LA Watchdog – In a front page article in last Friday’s Los Angeles Times, Jack Dolan exposed the systematic abuse of the Dept. of Water and Power’s sick day policy. This is both good news and bad news.
The bad news is that ratepayers have been soaked for $35.5 million over the last three years to fund this abuse by a very small minority of DWP employees who took advantage of an overly generous sick leave policy that was not monitored correctly in certain departments.
The good news is this front page scoop exposes yet another fleecing of the ratepayers, forcing City Hall and DWP management to address this and other out-of-control personnel policies.
More importantly, this disclosure comes at a time when IBEW Union Bo$$ d’Arcy and City Council President Herb Wesson are trying to strongarm a very reluctant Mayor Garcetti into approving a two-year extension of its existing contract with DWP that expires in October 2014.
According to another Times story on Friday that was on the front page of the metro section, Michael Finnegan and David Zahniser wrote that the proposed “deal” would include the deferment of raises and cost-of-living allowances until 2016, reduced retirement benefits for new employees, and the requirement for new employees to contribute 3 percent of their salaries to their post-retirement medical benefits.
According to a memo written by City Administrative Officer Miguel Santana and DWP General Manager Ron Nichols, this “deal” would save ratepayers $6 billion over the next 30 years, an average of $200 million a year.
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A Little Bridge Talk, Boys
If you buy this $6 billion malarkey, the Wesson-led City Council will arrange for you to lease the Golden Gate Bridge for $1 a year for the next 50 years.
This “deal” also includes a settlement of the Romero v. City of Los Angeles litigation where the Trustees of the DWP pension plan allege that the city dumped $183 million of unfunded pension liabilities on DWP. The settlement of this litigation in favor of the city would stick ratepayers for at least $25 million a year for the next 15 years.
Rather than rush into another backroom deal where ratepayers get screwed, the City Council and Mayor Garcetti should authorize PA Consulting to do a comprehensive analysis of the IBEW’s contract with DWP. PA would report to the Ratepayers Advocate who, in turn, would keep the City Administrative Officer and the Chief Legislative Analyst informed.
Fortunately, PA Consulting is very familiar with DWP from past assignments, including the 2009 Industrial, Economic and Administrative Survey, its analysis of the Energy Cost Adjustment Factor in 2010, and the recent studies related to the water and power rate increases. This experience will result in significant savings.
PA Consulting would review and analyze the salary levels of DWP employees as well as their healthcare and pension benefits, and how they compare to other regional utility workers and comparable city employees.
How Much Would Be Saved?
PA Consulting would review and analyze the DWP’s restrictive work rules, including those related to overtime, staffing levels, and outsourcing non-core functions such as customer service and the construction of renewable energy projects.
PA Consulting would be charged with making money-saving recommendations.
For example, how much could DWP save by cutting back on its Cadillac healthcare plans and requiring all DWP employees to contribute 10 percent of the cost of the basic premium? Should DWP change its current sick day policy that has resulted in the significant abuses that were splashed across the front page of the Los Angeles Times?
How much could DWP save by requiring existing and new employees to contribute more to their pension plans and post-retirement medical benefits, especially given that the DWP pension plan is underfunded by $2.3 billion, representing a funded ratio of only 76 percent?
PA Consulting would also review, analyze, and critique the proposed “deal” with the IBEW and the $6 billion in savings over the next 30 years and determine whether this “deal” is in the best interests of the ratepayers, DWP and the city.
The Wesson-led City Council and the newly elected members of the City Council need to earn the trust and confidence of the ratepayers and the voters of Los Angeles. Rather than bowing to the demands of temperamental Union Bo$$ d’Arcy and rushing into this $6 billion, once in a lifetime “deal” that is then jammed down our throats by our forked tongued Elected Elite, DWP, the City Council, and the ratepayer-elected Mayor Garcetti need to conduct open, transparent labor negotiations with the IBEW.
If the City Council sticks it to the ratepayers, they will poison the well and the odds of passing the $250 million Street Repair Tax and the $100 million parcel tax to fund the Dept. of Recreation and Parks will be slim to none.
Mr. 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. He is the publisher of the Recycler Classifieds, www.recycler.com, and he may be contacted at lajack@gmail.com Hear him every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
