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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
Los Angeles County Grand Jury
• 2010-2011
Civil Grand Jury County of LOS Angeles
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 1 findings
F1
Page 296
DWP employee relations management staff has not initiated any substantive meet and confer sessions with employee bargaining groups to modify aspects of the retirement benefit package in an effort to reduce costs, despite total annual retirement benefit contributions of approximately $360 million or 46.9% of pensionable salaries in FY 2009-2010. August 10, 2010, The Segal Company, Re: Reciprocity program – Impact of Possible Suspension of Program 2010 – 2011 For at least 3 years, the DWP management has chosen to contribute amounts exceeding 250% of the Annual Required Contribution to its Retiree Health Benefits Fund. During this period, they have made $317,394,370 in excess contributions, while simultaneously requesting utility rate increases and advising City officials that the Department would be unable to pay the full amount of the 8% transfer to the City in FY 2009-2010, because of insufficient cash resources. The City and LACERS may owe the WPERP $183 million or more in UAAL for employees who transferred from City employment to DWP employment during the past 6 years, increasing the WPERP contribution requirements by $11.7 million annually over the next 15 years. The City Council referred this matter to the City Administrator, WPERP and LACERS to refine the analysis on October 13, 2010; but no further action has been taken since that time.
Recommendations 4
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R1Page 295The DWP Board of Commissioners give direction to management to evaluate and report back in closed session on alternatives for reducing the Department’s cost of employee retirement benefits.
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R2Page 295The DWP Board of Commissioners advise the new Ratepayer Advocate and the City Council of the decision by the DWP management to accelerate payment of the Retiree Health Benefit Fund ARC in each of the past three fiscal years to ensure that the prepayments are fully considered when the DWP seeks future rate increases or indicates that it is unable to make revenue transfers to the General Fund.
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R3Page 295Los Angeles City Council, the DWP Board of Commissioners and LACERS Board of Administrators need to expedite reaching an agreement regarding transferring funds to WPERP to cover the cost of an increased UAAL imposed on DWP, estimated by actuaries to equal as much as $183 million for the 6-year period between 2004 and 2010, due to Los Angeles City employees who have moved from City departments to DWP so that the burden is not imposed on ratepayers.
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R4Page 295Los Angeles City Council, the DWP Board of Commissioners and LACERS Board of Administrators need to amend the reciprocity agreement between LACERS and WPERP with regard to the transfer of employer pension contributions in order to prevent such inequity in the future. A 2010 – 2011 LOS ANGELES COUNTY CIVIL GRAND JURY REQUEST FOR RESPONSE California Penal Code Sections42 §933 (c) and §933.05 requires a written response to all Recommendations contained in this Report which shall be made no later than ninety (90) days after the Civil Grand Jury publishes its Report (filed with the Clerk of the Court). Respond to: Presiding Judge LAC Superior Court Clara Shortridge Foltz Criminal Justice Center 210 West Temple Street, Eleventh Floor, Room 11-506 Los Angeles, CA 90012 All responses for the 2010 - 2011 CGJ Report’s Recommendations must be submitted to the above address on or before the end of business September 30, 2011. Responses are required from: Recommendation Number(s) Responding Agency 1 City of Los Angeles (Department of Water and Power Board of Commissioners) 2 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 3 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 4 City of Los Angeles (Department of Water and Power Board of Commissioners) City of Los Angeles (City Council) City of Los Angeles (LACERS Board of Administrators) 42 Reference California Penal Code Sections §933(c) and §933.05 at the beginning of this 2010-2011 Civil Grand Jury Report 2010 – 2011