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Showdown today over L.A. city budget could result in hundreds of layoffs

Villaraigosa After months of political jockeying, the Los Angeles City Council today is expected to vote on a controversial early retirement plan for city workers that, if rejected, could force layoffs of nearly 1,000 workers.

Mayor Antonio Villaraigosa on Monday reversed himself and said he could no longer support the early retirement plan he had negotiated, saying it would not do enough to solve the city's budget woes. 

City Council members offered to give union leaders until today to identify another $60 million in cuts that would be needed to salvage the early retirement plan. If the unions fail to do so, council members may be forced to back layoffs for as many as 926 custodians, recreation workers, building inspectors and other city employees.

Union officials said they would go to court if the city backed away from the plan they had agreed to in June, which called for trimming the payroll by allowing 2,400 workers to retire up to five years ahead of schedule.

Villaraigosa and his budget advisors now say that the early retirement plan would cost too much in pension benefits and deliver too little in savings to get the city through the current budget year. The city is overspending at a rate that would cause it to run out of money one month before the end of the budget year.

Labor leaders responded angrily, saying that Villaraigosa met with them in June -- hours after the council voted behind closed doors to move ahead with early retirement -- and reassured them that he was a man of his word who would honor the agreement.

"He said that a deal's a deal, and that he intended to stand by this deal," said Victor Gordo, an attorney who is secretary-treasurer of the Laborers' International Union of North America Local 777. "So I'm taken aback to hear ... that he's not intending to keep his word."

Villaraigosa's deputy chief of staff, Matt Szabo, said the agreement discussed in June was tentative and still requires a final council vote. And he argued that much has changed since June.

The city has seen a $75-million drop in projected tax revenue. And even if early retirement were approved, it would save only $12 million in this fiscal year, according to the city's financial analysts. With officials still facing a $405-million budget shortfall three months into a new fiscal year, Szabo said, the city needs a financial "course correction."

"The mayor has always preferred early retirements over layoffs, but the proposal falls nearly $100 million short of projections and is simply no longer financially viable," he said.

As Villaraigosa made his announcement, the council's Budget and Finance Committee found itself divided on the issue of early retirement, voting 3 to 2 on Monday against seeking concessions that would, in the eyes of the unions, doom early retirement. Three councilmen -- Paul Koretz, Bill Rosendahl and Jose Huizar -- said they weren't yet ready to make a decision and wanted to give labor leaders 15 more hours to find $60 million in cost savings.

"Let me just say that I could change my vote tomorrow," Huizar said.

For weeks, panicked financial analysts have been urging council members to take some action today that would begin to address the budget before they leave town for a conference in San Jose. City Controller Wendy Greuel issued one warning, saying that the city would run out of money in May if no action was taken.

Meanwhile, City Administrative Officer Miguel Santana, who became the city's top financial advisor last month, called on the council to impose 26 days of furloughs over the next nine months for all civilian employees.

Santana raised the prospect of furloughs for police as a way to cover the cost of Villaraigosa's five-year plan to add 1,000 officers to the Los Angeles Police Department. And he called for the council to shed 926 workers from the payroll, including 162 civilian employees at the LAPD and 70 workers in the city attorney's office.

Early retirement cannot be approved without support from 10 of the 14 council members. (One seat is vacant.) On Monday City Atty. Carmen Trutanich said he too opposes the retirement proposal, saying that it would have worked only if it had been approved months earlier.

"If we would have done it early on, it would have been a good thing to do, and for next year it might be still a good thing to do," Trutanich said. "But we're not going to save the money that we need to save doing it now."

Trutanich probably will have to defend the city from a lawsuit threatened by the Coalition of L.A. City Unions if early retirement is dropped. That coalition, which has 22,000 members, contends that the council's decision to seek a union membership vote on early retirement earlier this summer is legally binding.

Advisors to the mayor have been torn internally over the plan -- and whether it could deliver all the benefits that have been promised. Villaraigosa's in-house lawyer, Thomas Saenz, who negotiated the agreement with the unions, was one of its biggest proponents but left for another job earlier this year.

Villaraigosa aides have grown anxious that the lengthy process being used to approve early retirement was continually eating away at the potential savings to the city. Meanwhile, council members have signaled their anxiety over the consequences of today's budget vote.

At one point during Monday's budget committee meeting, Rosendahl suggested that his colleagues reject both early retirement and the layoff plan, at least temporarily. Councilman Bernard C. Parks suggested that such a move would require council members to "start printing money."

"If we don't do our job today and tomorrow, and we don't do it through the rest of this fiscal year, we can close the door on the city of Los Angeles July 1 because we won't survive next fiscal year," Parks said.

--David Zahniser and Maeve Reston

Photo: L.A. Mayor Antonio Villaraigosa. Credit: Los Angeles Times

Comments () | Archives (28)

These unions have too much power. It's obvious that the city councilmen are afraid of them. That's unconscionable. Let's break these unions and take back our city.

EAA spoke the truth early on and now it has come to pass

Funny, Parks already collects a quarter million dollars a year from his PD pension. Plus 15k a month as a Council member. Hmmmmm...

Mr. Parks makes enough money on his pensions to supplement 4 city employees with no problem. Can you imagine just how many more city employees we can retain if we simply capped the city pensions to just one per employee and under 90K for life. It would go a long way in saving real Jobs for people that really work. Mr. Parks needs to look at his income as a luxury that he has given himself along with all his other cronies and see the damage that he has caused to those that work hard for a living.

