DWP RAISES FLOW AHEAD OF INFLATION.

Byline: Mariel Garza Staff Writer

Hundreds of DWP employees would get pay raises of 14 percent to 18 percent - more than twice the projected rate of inflation - in three-year contracts set for approval today by the Los Angeles City Council.

The cost to the city Department of Water and Power would be $123 million to $139 million for raises and retirement benefits - although the total could go higher under a provision that requires the agency to match superior retirement benefits granted to any other city unions.

Whether the raises will be financed by higher rates for water and electricity has yet to be determined, although they ``will affect the bottom line to some degree,'' DWP Budget Director Jeff Peltola said Monday.

And compared with the 2.5 percent cost-of-living increase that local economists project for each of the next three years, the deal worked out with International Brotherhood of Electrical Workers Local 18 for DWP workers is much higher than what private-sector workers can anticipate, economists say.

``Los Angeles is considered the land of milk and honey as far as public employees go,'' said Jon Coupal, president of the Howard Jarvis Taxpayers Association. ``There seems to be an abject ignorance of the state of health of the economy ... in the granting of very expensive public employee compensation packages.''

The proposed DWP contracts also are better than those granted to their counterparts at City Hall. A three-year contract between the city and Service Employees International Union Local 347 gives blue-collar workers raises totaling 13 percent - still above the inflation rate.

``DWP is different,'' said Julie Butcher, Local 347 general manager. ``It's its own entity and generates its own revenue.'' Still, she said she hopes the DWP contracts will act as bellwethers when the regular city workers' contracts come up for negotiation in two years.

Brian D'Arcy, business manager for IBEW Local 18, did not return phone calls.

The proposed contracts provide a range of options, which would cost the DWP from $80 million to $96 million annually for raises, plus $14.3 million a year for retirement benefits.

In addition to the pay raises, the new DWP contracts include longevity pay, which could add 2.5 percent to a worker's base salary, and the ability to retire with a pension equal to 100 percent of the highest year's wage - higher than even what police officers and firefighters receive.

``California generally, and Los Angeles in particular, are way of out of line compared to other states and localities in the U.S.,'' Coupal said. ``And this is what voters and taxpayers need to keep in mind every time the city claims it's broke.''

Currently, the DWP operates at a surplus, with about $500 million in net income this year from $2.8 billion in revenues expected for the current fiscal year.

But the surplus doesn't necessarily mean the DWP won't pass on costs since it has some major capital-improvement projects in the works, Peltola said.

The Mayor's Office on Monday said the increase in the DWP's personnel costs will not come from the city's general fund, which gets about 5 percent of the DWP's gross revenues.

``It's all DWP money,'' said Deputy Mayor Matt Middlebrook. ``It would not impact the city's budget.''