City Council OKs early retirement deal despite opposition

The Los Angeles City Council voted this afternoon to move ahead with a plan to give early retirement to 2,400 employees while postponing raises for another 22,000, in hopes of balancing the budget without laying off workers or closing City Hall two days a month.

Meeting behind closed doors, the council unanimously voted to forward the proposal to the Coalition of L.A. City Unions for a ratification vote by its members, two council members said. The deal would then return for a second council vote.

“We can’t afford not to do it,” Councilwoman Janice Hahn said, minutes after the vote.

Still, representatives of one union said his members would probably file a legal challenge to the proposed agreement, a copy of which has not yet been released by city officials.

“The [early retirement plan] that they’re proposing is not legal,” said Bob Aquino, executive director of the Engineers and Architects Assn., which represents roughly 7,800 city workers not included in the negotiations.

Aquino accused the council of excluding some unions from its early retirement talks. And he warned that the council has not been provided with a legally required actuarial study that would spell out the long-term cost of the plan to the city’s pension system, which is projected to consume an increasingly large share of the city budget over the next five years.

Los Angeles Mayor Antonio Villaraigosa plans to have a news conference on the agreement this afternoon.

The proposed labor pact applies to civilian workers, including those who provide such services as trash pickup, park maintenance and library operations. Negotiations are still under way for police officers, firefighters and other unions.

Aquino’s warning echoed comments made two days ago by Gary Toebben, president and chief executive  of the Los Angeles Area Chamber of Commerce. Toebben said he has asked for financial information on the proposal but was told by the mayor’s office and council members that such information was confidential until negotiations were over.

“The public deserves a very thorough briefing when the council gets out of their closed-door session about what impact this will have on the budget over the next five years,” he said today. “Because, ultimately, the taxpayer will end up paying the bill. They’re not in the room. But they’ll end up paying the bill.”

Councilman Richard Alarcon said the plan would be less painful for the public than a furlough plan, which would force workers to take 26 unpaid days off in the coming year.

“We’re doing our best to save city services,” he said.

The chairwoman of the Coalition of L.A. City Unions, whose pact was being reviewed by the council, disagreed with Aquino’s assertions. She said representatives of the Engineers and Architects Assn. were present for the early retirement talks.

Meanwhile, Villaraigosa and Council President Eric Garcetti said this week that they expected that union members remaining with the city would cover the full cost of the early retirement program. Workers hired before 1983 would see their pension contribution hiked to 6% from a range of 2% to 4%, while other city employees would see their contribution to the pension system increase from 6% of their pay to 6.75% in July 2011.

Backers of the plan said the city has already ordered an updated actuarial study, which will not be completed until after today’s meeting.

The proposed agreement with the Coalition of L.A. City Unions is designed to dramatically reduce the possibility of layoffs and avoid furloughs, which would have forced the city to shut some city offices every other Friday.

Under the proposal, the coalition’s 22,000 members would not receive raises for two years. Those workers would then receive six raises between July 2011 and January 2014, along with two cash payouts.

To reduce payroll costs, the city would offer early retirement to workers who are as many as five years away from being eligible for retirement. To entice them to leave, the city would offer some workers cash payouts and, in some cases, credit them with enough years of service to qualify for retirement ahead of schedule.

City officials have been increasingly anxious over the rising costs of retirement benefits for its two pension systems -- one covering public safety workers, the other for civilian employees.

A May report from the city’s top financial advisor warned that the city’s required pension contribution — money that comes out of the same budget used to pay for basic services — could jump from approximately $660 million next year to more than $1.6 billion by the 2013-2014 fiscal year. That increase “far exceeds any projected revenue growth” and is not sustainable, the city's acting administrative officer, Ray Ciranna, wrote.

A favorable vote by the council would immediately send the labor pact to coalition members for ratification.

