Mayor Eric Garcetti today announced the first significant accomplishment of his young administration, a new contract with the Department of Water and Power union. The deal, which was largely worked out before Garcetti took office in July, freezes utility workers' salaries for three years and establishes a less costly pension tier for new employees.
Garcetti had initially balked at the contract, arguing it did not go far enough to address the utility's "work rules." The mayor came around on Wednesday evening, after negotiators tweaked the proposal to allow for further talks on that issue.
"I was tough," Garcetti said at a press conference. "I drew a line and said I want to end the secret deals on work rules and perks."
About 90% of DWP workers are represented by IBEW Local 18, which led a campaign that spent $4 million trying to defeat Garcetti. The union's spending backfired, however, when it became the dominant issue in the mayor's race.
Conservatives in the San Fernando Valley, who have long complained that power rates are too high because utility workers are overpaid, rallied behind the liberal Garcetti largely because the IBEW was against him.
For IBEW Local 18, it was only the latest in a string of electoral defeats, which together have diminished the union's fearsome reputation. The new contract is the cheapest that utility workers have received in decades, an apparent reflection of their union's waning clout.
"There's no doubt the election helped me as a negotiator," said Miguel Santana, the city administrative officer, who represented the city during the bargaining. "There's a new context. The election brought home the reality that city residents want to see reform at the DWP. It made my job easier to see these issues surface."
Santana and Brian D'Arcy, the head of IBEW Local 18, had worked out the contours of the agreement by the time Garcetti took office. They agreed to the new pension tier and the three-year wage freeze, and they agreed to postpone for three years a 2% raise due under the existing contract.
Those terms would have been unthinkable until recently, says Fred Pickel, the utility's ratepayer advocate, who issued a report last year showing that DWP workers made substantially more than workers at other utilities.
"When we looked at this last year, we thought a fairly ambitious goal was a 10% reduction of labor costs," Pickel says. "I was told, 'Right, get real.' But this [contract], in terms of dollar value, roughly achieves that."
In a statement today, D'Arcy said he supported the agreement because it "ensur[es] the long-term health of the DWP and its health and pension plans."
When the proposal became public earlier this month, Garcetti said it did not go far enough. Following Pickel's advice, Garcetti turned his focus to the utility's work rules, which are laid out in an array of union side agreements, and which Pickel believes are needlessly inefficient.
"That's essential to making DWP more productive," Pickel says. "It isn't just about money, it's about getting the job done as well."
Grabbing the issue with both hands, Garcetti launched a public campaign on Monday to "Fix DWP!", in which he asked supporters to sign a petition to help him end the utility's "secret deals." The trouble is that no one seems to know what these secret deals are, including Garcetti, who sat in on closed-door meetings and had responsibility for DWP oversight during his 12 years on the council.
Because Garcetti doesn't know what the deals are, or which ones he wants to change, it was impossible to address them in this contract. Instead, the negotiators added language to allow for future consultation with the union on that issue.
That was enough for Garcetti to declare victory. A mere 48 hours after Garcetti launched his public campaign against the DWP, it was all over, as he and D'Arcy met at the Edendale Grill in Silver Lake to shake on it.
"Today the balance of power at the DWP shifts to the people," Garcetti said at the press conference. "The department will now be managed by its owners, the people of Los Angeles."