A coalition of Los Angeles employee unions is challenging key provisions of a labor agreement struck by political leaders and employees at the city's giant water and power utility, potentially jeopardizing hundreds of millions of dollars in savings for ratepayers over the next four years.
Three months ago, Los Angeles Mayor Eric Garcetti heralded the completion of a deal with the Department of Water and Power union that would produce new savings by paring back retirement costs and avoiding employee raises for three years. But employee groups from other city departments are now signaling that they may sue over the deal, saying that it would hurt their ability to shift to DWP jobs in future years.
The dispute centers on actions by the mayor and City Council that would impose new financial burdens on employees who want to transfer to the DWP. Hundreds of city workers moved to the utility during the recent financial crisis, frequently securing better pay and benefits while escaping the threat of layoffs.
The transfers drew protests from the DWP's biggest union, whose pension fund had to pick up nearly $200 million in increased retirement costs for the new arrivals. The new four-year contract with DWP workers is dependent on an accompanying agreement to relieve the utility of much of the added pension expense from employee transfers, said City Administrative Officer Miguel Santana, a top budget official.
Pulling out the changes on employee transfers would jeopardize the entire DWP labor deal, which is supposed to produce $1 billion in retirement savings over 30 years, Santana said.
"If one piece of this doesn't move forward, the whole thing collapses," he said.
The next step is expected next week, when the council is scheduled to cast a final vote on the four-year DWP employee contract. The council also would adopt, as part of the deal, the new restrictions on employee transfers to settle an earlier lawsuit filed by representatives of the utility's union.
City employees moving to the DWP could, for the first time, have to make up much of the difference in retirement plan costs, Santana said. Or they could opt to have two pensions — one carried over from the city and a second continuing at the utility, he added.
The proposed changes have provoked an outcry from many non-DWP city unions. Lawyers for the Coalition of L.A. City Unions argue that the net effect will be lower retirement benefits for their workers. They filed an unfair labor practices complaint last month with the city's Employee Relations Board saying that officials failed to formally confer with them on the changes as required.
The lawyers also sent a six-page letter to Santana arguing that the changes violated the group's contract and the city's employee relations ordinance.
"We're going to pursue all remedies," coalition Chairwoman Cheryl Parisi said.
The dispute underscores, once again, the higher wages and retirement benefits offered at the city's $4-billion-a-year utility, a disparity that figured in Garcetti's mayoral campaign victory over City Controller Wendy Greuel earlier this year.
Garcetti said through a spokesman that formal negotiations on the transfer restrictions were not required. That puts him in the unusual position of agreeing with a powerful political foe — Brian D'Arcy, head of the DWP's International Brotherhood of Electrical Workers, Local 18. D'Arcy maintains that a recent court ruling has already settled the matter, and that workers in other city departments don't have a right to pension benefits historically offered by the DWP.
The migration of city employees to the DWP has provided relief to officials trying to maintain general government services, such as police, Fire Department ambulances and parks. The transfers reduced the size of the city workforce and City Hall's pension burden. Each time a worker moved to the DWP, the utility paid employer pension contributions to cover the transferee's entire career, Santana said.
"If someone works for the city for 12 years and then goes to the DWP and works an additional 15 years, the DWP has to [cover the cost of] the first 12 years. That's really what the issue is," he said.
That process also works in the reverse, but DWP workers have been far less likely to leave the pay and benefits of the utility. About 1,600 employees moved to the DWP from other city departments between 2004 and 2010, more than six times the number of employees who left the utility for other city agencies, according to city budget officials.
Parisi noted that some of her group's members have been hoping to move to the DWP from the convention center, which is scaling back its city workforce.
"This measure robs them of the opportunity for a career pension" at the DWP, she said.
Parisi also said existing city employees who move to the DWP in the future should get the more lucrative pensions available now. Under the pending DWP labor agreement, pension benefits would be reduced for all utility employees hired starting Jan 1.
david.zahniser@latimes.com
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