LADWP, Union Reach Labor Deal

By Published On: August 30, 2013

After months of back-and-forth negotiations, the Los Angeles Department of Water & Power settled on a new labor deal with the union that represents over 90 percent of the muni’s employees. Recently elected Los Angeles Mayor Eric Garcetti called the deal a major step in an attempt to “reform” the LADWP. The muni has been a lightning rod for criticism the past several months because of a pay structure some in city government have said is too high. There also have been complaints that the health benefits are too generous. Under the four-year agreement with Local 18 of the International Brotherhood of Electrical Workers, a 2 percent cost-of-living raise for department employees had been scheduled to receive Oct. 1 was postponed. Now, employees are scheduled to go three years without raises, followed by a salary increase of up to four percent in 2016. The deal also sets aside 2 percent of the muni workers’ pay as a contribution toward active workers’ healthcare, lowers pension benefits for new employees and creates a panel that can seek to revise work rules that increase costs. Total savings from the deal are expected to be $456 million over the contract’s four-year span and an estimated $6 billion over 30 years, according to the city. Garcetti, a Democrat and former city councilmember, actively campaigned against wasteful government spending before being elected mayor in May. He had repeatedly criticized department salaries in particular. Employee salaries at the municipal utility have risen 15 percent since 2008, according to city records—the average department pay jumped from $88,299 in 2008 to $101,237 in 2012. Meanwhile, the median annual income for the average Los Angeles household fell during the same period, going from $48,882 to $46,148. In announcing the deal at an Aug. 22 news conference, Garcetti signaled that this was just the beginning of an effort to overhaul how the DWP operates. “Today the balance of power at the DWP shifts to the people,” Garcetti said. “This department will now be managed by its owners, the people of Los Angeles.” The IBEW and its political action committee reportedly spent about $4 million supporting Garcetti’s opponent in the May election, Democratic councilmember Wendy Gruel. But this week, the union struck a conciliatory note, with business manager Brian D’Arcy calling the labor deal a commitment “to create real savings” for ratepayers. “This is an important step toward enacting real solutions that save billions of dollars for the city and the ratepayers while ensuring the long-term health of the DWP and its health and pension plans,” D’Arcy said. The agreement still faces ratification by the Local 18 rank and file before it becomes official. A vote is planned for September, according to the union. The utility, owned by the City of Los Angeles and funded by ratepayers, has an annual operations budget of $3.1 billion. Labor costs amount to 24 percent of that budget, while fuel and power purchases make up 41 percent. Debt, interest and expenses for infrastructure development and facility maintenance make up another 23 percent. IBEW Local 18 represents over 8,000 employees working for five public sector employers, including about 92 percent of the LADWP’s employees. After months of back-and-forth negotiations, the Los Angeles Department of Water & Power settled on a new labor agreement with the union that represents over 90 percent of the muni’s employees. Recently elected Los Angeles Mayor Eric Garcetti called the

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