday’s public hearing, it became fairly clear that the City Council was ready to grab it. But it’s an offer that Mayor Eric Garcetti is refusing, and he’s right to do so. The IBEW has made a good start, but it must commit to deeper reforms and a greater role in improving the city’s fiscal health.

After all, Local 18’s request for early contract talks and its offers to forgo some raises did not come solely — or even largely — out of a spirit of generosity. Union leaders know they could face increasing pressure to slash pay and health and retirement benefits, perhaps in the form of ballot measures. They know the public is running out of patience with them and with the high compensation that contributes to ratepayers’ bimonthly bills. Some of that outrage is misplaced, but it’s real and a fact of city politics.

Residents are tiring of labor’s overreaching through work rules like the one reported in The Times this month that allows employees to take virtually unlimited sick days just on their own say-so, without evidence of illness. Or the one reported in The Times more recently that grants extra hours, at overtime pay, to employees who could have performed work that was instead contracted out. Controller Ron Galperin has identified 616 pay codes representing compensation that DWP workers can earn beyond their salaries. Some of those perks will likely get more public scrutiny in coming weeks.

Work rules are often created through side agreements negotiated separately from the contracts that cover base pay and benefits, and part of the proposal now being mulled by the council is that labor and management will commit to talk about those rules in the future. That’s not enough. Even if such rules aren’t generally discussed in regular contract negotiations, they should be, because they have a direct role in the DWP’s rates, questionable business efficiency and lack of motivation to change.

City leaders should also take a more careful look at the union’s proposed salary giveback. The money that would not go to pay raises in October would instead go into a fund to cover a portion of management’s ongoing burden to pay all health benefits. It’s not as though the union is proposing that DWP employees for the first time pay a portion of their medical premiums or be subjected to deductibles. The employer would still, as always, be on the hook for the entire cost of worker and retiree health benefits. A City Council analysis applauds the proposal for providing the groundwork for future employee participation in paying for future health benefits under future contracts beginning, at the earliest, four years from now. That’s not progress. That’s talk about progress.

The proposal includes additional employee contributions to the retirement plan, but for newly hired employees only. The pension proposal falls short of the concessions made by employees subject to the city’s two other pension plans. They can do better.

The need for concessions is not, and should not be, motivated by resentment by private sector employees that they don’t have such lucrative pay packages. There is not, and should not be, an employee race to the bottom. City employees do good work, and many DWP workers risk their lives to keep the lights on and the water flowing in Los Angeles.

But there is only so much money to go around, and each of the parties has designs on it. Employees want it in their paychecks now and in retirement, and who wouldn’t? But DWP revenue is also needed for long-deferred repairs and maintenance, and for updating a system that was built decades ago for a city a fraction of the size of this one. Some city leaders want it for additional environmental programs, some want it for job training, and all want it to keep the city budget balanced. Ratepayers want it to keep their bills low, and the demand is quite reasonable; it’s their utility, their city. Employees cannot reasonably expect to get a bigger piece of the pie each successive contract if it means all other interests will have to accept successively smaller cuts.

It’s quite startling, or at least it should be, how quickly the City Council appears to have embraced the contract offer, how readily council members have undermined their own position as management — calling, for example, for strike preparations — and how urgently members appear to want the deal sewn up by Sept. 1. It’s hard not to see politics in that: Most council members either were elected with the support of the IBEW or have aspirations that could be furthered by its support in the future.

The current labor contract runs through the middle of next year, and under normal circumstances, talks would be beginning, not concluding, just about now. But as long as those talks are underway, they need to be focused. There are issues that need to be aired to keep both the city and its utility on a viable course into the future.