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L.A. council puts off DWP pay raise vote

December 9, 2009 | 12:02 pm
The Los Angeles City Council delayed a vote today on a five-year package of raises for employees of the Department of Water and Power, pushing that decision to Friday.

Much of this morning’s meeting has been consumed by the council’s efforts to regulate medical marijuana dispensaries.
                               
Mayor Antonio Villaraigosa has thrown his support behind the labor agreement, which provides a 3.25% increase this year, followed by four raises ranging from 2% to 4%, depending on inflation. Villaraigosa said he was happy that the first-year increase would be in the form of a cash payout -- ensuring that it won’t add to the base salary of DWP workers.

“That’s the gift that keeps on giving,” said Villaraigosa, whose appointees on the DWP board have already approved the increase.

Critics of the DWP have assailed the contract, which comes at a time when other city workers are seeing zero raises or, in some cases, pay cuts. But representatives of International Brotherhood of Electrical Workers Local 18, which represents more than 8,000 DWP employees, have defended the agreement, saying the first-year cash payment will not add to the utility’s retirement costs.

Over five years, a cash payment would help the DWP avoid $330 million in retirement costs, union leaders said. DWP officials provided a considerably smaller estimate, putting the pension savings at $180 million.

Pension costs have become a serious concern at the DWP, which experienced a 15% loss in its investment portfolio last year. In October, the city’s top budget official issued a report saying the major cost of the five-year contract would be future payments into the DWP’s retirement system.

The five-year contract could cause pension costs at the DWP to go up by more than 150%, the report said.

-- David Zahniser at L.A. City Hall

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