Los Angeles Mayor Eric Garcetti

Los Angeles Mayor Eric Garcetti has agreed to terms of a new labor agreement for Department of Water and Power union workers. (Genaro Molina / Los Angeles Times / July 1, 2013)

A tentative Los Angeles Department of Water and Power labor deal that holds the line on raises for three years, reduces pensions for new hires and sets a path for changing outdated work rules signals a turning point in labor power at City Hall, Mayor Eric Garcetti said Thursday.

“Today the balance of power at the DWP shifts to the people," Garcetti told a packed news conference where he outlined the details of the pact. The mayor thanked voters for electing him and praised the City Council for standing “firm as a city family during these negotiations.”

“We showed the power that we have. It’s the power of the people," Garcetti said, flanked by most of the City Council members, City Atty. Mike Feuer, Controller Ron Galperin and key city staff. “This department will now be managed by its owners, the people of Los Angeles.”

The city struck the four-year agreement with Local 18 of the International Brotherhood of Electrical Workers late Wednesday. It includes three years of no raises followed by a 2% raise in the final year, lower pension benefits for new employees and the creation of a labor-management panel that would seek to revise work rules that drive up costs.

It also sets aside 2% of DWP workers’ pay as a contribution toward active workers' healthcare. Total savings from the deal will be $456 million over four years and $6.1 billion over three decades, officials said.

The accord was struck after weeks of push and pull among the mayor, council leaders and labor officials. At one point Garcetti threatened not to sign the agreement if more concessions weren't made by the union. Some council members praised major elements of the proposal and raised the specter of labor strife if the city pushed too hard for more cost-cutting provisions.

Brian D’Arcy, the top official of Local 18, said the proposed contract represents a “a commitment to create real savings for taxpayers while protecting the interest of working people.”

“This is an important step toward enacting real solutions that save billions of dollars for the city and the ratepayers while ensuring the long-term health of the DWP and its health and pension plans," the union official said in a prepared statement.

The deal must be ratified by the International Brotherhood of Electrical Workers' local that represents 92% of DWP workers. That vote will take place in the next month, officials said.

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