Los Angeles City Council Chamber. Photo by John Schreiber.
Los Angeles City Council Chamber. Photo by John Schreiber.

The Los Angeles City Council approved a deal Wednesday that paves the way for city officials to investigate how a pair of Department of Water and Power employee training and safety trusts spent tens of millions of dollars in ratepayer money over the past five years.

The city agreed to release an annual $4 million payment to the Joint Training Institute and the Joint Safety Institute, in exchange for half a decade of financial records, under the pact with DWP employee union chief Brian D’Arcy.

The 21-page letter of agreement was approved without discussion by the City Council.

D’Arcy who heads the International Brotherhood of Electrical Workers, Local 18, had refused to allow financial documents from the trusts — formed more than a decade ago to address DWP worker safety and training issues — to be audited by City Controller Ron Galperin.

D’Arcy contended the controller did not have the legal right to subpoena records from the organizations, which he said were independent from the city.

Galperin, in turn, refused to release the DWP’s annual $4 million payment to the trusts. The payments are part of a collective bargaining agreement with the DWP employee union, and the union has received at least $40 million in the dozen years.

The agreement includes most of the 13 conditions proposed by City Council members, and settles most of the legal disagreements between the union and the city, with the exception that the two sides will not be settling a dispute over the controller’s right to audit the two trusts.

In the ongoing litigation, D’Arcy challenged Galperin’s subpoenas for financial records. A judge decided in favor of Galperin, and union officials are appealing the ruling.

Under the agreement approved today, D’Arcy has consented to present five years of records, and the $4 million payment to the trusts will be on hold for 120 days while Galperin conducts his audit and interviews trust officials. If the controller spots any illegal activity in the records or if D’Arcy refuses to produce the documents, the $4 million payment could be withheld.

Any improper activity discovered during the audit would be sent to District Attorney Jackie Lacey, who is also investigating the two trusts, City Administrative Officer Miguel Santana said.

The JTI and JSI boards of trustees — made up of an equal number of city and union officials — need to meet within seven days of the agreement going into effect to sign off on releasing the financial records to Galperin and other city officials.

The boards have not met in the past eight months, with the union objecting to a pair of management trustees appointed by Mayor Eric Garcetti, though a judge recently ordered the union to recognize them as legitimate board members.

City officials who pushed for the deal were also concerned that by not releasing the $4 million payment, the city would be accused of violating terms of a recently reached labor agreement with the union.

That labor agreement, signed last summer, defers cost-of-living increases for three years and institutes a new pension tier.

Galperin said he has been demanding for the past year that the trusts “open their books.”

“With this agreement, the trusts are fully agreeing to comply,” he said. “Most important, this agreement stipulates that no city funds will be paid to the trusts unless the trusts cooperate fully with the audit. This is a clear and important step toward greater transparency and ratepayer accountability at the DWP.”

Mayor Eric Garcetti said the deal will give the city the ability to “open the books and follow the money, which is what DWP customers deserve.”

D’Arcy said the union’s “highest priority” is to “ensure the safety” of the DWP workforce, in light of “serious accidents and life-threatening injuries” affecting workers during the past few years. The two trusts “are effective and independently operate to protect the safety” of the utility’s 8,000 workers,” he said.

“Today’s action ensures that the collective bargaining agreement ratified last year is not jeopardized and that the trusts will continue to operate to protect and train the work force at DWP,” D’Arcy said. “We look forward to collaboratively working with DWP on tackling the challenges that it faces today and into the future.”

City News Service

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