Chick questions DWP pension deal with official

The board of the Los Angeles Department of Water and Power voted this week to give its No. 2 official an extra $152,000 toward his pension, as part of the deal that brought him back to the agency last year.

On Wednesday, City Controller Laura Chick called the agreement with Chief Operating Officer Raman Raj “unprecedented” and said she would not cut a check until the City Council takes up the matter and hears why it is necessary.

Raj receives an annual salary of $247,000.

“There should be a discussion about why this offer was made, why it wasn’t carefully researched at the time, why it was necessary,” Chick said. “I think it just needs a full airing.”

DWP General Manager H. David Nahai offered the pension boost to Raj when he hired him last year, according to city documents.

Nahai defended the deal, saying that DWP salaries and benefits should be compared with other utilities.

“If we’re going to attract the best and the brightest from the private sector to a department such as the DWP, an agreement to restore retirement benefits for a key employee does not seem to me to be out of whack,” said Nahai, who runs the nation’s largest municipal utility.

Raj worked at the DWP from 1999 to 2001, after spending 3 1/2 years at the Metropolitan Transportation Authority. He was working as a private consultant when Nahai sought his return.

Retired public employees’ pensions are calculated according to the number of years of employment. Returning city employees typically have to pay out of their own pockets to restore time lost toward their pensions.

Raj asked the DWP to “buy back” time spent at the MTA and DWP, applying those years of government service to his total pension. The DWP’s payment also covers state and federal taxes that would be incurred by Raj from the pension boost.

The DWP vote comes as ratepayers are experiencing a series of increases in their water and electrical bills that will amount to nearly 25% more over the next four years.

The DWP board took its vote Tuesday, hours after council members complained that the utility had not done enough to disclose potential conflicts of interest from Raj’s past consulting work.

Raj represented at least four DWP contractors before he was hired by Nahai. Since his hiring, the DWP has recommended that five contracts be awarded or extended to former Raj clients.

Nahai has made at least one other controversial employment decision this year, hiring former Assemblywoman Cindy Montanez to handle governmental affairs for the utility. Nahai took steps to ensure that Montanez, who earns $12,500 a month as a DWP consultant, also kept her $130,000-per-year post on the state Unemployment Insurance Appeals Board.

The DWP originally sent an invoice to Chick’s office on Raj’s behalf July 10, seeking $76,692 to cover his three years with the DWP. Chick said she refused to pay until there was a board vote.

DWP board President Nick Patsaouras, who voted for Raj’s package, said he had no idea that Chick was raising questions before the vote. Nahai said he too was unaware that Chick was refusing to cover Raj’s pension invoice.

Although the state’s open meeting law allows government agencies to discuss personnel negotiations behind closed doors, Chick said she believed that the extra money offered to Raj merited an open debate.

“If my role ends up forcing this into a public discussion, then I’m very comfortable playing that role,” she said.

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david.zahniser@latimes.com