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After DWP union objects, City Council drops proposal to gain authority over the utility's pension plan

October 26, 2010 | 12:44 pm

Members of the Los Angeles City Council scuttled a plan to seek power over the Los Angeles Department of Water and Power’s retirement benefits Tuesday after hundreds of the utility’s workers showed up to denounce the move.

Councilman Bernard C. Parks had called for a March 8 ballot measure that would ask voters to give the council more authority over the DWP’s retirement system, which operates independently from the rest of the city.

Councilman Paul Koretz panned that idea, saying he did not want to engage in a costly election-year fight with the powerful International Brotherhood of Electrical Workers Local 18, which represents DWP employees and had hundreds of members in the audience.

“This is as pointless a thing as I’ve seen on an agenda,” said Koretz, who was elected in 2009 after the union -- and one of its fellow locals -- spent nearly $40,000 on his behalf.

Brian D’Arcy, the head of the DWP employee union, said Parks’ proposal never should have reached the council agenda, saying it circumvented the public notice provision of the state’s open meetings law and was the result of a “dysfunctional” process.

"They're not moving our pension under council control," he said. "They did a pretty remarkable job of screwing the other two up."

The costs of the city's other two retirement systems -- one for public-safety employees and the other for non-DWP civilian workers -- are rising so quickly they could consume nearly one-third of the city's general fund budget by 2015 unless major changes are made. Worried about those costs, the council voted minutes later to draft a ballot measure that, if approved, would pare back retirement benefits for newly hired police officers and firefighters.

Parks withdrew his proposal for the DWP after his colleagues denounced the plan. But he said his proposal was designed to give the council the ability to reduce the size of benefits for newly hired DWP workers -- not manage the pension system’s day-to-day affairs.

Parks said the DWP's pension has its own woes, having suffered double-digit losses in the wake of the recession. He also said that the utility is giving benefits that are more generous than those provided to other civilian employees. “This pension system is in no better shape than the other two, and if we take no further action, it will be unsustainable,” he said.

Under the retirement formula provided by pension officials, a DWP employee who retires after 30 years with a salary of $100,000 will receive a $69,000 annual pension.

The council and the DWP’s pension board have been at odds in recent weeks over the 1,600 civilian employees who have transferred to the utility from other city departments. Many of those transfers were authorized by Mayor Antonio Villaraigosa and the City Council as part of an attempt to keep city workers from losing their jobs in departments hit hard by the budget crisis.

DWP officials have been complaining about the cost of those transfers. And they moved to suspend full retirement benefits for any new worker who comes to the utility from another city agency.

The council vetoed that measure two weeks ago, over the protests of Javier Romero, a member of the DWP’s retirement board.

Romero testified Tuesday against Parks’ proposal, drawing cheers from hundreds of his fellow workers. “This time I brought a few of my brothers and sisters,” he told the council, “so that they can see who is undermining their best interests.”

-- David Zahniser at Los Angeles City Hall

Photo: DWP employee Eric Bishop holds a sign outside City Hall, where hundreds of Los Angeles Department of Water and Power employees gathered to protest a proposed ballot measure that would give the city's elected officials oversight of the utility's pension system. Credit: Bob Chamberlin / Los Angeles Times