-- David Zahniser and Maeve Reston at Los Angeles City Hall

Comments

[Mark Moshlak]

The reason Robert Aquino is against the early retirement system is because under his crooked leadership has decided to hoof his own on its own outside the coalition. He's pissed because he's not getting what the coalition is. So when he complains about the 7,800 city workers, he's talking about everyone under his own union. Well Surprise Robbie, this is what happens when you run a clandestine dictatorship under the guise of a democratic union, and you decide to segregate yourself from the group. You were so swift to mark how EAA was in fantastic shape and not subject to the furloughs like the rest of the coalition was, sent out tons of notices on it, and walked prouder than a peacock because you boldly sent out other flyers letting your group know that their raises couldn't be touched due to the non-opener clause. Now you're angry because you same stupid tactics backfired in your own fat face and you can't walk the walk now. Good riddance you fool.

[lacityworkers.com]

No guarantee of anything except no cola & no raises which were guaranteed in this contract.
Furloughs still a possibility, Layoffs are going to happen as well. Why pay 0.75 More for Life instead of getting a guaranteed 5.75 %+ 5 % + 5%= 15.75%?
How could anyone vote for this except the 2000 people hitting the retirement lottery? Why sacrifice so LAPD, DWP, & LAFD CAN GET RAISES AGAIN? I'm sorry I will keep my 15.75% Guaranteed money and enjoy my furlough days because I can do simple math.

[anon]

just how stupid do these politicians think the taxpayers are? and if they keep abusing us, how long until those of us that do pay taxes decide to leave and pay taxes elsewhere???

furloughs are the way to go....

[way]

You could close city hall one week a mouth. It would work out. How often do you visit city hall. Was there to get a bike licence once. There was no line and no worker looked over worked or even that busy.
We need all the people services he is offing more than we need city hall open.

[Anon]

Layoffs notices are already been handed to some City employees in the unlucky departments that are under EAA.

[Grrbaldi]

EAA members are already learning we are the only ones who will be furloughed. Does this mean we won't get early retirement either? Why do we have to ask a newspaper what out union is doing?

[yo]

"I'm sorry I will keep my 15.75% Guaranteed money and enjoy my furlough days because I can do simple math."

15.75% of 0 is 0. Without concessions, there will be more layoffs than with concessions. Even simpler than your incorrect mathematical analysis.

[Los Angeleno]

The fact that the closures of essential city services will be averted makes this agreement a real victory for both citizens and workers alike.
If our taxes are going to pay for services, those services should be there for us. We take for granted libraries, parks and recreation and trash pickup, but when these services become limited, all of us feel inconvenienced.

[Lisa W]

Many state workers are already getting a 10% pay cut (furlough), and maybe more. And all UC system employees are about to get an 8% pay cut (which the press has not covered at all).

So why shouldn't LA city (and LA County) workers also take a pay cut? This early retirement package will cost everyone (workers and taxpayers) a bundle.

Any why the heck aren't DWP workers, or people like prison guards, also having to face pay cuts, especially since they are among the highest paid public employees? Oh yes, it's their politically powerful unions, that government officials are too cowardly to stand up to. So while everyone else gets pay cuts or furloughs, they get raises.

[martin]

thats ok los angeles can not aford this or any deals done close door s
i can tell you this los angeles or california dont have money
the unions can make any deal they one they have to get there money back from this politicians one way or another they have pay for city hall politicians
los angeles will file for chapter 11 before year end and all this garbage this crooks are doing in the back of tax payers will be trow out by the courts

[alan]

If you haters would read between the lines no L.A city employees are getting any raises for the next 2 years, Plus the 2400 projected personell retiring will only be replaced as needed which probably won,t happen soon, Plus the city of los angeles had there unions work on a deal that would benefit there employees and the city, So i would think people should be happy for this due to no one gets layed off and it helps the local economy, Don,t be a jealous HATER.

[Sea Fan]

It is amazing that the council will burden the city's pension system that is already deep in the hole by having 2,400 employees retiring early. In the city's early retirement offer during the last economic downturn, employees taking the offer were those older employees who were going to retire anyway. So the net result is the city is unnecessarily spending money on incentive to pay older employees to retire.

The notion that furloughing employees on Friday will drasticallly cut back city services is nonsense. Most city employees belong to unions and they are already on a 9/80 work schedule by not working every other Friday or Monday. So if they are furloughed every other Friday, this doesn't reallly change their total number of days on the job except that they willl be working one hour less every day they are in the office.

