L.A. City Council approves raises of up to 22% for about 9,000 DWP workers

In a big victory for labor, the Los Angeles City Council on Wednesday approved a contract giving six raises in five years to members of the Department of Water and Power’s biggest union.

The vote came despite objections from some council members over what they considered a rushed process that didn’t give them time to scrutinize the deal.

It also is expected to open the door for other labor groups at City Hall to demand generous salary packages at a time when the city is struggling with tight budgets and financial woes.

Although Mayor Eric Garcetti and other city leaders say the DWP contract will result in better utility services, others fear it will leave the city on the hook for more employee raises as other unions negotiate contracts.

“This puts us in a weak position moving forward,” said Councilman Mitch O’Farrell, who voted against the deal. “I would use this as a starting point for my own union.”

In an 11-3 vote, the council backed raises for about 9,000 members of the International Brotherhood of Electrical Workers Local 18. Workers will see raises of at least 13.2% and as much as 22.3% by October 2021, depending on inflation.

City Hall negotiated the raises behind closed doors, and lawmakers skipped the traditional committee meeting that gives the public the opportunity to voice support or opposition for a proposal before the final vote.

The city’s fast-track process was criticized at Wednesday’s hearing, and three lawmakers who voted against the contract said they wanted more public outreach and more time to learn about the proposal. In addition to O’Farrell, council members Mike Bonin and David Ryu refused to support the agreement.

Ryu called the contract “reasonable” but said the process moved so quickly that City Hall had not finished analyzing its fiscal impacts.

Several council members said they learned about the proposed contract from media reports.

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“I don’t like to make a decision with a gun at my head,” O’Farrell said in an interview after the vote. “I’m just not going to do that. I think we have to stand up sometimes, and say, ‘hold on.’ Let’s get more answers before we make a decision.”

The new contract comes after a three-year period in which union members received no raises, followed by a single 2% increase that went into effect last fall.

Utility officials have said the raises were necessary because employees were leaving to join better-paying companies.

Over the last two years, the DWP has invested $12.5 million in training and salary costs for apprentice lineman, only to see those workers lured away by signing bonuses and more lucrative overtime pay, officials said.

Supporters of the contract say the agreement will end the city’s nearly $4-million annual contribution to two controversial nonprofits affiliated with the union. The organizations provided six-figure salaries for utility managers and union leaders but never demonstrated much impact on employee training and safety, their two stated goals.

The new contract will also require every union member to undergo yearly performance reviews.

City Councilman Paul Koretz called the deal “a reasonable compromise” during Wednesday’s hearing. He pointed to the last DWP contract, which offered no raises for three years.

“To give cost of living increases around 2% is not particularly shocking and is a fair thing to do,” Koretz said.

No public speakers showed up to support or oppose the proposed raises at Wednesday’s meeting.

Council members who questioned the agreement said their offices received calls from constituents in the last week.

City Councilman Gil Cedillo said the union had made concessions, including agreeing to end the contributions to the controversial nonprofits.

“If we have a deal today, and it’s good, then it’s not going to get any better,” Cedillo said. “Let’s sign the deal.”

Interim city Administrative Officer Rich Llewellyn, who helped negotiate the deal, told the council that he and the other negotiators fought for each point of the agreement.

“We pushed on every one and they pushed back on every one,” Llewellyn said. “We ended up in the middle in what I think is a reasonable deal.”

In a statement, city Controller Ron Galperin supported the city’s decision to end contributions to the nonprofits and to provide better incentives to retain certain workers “who are expensive to train and frequently lured away by private utilities.”

“At the same time, I’m not convinced that all of the across-the-board increases were justified by the need to attract and retain employees,” Galperin said. “We must be watchful stewards of ratepayer money.”

A representative for IBEW Local 18 did not return a request seeking comment Wednesday.

Garcetti campaigned for office on a promise to rein in costs and improve customer service at the city utility. In 2013, he blocked a proposed DWP contract to demand that community activists and others have time to review it and offer comment.

This time around, Garcetti’s appointees on the Department of Water and Power board backed the contract while he was on vacation.

The annual savings from disbanding the nonprofits is more than offset by the estimated $56 million in raises and other perks union members will receive each year under the contract, critics counter.

Fewer than 100 DWP employees have stopped working for the city in each of the last four years, city records show. That’s a fraction of the more than 9,000 full-time workers at the nation’s largest publicly owned utility, who on top of their salaries and pensions make no contribution to their employee health insurance premiums.

In addition to those who left the DWP, 500 more employees retired last year. City officials said some of them took their pensions and went to work for other employers, but could not say how many.

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The average total annual compensation for a DWP worker for the year ending September 2015 was $136,100, according to a recent report commissioned by the utility’s Office of Public Accountability.

That figure includes a $99,500 salary, $14,500 in retirement contributions and $22,100 in medical and other benefits.

The DWP spent an additional $300 million to $360 million in 2015 on other retirement costs, reflecting adjustments to pension assumptions and amortization of underfunded liabilities, according to ratepayer advocate Fred Pickel.

Including that spending, the retirement cost per employee is much higher.

The salary figure doesn’t include overtime. The report found that the utility paid out $157.3 million in overtime during the same period and that the DWP appears “to have a higher percentage of its employees receiving overtime” than other publicly owned utilities.

Overall, the report found that those on the lower end of the pay scale at the utility make more than employees with similar jobs at other utilities. However, workers with higher salaries at the DWP are less well compensated than their counterparts elsewhere.

Garcetti’s office didn’t issue a statement after Wednesday’s vote.

Times staff writer Jack Dolan contributed to this report.

dakota.smith@latimes.com

Twitter: @dakotacdsmith

laura.nelson@latimes.com

Twitter: @laura_nelson

UPDATES:

7:15 p.m.: This article was updated with information from a ratepayer advocate.

3:20 p.m.: This article was updated with more details.

1:45 p.m. This article was updated with the City Council’s 11-3 vote to support the DWP contract. A statement from City Controller Ron Galperin also was added.

12:25 a.m. This article was updated with reaction from Councilman David Ryu and additional information on the proposed DWP contract.

This article was originally published at 7:25 a.m.