DWP’s Pay Among Best of Utilities

Los Angeles Department of Water and Power officials say they need to offer employees a union contract that could boost salaries by as much as 34% over five years to remain competitive with other utilities.

But the city’s utility already has a higher pay scale for key positions than three of the four other major utilities in the state. And agency officials admit they did not research how their salaries compared with other utilities before recommending the raises.

The proposed DWP contract is one of the first thorny political issues to confront Mayor Antonio Villaraigosa, who promised voters that he would cut city expenses but also received substantial financial and political support from the union that represents DWP workers.

Villaraigosa and his aides criticized the contract as too generous but blamed the proposal on Mayor James K. Hahn.

Last week, the DWP commissioners -- all holdovers from the Hahn administration -- balked at approving the contract and handed off the increasingly controversial deal to Villaraigosa, who will soon name his own DWP commissioners.

In an interview with The Times, Villaraigosa said the city cannot sustain large annual pay and benefit raises -- 30% for DWP workers over the last five years -- and still improve city services.

“Obviously, I want to do as much as I can for our employees,” the mayor said, “but we’ve got to live within our means, and that’s my concern right now.”

The five-year contract would increase salaries for 8,000 DWP workers represented by the International Brotherhood of Electrical Workers Local 18. Raises would be at least 3.25% a year, but are tied to inflation and could be as high as 6% a year.

But a look at the pay scales of the state’s five largest utilities shows that DWP employees are already doing better than their counterparts at most major utilities.

Linemen -- who a DWP official said are in short supply but in great demand -- start at an hourly rate of $34.74 in Los Angeles.

That’s higher than the pay at Pacific Gas & Electric in the Bay Area ($33.69), San Diego Gas & Electric ($33.42) and the Sacramento Municipal Utility District ($33.78). Only Southern California Edison pays more, at $36.19 per hour.

Henry Martinez, the DWP’s chief operating officer, said Edison’s higher pay is an issue because both utilities serve Southern California and compete for the same skilled workers.

Los Angeles also pays more for less-skilled workers, including painters and meter readers. For meter readers, Los Angeles pays a starting salary of $21 per hour, compared with $18.01 by the Sacramento district, $13.45 by Edison and $11.80 by San Diego.

Pay raises for DWP workers in the last two years have also exceeded those of employees at other utilities. DWP workers saw their pay increase by 5% in each of the last two years.

Southern California Edison employees, on the other hand, saw their pay increase 3.25% in 2003 and 3.5% last year. San Diego employees received a 3% increase in 2003 and 2004. PG & E employees received a 4% increase last year.

“The city of Los Angeles has a long record of ripping off the ratepayers by increasing wages at a rate much higher than inflation,” said Kris Vosburgh, executive director of the Howard Jarvis Taxpayers Assn.

DWP salaries were tied to the consumer price index for urban wage earners in Los Angeles during the last two years but also included a 5% minimum. So, while the CPI went up 4% for the 12 months ending June 2004 and 2.4% for the prior 12-month period, DWP wages rose 5% each year.

“The result is DWP workers are doing much better than their counterparts in the private sector,” Vosburgh said.

The DWP’s Martinez defended the proposed pay package.

“We are competing for talent with other utilities in Southern California and the West,” he said. “Ultimately, the intent is to retain a skilled and knowledgeable workforce.”

But Martinez and DWP spokeswoman Carol Tucker acknowledged that the department did not research whether DWP salaries lag those of other utilities. “We don’t really know what their salaries are,” Tucker said of the competing utilities.

With questions being raised about the contract, City Administrative Officer Bill Fujioka said he had hired a consultant to compare the salaries paid by different utilities.

Brian D’Arcy, an IBEW business manager, said tying salary increases to inflation was a reasonable way of protecting workers. “It’s not extravagant,” he said.

City Controller Laura Chick, who has battled with the DWP for years over excessive spending, said the department’s failure to compare salaries undermines its argument for the contract.

The DWP not only pays higher salaries than some utilities, it also pays more to workers in dozens of job categories than other Los Angeles departments, according to an internal city study that was released at the request of The Times.

A worker whose job category is Automotive Dispatcher II receives a top salary of $82,400 at the DWP, 61% more than a worker in the same position in other city departments. A DWP “building repairer” is paid $61,500, 39% more than a counterpart in other city agencies.

“We have one unit of the city obviously giving favorable treatment to its employees that is not enjoyed in other departments,” said Councilman Greig Smith. “That’s not right.”

The contract still requires the approval of both the Board of Water and Power Commissioners and the City Council. The members of the International Brotherhood of Electrical Workers Local 18 approved the contract in a vote two weeks ago.

D’Arcy said the city’s failure to ratify the contract could draw a legal challenge. “The offer was made, and it was accepted,” he said.

Villaraigosa said he was warned in a meeting in early July that there could be legal issues in trying to renegotiate a contract already negotiated by the previous administration.

“What I was told in July, when I was first briefed on this is, that it would be an unfair labor practice for us to return this, and obviously we can’t break the law,” Villaraigosa said.

But some labor law experts say that, since the contract is subject to DWP and City Council approval, either body can reject it and force the union back into negotiations.

“If the negotiators made it clear that this is subject to approval of the board, that would not be an unfair labor practice if the board voted no,” said George Preonas, an attorney who specializes in labor law.

Some city officials agree.

“Technically speaking, I can see no reason why anybody would say the process is over. It’s not,” said Councilman Tony Cardenas, who heads the council committee that oversees the DWP.

However, officials in the city attorney’s office said if the council were to reject the contract, the employees union would have the right to file a complaint. The city Employee Relations Board would decide whether the rejection constituted bad-faith bargaining.

Adding to the dilemma for the mayor, the IBEW was one of only a few unions to back Villaraigosa against Hahn, who had the support of the County Federation of Labor. The IBEW local put more than $300,000 into an independent campaign for Villaraigosa.

The mayor said he would not be influenced by who supported his candidacy.

Chick said the mayor and council were up against a culture at the DWP in which utility workers feel separate from the rest of the city workforce because the DWP is a semi-autonomous agency.

The city’s utility is not only financially self-sufficient, but it subsidizes the city with more than $178 million in surplus revenue each year. When city politicians complain about excessive spending, DWP officials remind them of the agency’s contribution.

“This tradition and culture has existed in the DWP forever,” Chick said. “I don’t think anybody has successfully dealt with it.”