Therefore, furlough is the way to go because it spreads the pain evenly and it helps the city cut its salary expense without imposing additional financial burden on its pension system. Furthermore, it doesn't significantly reduce city service.

[yo]

"Many state workers are already getting a 10% pay cut (furlough), and maybe more. And all UC system employees are about to get an 8% pay cut (which the press has not covered at all).

So why shouldn't LA city (and LA County) workers also take a pay cut? This early retirement package will cost everyone (workers and taxpayers) a bundle.

Any why the heck aren't DWP workers, or people like prison guards, also having to face pay cuts, especially since they are among the highest paid public employees? Oh yes, it's their politically powerful unions, that government officials are too cowardly to stand up to. So while everyone else gets pay cuts or furloughs, they get raises."

First you characterize this agreement as not being a pay cut, then you ask why DWP et al don't have to face pay cuts.

Well anyway, it is indeed a pay cut. City workers are going to make less money after they ratify this agreement (or take furloughs) than they would without it (or furloughs).

As far as DWP et al, those workers do not have to make these concessions because they are paid from completely different funds. The DWP fund is solvent, and the LA City general fund isn't. Pretty straightforward. It has very little to do with their unions, and a lot to do with the fact that DWP is a quasi-independent agency with independent revenue.

All this is to say that comparing groups of people who are in different situations and implying thaty they are all the same because they are all public employees just confuses things. State workers are facing more difficult times because they are being paid by the state and the state budget is worse off than the City budget.

Why not ask why Toyota workers don't have to give wage concessions, when GM workers do? After all, they're all auto workers!

[frustrated]

Even if you are not represented by EAA, you don't get the early retirement if your job is on the excluded classes list. How come the COCU haven't posted this info and their workplace flyer fails to mention this fact that will exclude close to 900 employees?

[scaredemployee]

As a worker for the great city of Los Angeles i have come across a quite a few people that have been diligently serving their community for many years. Being in service and paying into the pension fund for over 35 years shouldn't be a penalty. That should be enough service time for a person to receive any package that is offered and it still is only worth a lower percentage than a regular salary. Do these employees deserve furloughs? Will furloughs and layoffs help stimulate our economy? The EAA is out fighting for furloughs and layoffs then let them have it. Bob Aquino should announce to the union sisters and brothers that he represents, some need to start printing up those resumes.

[Bill]

Just some more short-term thinking by the thoroughly incompetent, spineless City Counicl members. They do not consider the disasterous long-term effects of their decisions. They are more concerned about their reelection. The right thing to do would have been lay-offs and closing City Hall two days a month. Early retirements are not going to solve the problem at hand. Wait until 2011.

[Jimmy]

Why not raise ALL city employee's pension contributions to 9% like cops and firefighters? Why did some city employees only have to contribute ONLY 2% in the first place?

Lay off the under performing employees. Chances are that laying off the lazy will have ittle or no impact at their dept.

They should get rid of the biggest scam in the city called "DROP" for LAPD and LAFD employees. This is where an LAPD or LAFD employee with 33 years on the job gets their current paycheck + 90% of their pension added on while no longer contributing into the pension system. This means if a fire fighter or cop with 33 years on the job made $100,000 a year they get that plus the $90,000 into a separate retirement account. Gee making $190,000 a year for up to 5 years while no longer contributing into the pension system must be great. No wonder why the city is broke. Yeah I'm sure all the cops and fire fighters on the DROP are actually out there in the streets protecting the city and not in the office or admin positions. Sad fact is that the 100,000 amount is at the very low end of the salary range if they never promoted. Upper management make 150,000 and above.

[Downtown]

Furlough is the way to go. It is SHORT-term sacrifice to all across the board (workers and the city) Early retirement is bad math at this point and extremely unfari. It's not a solution, it makes the remainig workers to carry the burden. THEY will not buy much of anything under such curcumstances. Many of the new retirees would want to leve the state of CA - to avoid too heavy a taxation. Unbelivably irresponsibe AND incompetent.

[Wanna be startin somethin]

THE CAO SAYS IT WONT BE ENOUGH,

That increase “far exceeds any projected revenue growth” and is not sustainable, the city's acting administrative officer, Ray Ciranna, wrote.

Does this mean there will be layoffs anyway?

THINK!