City officials are preparing to scrutinize financial records expected to arrive soon from a pair of Department of Water and Power employee training trusts believed to have spent more than $40 million over the past decade, with city Controller Ron Galperin planning to begin his audit in December.
The boards overseeing the Joint Training Institute and the Joint Safety institute — made up of DWP and union officials — approved a motion Wednesday to request the controller and the City Administrative Officer to conduct audits of their finances, according to Galperin spokesman Lowell Goodman.
The Los Angeles City Council approved a deal with DWP union chief Brian D’Arcy last week that includes releasing an annual $4 million payment to the two trusts, in exchange for half a decade of financial records.
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 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 Friday, 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 — were given seven days to sign off on releasing the financial records to Galperin and other city officials.
The boards had 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 also were 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.
