Mayor Eric Garcetti faces early test over proposed DWP deal

Less than a month into his term as Los Angeles mayor, Eric Garcetti faces a test of his power from a powerful union leader over a proposed labor contract.
(Luis Sinco / Los Angeles Times)

Less than a month after taking office, Los Angeles Mayor Eric Garcetti is facing a major test of his power: A union leader who ran a brutal campaign against him in the May election is trying to line up City Council support for a new salary agreement for Department of Water and Power workers.

The high-stakes political drama has been building for weeks in private conversations and closed-door meetings at City Hall. It has prompted Garcetti to risk an early and potentially ugly public fight with a powerful critic, DWP union leader Brian D’Arcy.

The proposed labor agreement also raises the possibility of a struggle between Garcetti and Council President Herb Wesson, who has been pushing for a quick deal with the DWP union, Local 18 of the International Brotherhood of Electrical Workers.


The ultimate terms of the contract will affect future rates that Los Angeles businesses and nearly 4 million residents pay for water and power.

On Thursday evening, Garcetti spokesman Yusef Robb declined to confirm the deal’s terms, but denounced it. “It’s not good enough. Period,” he said. “Mayor Garcetti was elected with a clear mandate to bring real reform to the DWP, and that includes pensions, healthcare and salaries.”

Under the deal, outlined in a memo obtained by The Times, more than 8,200 DWP employees would forgo a scheduled raise of 2% to 4% that is supposed to take effect Oct. 1. They would also get no raises the following two years. In 2016, they would get a pay hike of up to 4%.

The proposed agreement also includes reduced retirement benefits for newly hired employees. They would be required to contribute 3% of their salary toward health coverage after they retire — up from zero for current employees. Talks on the deal began months ago, when Mayor Antonio Villaraigosa was still in office. The memo, written by City Administrative Officer Miguel Santana and DWP General Manager Ron Nichols, says the deal would save the public $6 billion over 30 years. Wesson and D’Arcy both declined to comment Thursday.

The deal includes a settlement of a 2010 lawsuit filed against the city by union representatives on the DWP’s pension board. The suit alleges that the city improperly forced the utility to absorb at least $183 million in retirement costs when it shifted hundreds of workers onto the DWP payroll to help balance the general government budget that pays for police and other basic services.

On Tuesday, Garcetti, Wesson and the rest of the city’s labor negotiating committee held a private meeting at City Hall on both the lawsuit and the proposed DWP contract. Immediately afterward, union leader D’Arcy and Santana attended a closed-door, courthouse settlement conference on the lawsuit with a judge.


Garcetti’s spokesman said late Thursday that the city should continue fighting the case. “The lawsuit is without merit and is not a factor in the mayor’s decision-making,” Robb said.

In his campaign, Garcetti vowed to stand up for ratepayers and be an independent check on the DWP union. The labor group and its affiliates spent $2 million portraying Garcetti as “living large” at taxpayer expense, and promoting his opponent, Wendy Greuel. A central thrust of Garcetti’s campaign was that his rival would reward the DWP union by burdening ratepayers with rich labor contracts.

The union’s current contract expires in the fall of 2014. On Friday, Garcetti, Wesson and the three other members on the city’s Executive Employee Relations Committee are scheduled to meet privately to discuss the new contract proposal.

In remarks to reporters Wednesday, Garcetti stressed pay and benefit costs for the city workforce must be controlled.

“While we’ve backed away from the cliff, the cliff isn’t out of sight,” he said. “And it’s going to be very important to me that we hold down those raises, pensions and healthcare costs that in the past have driven expenses in this city. I said that during the campaign. I will continue to do that at the negotiating table as mayor.”

A close ally of the DWP union, who declined to be identified by name because of the sensitivity of the labor talks, said the proposal on the table serves the city’s interests. “It’s the best deal they’ve cut with any union so far,” he said. “This is a good deal for the city.”


Times staff writers Kate Linthicum and Maloy Moore contributed to this report.