MISH'S
Global Economic
Trend Analysis

Recent Posts

Wednesday, April 07, 2010 12:57 AM


L.A. to Shut Down City Departments in Budget Crisis; IBEW Local 18 Head: "How Taxpayers Feel Is Not Relevant"


Yesterday I noted L.A. Controller Says City Could Run Out of Cash by May 5

After raising taxes and fees, again and again and again, the city is broke and Mayor Villaraigosa is blaming the city council for not hiking fees yet again.

Having run the city into the ground, Villaraigosa calls for shutting down some city departments amid budget crisis

Los Angeles Mayor Antonio Villaraigosa called Tuesday for all city agencies -- except for police, other public safety and revenue-generating departments -- to close for two days a week starting April 12 because of the city's continuing budget crisis.

"We have to act, and we have to act quickly," Villaraigosa said at a press conference.

Villaraigosa's call comes one day after executives with the city's Department of Water and Power said they would recommend not sending a promised $73.5-million contribution to the city's beleaguered treasury because the City Council recently declined to grant a desired electricity rate increase.
Union contracts and pension benefits are the biggest city problem and Villaraigosa is ignoring police and fire departments, the worst problems of the lot.

DWP Digging

I have been doing a bit of digging into where those DWP rate hikes go. Here is an interesting article from way back in July 2008: L.A.'s best jobs: Average utility employee earns $76,949 per year
As the Los Angeles Department of Water and Power seeks a hefty taxpayer rate hike, a Daily News review of salary data shows the average utility worker makes $76,949 a year - or nearly 20 percent more than the average civilian city worker.

More than 1,140 of the utility's employees - or about 13 percent - take home more than $100,000 a year. And General Manager Ron Deaton, who is on medical leave, rakes in $344,624 a year - making him the city's highest- paid worker.

DWP salaries are on average higher than city and far higher than private-sector workers' even as the utility has come under fire for recent power outages and another round of rate hikes: A 9 percent, three-year electric-rate hike and a 6 percent, two-year water-rate hike.

While DWP workers have long been some of the highest-paid in the city, salaries got even more lucrative two years ago with a five-year contract guaranteeing 16.8 percent raises and up to 28 percent depending on inflation.

According to a study by Huron Consulting Group earlier this year, the total cost per full-time employee in fiscal 2007 was $142,400 a year including health care, death benefits and disability, workers' compensation, medical services, employee health benefits and training.

That's expected to rise to $151,000 in just five years.

"The increase in cost per employee is primarily due to wage increases dictated by the union contract," the study said.

Meanwhile, even though a city report concluded nearly four years ago that the pay disparity between DWP workers and civilians in some jobs was as much as 55 percent, the Daily News review of current DWP salaries shows the issue has remained unaddressed.
Bear in mind that is from July 2008. The DWP now wants a 22% hike for businesses and up to a 28% hike for residential customers.

Amazingly Mayor Villaraigosa has the gall to blame the city council for the budget crisis, for not approving those rate hikes.

Repeating a snip from the first link ...

Reckless, Irresponsible Spending

The mayor is now blaming the city council. Instead, Mayor Antonio Villaraigosa ought to look in a mirror to see who is to blame.

The city is broke because Mayor Villaraigosa led the City down a path of reckless and irresponsible spending says blogger Phil Jennerjahn in Petition to Recall Mayor Antonio Villaraigosa
Despite record income over the last five years, Mayor Villaraigosa has led the City down a path of reckless and irresponsible spending that would have been avoided by a more professional and logical City Official. In the face of a crushing recession, the Mayor actually accelerated spending and hiring to the point that the City may have to declare BANKRUPTCY before the end of 2010.

While he is now asking City officials to eliminate 1000 city jobs, the Mayor has selfishly refused to fire a single member of his enormous staff - including 16 Deputy Mayors and 93 personal staff members.

In 2009, the Mayor offered a 3.9 BILLION dollar contract to the IBEW (Electricians Union) for the potential construction of solar panels. The no-bid contract, awarded without competition to his political supporters, creates the appearance of corruption and collusion, and would have increased costs for citizens of Los Angeles.
DWP Salary Schedule

Here is a list by name and title of DWP Salaries.

Unfortunately the list is from 2007 and severely out of date. I am sure salaries are much higher now.

The Price Of Power

Inquiring minds are reading SoCal Connected Investigates The Price of Power
In the middle of the worst budget crisis in Los Angeles history, one department is thriving without mandatory job cuts, furlough days or loss of the perks they've come to enjoy. In fact, thanks to a new contract approved by the L.A. City Council in December, most of its already well-paid workers will get salary increases over the next five years. Which department is it? It's the Los Angeles Department of Water and Power (DWP) and this week SoCal Connected Anchor Val Zavala looks into how the DWP stays immune from L.A.'s fiscal problems.

In a rare sit-down interview, Brian D'Arcy, powerful head of the IBEW Local 18 (the union representing 9 out of ten DWP workers) defends the deal, saying the higher salaries paid DWP workers are merely the price of attracting talent in a competitive job sector. Confronted with the complaints of angry ratepayers, he responds that "...generally how they feel is not relevant."

According to a former DWP commissioner, some L.A. residents should soon expect their utility bill to exceed their monthly mortgage.
IBEW Local 18 Head: "How Taxpayers Feel Is Not Relevant"

Sadly that appears to be the attitude of L.A.'s politically and morally corrupt mayor as well.

L.A. desperately needs to dump Villaraigosa and elect a mayor and city council willing to stand up to union thugs.

Better yet, the city should declare bankruptcy immediately and seek to overturn those contracts in court on grounds the bargaining was not in good faith. Clearly, no one was representing the taxpayer.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Last 10 Posts


Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats