Union, DWP Near Accord on Severance

After months of long and difficult bargaining, a tentative agreement was reached Tuesday night on a package of severance pay and enhanced retirement benefits designed to eliminate the need to lay off 635 union workers at the Los Angeles Department of Water and Power.

“We have reached a mutual understanding,” DWP General Manager S. David Freeman said after negotiators for the utility and its lone holdout union, the Engineers and Architects Assn., emerged from the latest in a series of tough bargaining sessions.

Neither DWP nor union representatives would discuss details of the agreement, which includes cash payments for younger workers and greater pension benefits for older employees who leave the utility voluntarily rather than being laid off.

Freeman said he will take the package to a special City Council committee that reviews labor agreements and to the full council for final approval later this week. “I hope we will be able to sell it,” he said. “It is not a done deal until we sell it to the committee, the mayor and council members.”

The package also must be ratified by the membership of the engineers and architects group. The union has fought long and hard against layoffs that targeted 635 of its members as the DWP downsizes in advance of the coming competition in the electric power business in California.

“They reached an agreement on a package which meets the needs of the department, the workers as well as the customers,” said union spokesman Mark Siegel.

After two courts this month upheld the city’s right to lay off workers and denied the union’s request for a preliminary injunction to block the terminations, the engineers and architects group was under mounting pressure to accept a buyout and severance package.

The DWP’s most powerful union, the International Brotherhood of Electrical Workers, and the group that represents its managers had already agreed to accept cash severance payments of $25,000 to $50,000 for younger workers and up to five years additional credit toward retirement for older workers who agree to leave the DWP rather than being laid off.

Since October, Freeman has insisted that the utility has no choice but to eliminate about 2,000 jobs as part of a plan to pay off $4 billion in debt on its power plants. Without dramatically lowering its cost of operation, he believes the city’s public power system will be unable to compete in a free market for electricity.

Freeman made no secret that he targeted the engineers’ group for major cuts. In demonstrations before the council, in court and in contentious bargaining sessions that would periodically break down only to start again, the engineers and architects union demanded more than what was given the other two unions.

The City Council, unwilling to approve the largest layoffs in the city government’s history, previously agreed to a $346-million deal covering the three labor organizations at the DWP.

Freeman then drew a hard line, initially refusing demands from the engineers group to increase the amount of severance pay for younger workers and provide for the redeployment of workers threatended with layoffs.