Examining pay and perks at the DWP

A day after signing off on a new agreement that delays raises for Department of Water and Power employees and cuts compensation for new hires, Mayor Eric Garcetti again took aim at the utility workers’ pay and perks.

The mayor directed the DWP to conduct a study comparing its employee salaries and department work rules with those at other municipal and investor-owned utilities, to determine whether it is out of line and whether there are costs that could be cut.

A diligent DWP watchdog might ask: “Another study?” There have been, after all, at least three different analyses over the last seven years, and all have reached the same conclusion: DWP employees get paid more, sometimes a lot more, than workers at other utilities and those in similar city jobs. Why should ratepayers fund another high-priced consultant to study what we already know?

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Two reasons.

First, the study requested by the mayor goes beyond a salary comparison. He wants an analysis of labor rules and work practices enshrined in labor contracts. One such rule, for example, requires the utility, when it hires outside contractors, to offer overtime to any DWP employee who could have performed the same tasks. That’s the “outsourcing” bonus. The rules also prohibit layoffs or demotions if the utility wants to use private contractors for certain functions, such as customer call centers, that are typically outsourced in the industry. Addressing these rules could give management more flexibility to cut costs and help minimize future rate hikes. Likewise, comparing the DWP’s work practices to those at other utilities could show that it is over-staffing certain tasks or needs to invest in technology to boost productivity.

Second, there is new leadership in the city and at the DWP that might actually act on the study findings. Those previous reports were largely ignored because the mayors and City Councils didn’t want to pick a fight with the International Brotherhood of Electrical Workers Local 18, the politically powerful union representing most DWP employees. The Board of Water and Power Commissioners takes its marching orders from the mayor, so its members were unlikely to demand change. And, because wages and work rules are bound up in labor contracts, there was little that could be done outside of formal negotiations anyway.

Not anymore. Garcetti isn’t beholden to the IBEW, which supported his opponent in the mayor’s race. He’s installed a new commission with a mandate to find cost savings to keep rates down. Also, the new agreement with the IBEW allows the DWP to reopen the contract to negotiate labor rules without having to renegotiate wages and benefits. This time, another study might be worth it.