Garcetti to DWP Ratepayers: “Nyuk, Nyuk, Nyuk”

PERSPECTIVE-Much has been written and discussed about the recently approved contract with DWP’s IBEW Local 18 members...but not enough. 


I will not revisit the points already covered by Citywatch’s Jack Humphreville and the LA Times’ Steve Lopez – mainly, the unconscionable disregard by our elected officials for their constituents and neighborhood councils across the city, all of whom should have had a voice in the negotiations. 

Consider this the epilogue. 

Where was our Ratepayer Advocate? Did anyone hear from him? 

In all fairness, Fred Pickel was left in the dark throughout the process. Basically, he knew what we knew, and at about the same time. 

But as a ratepayer advocate, he needed to step up and at least rally the neighborhood councils, to inspire an outcry against this blatant insider process which denied their participation. Perhaps nothing would have changed, but allowing the mayor and City Council to conduct such critical business in the absence of public input – unchallenged – is not the stuff of advocacy. Pickel could have at least picked up the phone and called Steve Lopez. 

The NCs are also partly responsible for the current state of affairs. If ever an issue should have called for drawing a line in the sand, it was this one. The NCs have quietly and steadily acquiesced to City Hall over the years. Oh, how things have changed since they backed the effort which defeated Measure B! 

The IBEW did not agree to any substantive concessions. The members were well compensated before the deal; they are now more so. Still no contributions towards healthcare, either. The argument about staying competitive with other utilities is as big a sham as Pickel’s approach to advocacy. There is not going to be a mass exodus of trained DWP employees for greener pastures. If anything, some turnover would be desirable to maintain a better balance of age demographics. It would facilitate an orderly and more gradual replacement of retirees over the long-run. 

City Controller Ron Galperin recognized the need to adequately compensate those workers who require special training and are susceptible to competing offers, but as he told the Times: “At the same time, I’m not convinced that all of the across-the-board increases were justified by the need to attract and retain employees.” 

He is correct. 

Then there’s the matter of the two Joint Trusts, those grossly mismanaged entities which were used to fund conferences in Hawaii and Las Vegas, along with five-star dining, for union bosses and their minions; to pay inflated salaries to staff who could not balance the books and to promote safety programs, although DWP maintained a robust budget to do the same. Funded by an annual contribution of $4M from ratepayers, it was quite a perk for D’Arcy and company. 

The good news is the trusts will be dissolved; unfortunately, not right away. The first step will be to consolidate the two, which was one of the necessary reforms requested in the wake of Ron Galperin’s revealing audit – and should have been accomplished already! 

The audit exposed the negligence of the day-to-day management and the shameful indifference to it by the trusts’ board members, half of whom were appointed by the city. It also pointed out the inefficiency of maintaining two separate trusts when they could easily have been managed as one.

But here’s the kicker – there may be as much as $15M in cash remaining with the trusts. The latest available IRS 990 filings are through June 2015 and reported $12.5M on deposit. Given past spending patterns, $15M is a reasonable estimate for today’s balance. The surviving trust will draw it down to zero. And given those same patterns, don’t expect the money to be spent wisely. 

For that matter, what happened to the progress reports for the reforms? The last one I saw posted on the DWP website was from over a year ago. It was written by former GM Marcie Edwards. The details were scant. She appeared to have approached it with the enthusiasm of a fifth-grader writing a punish assignment. From her perspective, maybe it was. After all, she openly endorsed D’Arcy’s criticism of the audit. Regardless, given the trusts’ track record, the progress report by itself, without a new audit, meant little…and no one downtown was clamoring for Galperin to do a follow-up, much less fund one. I am certain he would have welcomed the opportunity. 

Considering how generous Garcetti was by agreeing to allow union members free healthcare, you would think he could have sweet-talked D’Arcy into returning the remaining cash. It would have been a one-off item with no effect on the other provisions of the contract. 

Now $15M is not large relative to the overall cost of the deal, but in a city where residents are paying more to expand mass transit and construct homeless housing; where the backlog of street repairs extends for decades; and where the LAPD lacks the resources to combat growing property crime, leaving cash on the table sends a disrespectful message to the residents. 

It amounts to a poke in the eyes to all of us. 

And not just a one-finger poke. No, I’m talking about the two-fingered jab used by Moe on his follow Stooges. 

To the mayor and most of the City Council members, we are Larry, Curly and Shemp.


(Paul Hatfield is a CPA and serves as President of the Valley Village Homeowners Association. He blogs at Village to Village and contributes to CityWatch. The views presented are those of Mr. Hatfield and his alone and do not represent the opinions of Valley Village Homeowners Association or CityWatch. He can be reached at: