The Los Angeles City Council today instructed city staff to put the finishing touches on a new agreement reached this week between the city and the union representing 92 percent of workers at the Department of Water and Power.
The new labor pact would save the utility $6.1 billion over three decades and help control rates for DWP's electricity and water customers, according to projections by utility and city officials. DWP officials are contemplating rate increases for the next three years. The agreement would reduce those increases by about 2 percent, they say.
The agreement with the International Brotherhood of Electrical Workers, a union that represents 8,200 DWP workers, also includes a settlement of a lawsuit between the city and members of the DWP pension system.
The council voted 14-0 to tell their chief labor negotiator and the city attorney to finalize the settlement agreement, the labor contract and the adjusted pension tier. The resulting documents will come back to the council and the Board of Water and Power Commissioners for another vote.
Once finalized, the deal still needs to be ratified by members of IBEW. If union members accept the deal, the DWP board, City Council and mayor must also sign off on it for it to go forward.
Under the agreement, a 2 percent cost-of-living raise scheduled for Oct. 1 would be postponed until 2016, which officials project would save the city $385 million over four years and $3.9 billion over 30 years. Some of those savings would be put toward paying employee healthcare premium costs, 100 percent of which are picked up by DWP.
Changes to the pension tier for new employees are projected to save the DWP $41 million over the next four years and $1.87 billion over the next 30 years. Settlement talks in a lawsuit over payment of pension costs allowed the city to broach the issue of DWP worker pension terms with IBEW.
The contract allows the City Council and mayor to weigh in on future changes to the pension tier, which are set by the Board of Water and Power that oversees the utility.
Starting salaries would also be reduced for 34 jobs, a move that, according to city officials, would save $15 million over four years and $196 million over 30 years.
With pay for DWP jobs typically higher than that of other city jobs, city leaders have for the last 18 months sought a way to close the salary disparity. That disparity has made it difficult for city departments to retain employees eager to transfer to the DWP's better-paid workforce, officials said.
Unlike DWP workers, city workers already have agreed to furloughs and a delay of cost-of-living raises, while the police union has agreed to a 20 percent reduction to starting salaries for new employees.
The DWP is a city-owned utility but is funded through the rates paid by its electricity and water customers. Personnel costs make up more than 20 percent of the DWP's budget.