DWP ‘contract envy’ may be costly
Four years ago, Los Angeles’ elected officials wrested major financial concessions from the Department of Water and Power’s biggest and most powerful employee union, persuading those workers to go three years without raises.
City budget officials billed the agreement as a road map for negotiations with other employee groups. Soon afterward, several other unions agreed to postpone pay increases for one or more years.
Now a new salary package, backed by Mayor Eric Garcetti and heading to the City Council next week, would give six raises in five years to thousands of DWP workers. That could spur other unions to seek a similar deal, placing new burdens on a city budget already under significant
stress.
“Every time you give a pay raise to Water and Power employees, you know you’re going to get a knock on your door from the city employees, saying, ‘Us too,’ ” said Zev Yaroslavsky, director of the Los Angeles Initiative at the UCLA Luskin School of Public Affairs, who has served on the City Council and the county Board of Supervisors.
For city officials, “it’s going to be harder to negotiate because of this,” said Jaime Regalado, professor emeritus of political science at Cal State L.A.
Garcetti’s appointees at the DWP voted Tuesday for a five-year agreement that would provide raises of at least 13.2% and as much as 22.3% by October 2021, depending on inflation.
The pact would also boost the base pay of hundreds of electrical distribution mechanics, also known as linemen, by 4% over two years.
Some argue the package of raises is too generous at a utility that has been raising rates, while others say the increases are deserved for a workforce that went years without pay hikes.
Mayoral aides say the agreement with International Brotherhood of Electrical Workers Local 18 confronts a problem that is distinct from other city operations: DWP workers are taking jobs at other utilities that have provided hiring bonuses, higher overtime pay and other financial incentives.
“The IBEW contract is not a template for any future negotiations with city employees,” said Matt Szabo, Garcetti’s deputy chief of staff. “We are prepared to engage in fair, responsible negotiations with employees based on the fiscal realities of our budget, and in the best interests of L.A. taxpayers.”
In his latest budget, Garcetti closed a $263-million shortfall for the fiscal year that begins July 1. The city’s general fund budget, which pays for police patrols, firefighters and other basic services, is also expected to face costly new obligations, particularly from pensions and healthcare for retired public employees.
Bob Schoonover, president of Service Employees International Union Local 721, said it’s too soon to say what his organization will ask for at the bargaining table. But he acknowledged that he looks at what other municipal unions have negotiated.
“That’s part of the process,” said Schoonover, whose union represents tree trimmers, sanitation workers and others.
In 2007, the city’s elected officials approved a five-year package of raises totaling nearly 25% with the SEIU and other groups in the Coalition of L.A. City Unions. At the time, city leaders said the raises would help address complaints from city workers that the DWP had received significant increases while others went without.
That deal quickly became a millstone, as the city found itself without the funds to navigate a global economic downturn. The city turned to layoffs, furloughs and early retirement for thousands of employees to cope with the crisis.
Civilian city employees have long harbored resentment that they make less than their counterparts at DWP, said Jack Humphreville, who serves on the Neighborhood Council Budget Advocates, which gives input to city leaders on the budget.
Humphreville predicted that the coalition, which represents several union organizations, will use the DWP agreement as an argument for higher salaries and why “they shouldn’t chip in for their healthcare.”
“They’ve all had contract envy … so it’s going to be an absolute donnybrook,” he added.
City officials say the retention problem at DWP is particularly severe among the workers who repair power poles and transmission lines.
Negotiations are set to start later this year with the coalition and the Los Angeles Police Protective League, which represents rank-andfile officers, according to city budget analysts. Craig Lally, the union’s president, raised issues about recruitment and retention that are similar to those being discussed at the DWP.
Southern California law enforcement agencies are luring away LAPD officers with higher salaries, Lally said.
“We must be competitive with other law enforcement agencies to ensure we are able to recruit and retain police officers to try and keep our neighborhoods safe,” he said.
Garcetti campaigned four years ago as someone who would stand up for ratepayers — an effort to create a contrast with his opponent, who received huge financial support from the DWP union.
This time, the mayor and other city elected officials have relatively little to fear politically from pursuing a package of DWP raises. Garcetti was reelected overwhelmingly to a second and final term in March — and very likely won’t run for another office at City Hall. If he serves his full term, he will leave office in 2022.
Five council members set to vote on the contract won’t be up for reelection for three years. Six others won’t face voters until 2022.
“Voters have short memories,” said Steve Erie, professor emeritus of political science at UC San Diego. “Several years out is an eternity.”
Four years ago, Garcetti initially blocked approval of a four-year contract with IBEW Local 18, saying he wanted additional concessions. In the intervening weeks, Garcetti took input on it from neighborhood council leaders.
This time around, the agreement is on a much faster track. The DWP posted the salary agreement on its website Monday evening. Council President Herb Wesson is planning a full council vote June 28.