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City Council passes early retirement as union leaders make 'hard concessions'; workers must approve pact

September 18, 2009 |  1:59 pm
The Los Angeles City Council voted unanimously today to resurrect a plan to give early retirement to 2,400 employees, and reversed plans for imposing layoffs and furloughs on six of its civilian employee unions.

Negotiators for the city said they had persuaded the Coalition of L.A. City Unions to give up $78 million in “hard concessions” and convince its 22,000 members to contribute an extra .37% of their paychecks toward the city’s pension fund, covering more of the early retirement cost.

City Administrative Officer Miguel Santana, the city’s top financial adviser, described the concessions as “solid.” But he also said the city’s $405-million budget shortfall is so big that some employees — most likely members of a separate union, the Engineers and Architects’ Assn. — would experience an unspecified number of layoffs and continue to experience furloughs.

“Nobody likes furloughs,” Santana told the council. “It’s not a way to manage any organization. But it’s a necessary thing to do when you’re facing this kind of crisis.”

Santana said he would not describe the $78 million in union concessions until after the coalition’s members have ratified the new agreement.

Mayor Antonio Villaraigosa, who had promised to veto the previous early retirement proposal, is “extraordinarily satisfied with the results” of today’s vote, said mayoral spokesman Matt Szabo. In addition to the concessions, the city avoided having to award $27 million in raises that would have gone into effect immediately if layoffs had been approved, Szabo said.

“We have $100 million that we didn’t have before,” he said.

Labor leaders praised the council for extending talks throughout the week. “It was just hard to find $78 million ... but we figured it out in the end, all of us," said Bob Schoonover, president of Service Employees International Union Local 721. “It was a highly charged situation for everybody.  Nobody, no matter who they are, wanted to see the city go broke or services to be affected.”

Santana had urged the council to secure a 1.9% increase in retirement contributions from the coalition. The agreement approved today would bring the total to 1.07% — the amount identified by the city’s actuary as the amount needed to cover the departure of 2,227 employees up to five years ahead of schedule with full retirement benefits.

The coalition also agreed that the workers who leave would contribute an additional 1% of their pensions toward the cost of the early retirement plan.

Pension officials said that the added contribution from the workforce would generate an additional $141 million over the 15-year life of the retirement plan.

A union ratification vote will occur within three weeks, officials said. If the coalition’s 22,000 members support the deal, the council then would need to cast a second vote. After that, early retirement could become the target of a lawsuit by the Engineers and Architects’ Assn., which has repeatedly threatened to sue over the plan but did not attend today’s meeting.
Councilwoman Janice Hahn thanked the employee unions for engaging in late-night negotiations and developing a compromise plan. “What happened this week was you were able to keep L.A. working, and that’s what’s important,” she said.

Added Council President Eric Garcetti: “We are a family again.”

That declaration drew some grousing from blogger and former Los Angeles Daily News editor Ron Kaye, who criticized the council for failing to immediately release the details of the plan. “What you left out of this deal is the people. We’re part of the family too,” he said, adding: “We don’t know what the deal is; we’re excluded.”

Despite the upbeat message from council members, the city’s negotiators still need to secure $129 million in concessions from its police officers’ union, which has been asked to accept an overall 14% cut to their compensation — salaries, benefits, overtime pay and bonuses. One scenario under review would require  officers to take 18 days of furloughs, even as Villaraigosa pushed ahead with his plan for hiring 1,000 police officers.

That option was raised last week by Santana, in a report that delivered a series of dire warnings about the budget. Santana told the council that it could not afford to follow through with a plan to shield the coalition’s members from furloughs and layoffs over the next two years. The coalition won that concession after its members agreed to delay pay raises until July 2011.

The city began forcing members of the Engineers and Architects Assn. to take furloughs on July 1. Roughly two-thirds of the employees in City Controller Wendy Greuel’s office must take unpaid days off, according to the personnel department. Nearly 80% of the workers in the planning department must do the same.

So far, neither the mayor’s office nor the council have been forced to take unpaid days off.

-- David Zahniser and Phil Willon at L.A. City Hall