Mayor Eric Garcetti and City Council President Herb Wesson (foreground) announced a deal reached with the DWP union on a new labor contract.
Los Angeles Mayor Eric Garcetti claimed victory Thursday in his battle to squeeze more contract concessions from the powerful union that represents Department of Water and Power workers, the International Brotherhood of Electrical Workers, Local 18.
“Today, the balance of power at the DWP shifts to the people,” said Garcetti at a late morning news conference. The mayor credited voters, in part, saying his May election over union-backed candidate Wendy Greuel paved the way for a tentative deal.
“You delivered a clear mandate for reform in this city and the DWP," said the mayor. "You gave me the strongest possible bargaining position for this contract.”
Under the new contract deal, 8,200 DWP workers will give up a cost of living increase scheduled for October 1. They instead will receive the increase in three years. It’s been more than two decades since DWP workers have gone without an annual pay increase.
City officials estimate the deferred raise will save the city $385 million over the four-year contract and $3.9 billion in higher salary and pensions costs over 30 years.
More importantly for Garcetti, the union agreed to continue negotiating hundreds of work rules that govern DWP employees during the life of the contract – a concession that could save millions of dollars and make the agency more efficient. The mayor had said he would veto any contract that failed to include the provisions. By reaching an agreement, Garcetti avoided the possibility of the city council overriding his veto.
“Fixing the DWP will be a long term undertaking,” Garcetti said. “Now we have a pathway to comprehensive DWP reform.”
However, DWP workers still won't directly contribute to their health care costs. The mayor acknowledged the contract doesn't go far enough in this regard.
The deal does create a different pension tier for newly hired workers. City officials said the change would save $41 million over four years and $1.9 billion over 30 years.
Finally, the proposed agreement settles a lawsuit over how the DWP pension system accounts for employees who transfer from other city departments, saving an estimated $180-$210 million dollars.
The mayor said under the proposed deal, water and power rates would still likely rise in the next few years, but not as much. A spokesman for the DWP said ratepayers can still expect "double digit" rate increases to pay for infrastructure and a shift to more renewable energy sources.
City Council President Herb Wesson credited Garcetti for pushing the contract changes that include the ability to change work rules.
“I think we had a good deal a month ago,” Wesson said. “But we have a better deal today because of the hard line the mayor took.”
Rank-and-file IBEW members must ratify the agreement, a process likely to take several weeks.
The union's notoriously press-shy business manager, Brian D'Arcy, did not attend the press conference, but he issued a statement that said: "We entered these negotiations in good faith with a commitment to create real savings for taxpayers while protecting the interest of working people. This is an important step toward enacting real solutions that save billions of dollars for the city and the ratepayers while ensuring the long term health of the DWP and its health and pension plans.”
D'Arcy was spotted dining with Garcetti Wednesday night, apparently to seal the deal.