It’s Up to DWP Unions

The Los Angeles City Council had little choice but to allow the downsizing of the bloated Department of Water and Power staff in the face of the rough-and-tumble free market of electricity deregulation. The question has been how. The choice was to encourage voluntary departures with severance packages--buyouts--which is certainly preferable to layoffs. The council has made a hard but necessary decision.

Concurring with DWP management, the council has given the green light to a $346-million severance program designed to entice as many as 2,000 DWP union employees to take early retirement or leave the utility voluntarily. If enough employees take the offer, the DWP will not have to order the largest municipal layoff in Los Angeles history.

The question now is whether all three unions concerned will accept the package, which includes two-year contract extensions and a cost-of-living adjustment for workers who agree to the terms. Members of the Engineers and Architects Assn., among those targeted in the downsizing, are seeking further refinements in the buyout and severance package. The DWP, meanwhile, is poised to send out layoff notices next week. What’s important is to give employees a choice.

The DWP/City Council package offers something for nearly all levels of employees. There are enhanced retirement benefits for older workers, and severance payments of $25,000 to $50,000 for others who have not been with the department that long. The department’s 8,600 workers stand between a rock and a hard place. The utility’s general manager, S. David Freeman, was brought into the crisis last year with orders to shake out the department to meet the rigors of deregulation, and Freeman is doing what is necessary.

Reducing the work force will help the DWP pay down a $4-billion debt on an extraordinarily costly power plant in Utah. Reducing debt is the key to the competitive positioning of the nation’s largest municipal utility in a deregulated market, in which other power providers will sell electricity to businesses and consumers.

The unions appear to be in a squeeze and would best represent their members by accepting the package. They could--and should--withdraw pending litigation, which only promises to drive costs higher. The engineers and architects association went to court to seek an order to block the layoffs. The judge who is evaluating the request said last month that the union essentially was asking him to void the state deregulation order.

The DWP can either vainly seek to hold onto its past days as a regulated monopoly or embrace the sometimes scary but potentially better future. That’s what the rest of working Americans have had to do. It’s time for the DWP to join them.