Lots of discussion about how this solution will not solve this year's budget problem. Maybe it is too late, but time marches on, as they say, and what does the city council propose for next year if there's no early retirement program?

The entire Early Retirement Package is a joke by getting SEIU and C.U. members to approved the agreement before obtaining an actuary study.

Slow action by the city's council members on the budget problems will force the City of Los Angeles into bankruptcy.

This is a simple case of mismanagement by the Mayor.

Cities, counties, and the state are broke. Tax revenues are plummeting because of unemployment and the foreclosure crises.

Union leaders: You can use your war chest of union dues to hire high-priced attorneys and file lawsuits but, in the end, it's pointless. You can't squeeze blood out of a stone.

Please sue Alan Greenspan, George Bush, and the former CEO of Countrywide instead.

The City dragged its feet and now not only will City workers face layoffs, but also furloughs--loss in pay, meaning loss in services to the City and loss in business in the City. A very sad ending. Villaraigosa and the City should be held accountable for every job lost in this fiscal mismanagement fiasco.

The city council is not responsible for a slowdown in tax revenue, but is responsible for balancing the budget.

Today it means cutting costs, which for a city means by setup reducing its services and laying off personal and require furloughs.

Mr. Rosendahl's suggestion to do nothing is disturbing to say the least. He is responsible for coming up with a balanced budget. And yes, the unions have to look outside of the box, the environment changed.

The Mayor was told months ago that this wouldn't work by Engineers and Architects Association union. So what did the illustrious mayor and his minions do because EAA dared to tell them this self-serving scheme of ERIP wouldn't work? EAA members were put on furloughs as punishment and made to be the bad guys who wouldn't cooperate by the Coalition and the Mayor. Now the plan hatched by the Coalition and Mayor is falling apart and Coaliton members may have to join EAA on furloughs after all. What a mess!

Good point Ramon. Capping pensions at 90k a year no matter who you are or what you did is justified when the average resident makes half that. They didn't mention how many hundreds of ex LAPD and LAFD staff have retired on injury-related early pensions (tax-exempt!) to work in Arizona. How is that not a scam? How can you be hurt too bad to fight fires in Los Angeles but manage to get hired to fight fires full time in another state?

What about using the $30M that the City just gave the Kodak Theatre to retrofit for Cirque de Soil? Or maybe siphon off some of the waived fee $$ towards paying salaries. They are having the El Grito festivities on the steps of City Hall and gave the folks hosting that $87,000 - and that only benefits the Mexican immigrant population...who other than them even know what El Grito is!!!! or cares!!! But all of downtown traffic is in a snarl and folks are late for work, heading home, etc. all so we can celebrate some priest ringing a bell for Mexico!

Cutting some of the Mayors excessive staff and his many travels out of the City could save at least a couple million! Getting rid of a full time PW Board could save another couple million...we are up to close to $40M now... Consolidate all the tree trimming into one Dept. instead of Rec & Parks, St. Services & DWP and save close to another $5M a year in duplicated or overlapping services. Close all City Offices 2x a Month and place every single employee but LAFD & LAPD on a 9/80 with the SAME day off every week and save another $10M in building utility costs, parking fees, etc. & get credits from LAQMD.

Wow look at that we are close to or above $55M savings. Savings for the City is not hard if they STOP thinking the status quo and start getting back to basics and stop trying to be all things to all people. Get back to providing, safety, infrastructure and governance - and leave all the other stuff for years when their is $$$ to spend!

The unions should realize the money isn't there. What's wrong with them?

The media is not mentioning this, but thousands of city union workers are already being furloughed and receiving an effective 7% pay cut. They are sacrificing.

It's now time for the SEIU and COCU unions to do their share and get furloughed.

thank god that someone is looking out for the poor taxpayer. this boondoggle of an early retirement for the cities union elite is a taxpayer ripoff!!! my opinion is to let the over paid lazy city workers get laid off just like the rest of us. let them then face the unemployment lines and put those valuable skills to work in finding new jobs...not on the city payroll. the bloated government should not be the biggest employer in the city...get rid of the fat and waste and excesses of the liberal elites and their handmaidens...the UNIONS who care nothing for the taxpayer...they only care about their stinking fat salaries and union dues!!!

Let's all hope another Jackson doesn't die, finding the money for that will really make the City Council wake up!

It is disheartening to hear the mayor wants to layoff and furlough additional city employees and severely cut more city services, before considering freezing police hiring. If indeed we are in a deep financial crisis, it would only seem prudent to consider everything before laying off or furloughing city workers. What business lays off or furloughs people, yet hire at the same time? It is a ridiculous statement by the mayor.

Get rid of the Union or perhap try find way to outsource jobs is want way to fix all these incompetence worker.

Take away the pension benefit, and the problem would be solved. The pension benefit is a relic of the past. Most workers today get a Defined Contribution Plan, 401k, 403b, Roth, etc. A matching DCP is more than fair. And, early retirement has got to be out of consideration. The tax payers can't afford to give these people a salary for doing nothing for the next 25 years! Wake up and smell reality!! Btw, Mr. Park's income is no luxury. It is the result of many years of hard work, moving up in society by protecting it. Unions have outlived their usefulness and are now corrupting our government!

These Union fat cats don't know how good they've got it even with a pay cut. I'm sure anyone of us could find half a dozen people who'd be willing to do their jobs for significantly less. And thumbs down to the Mayor for promising something he knew he couldn't deliver and Parks for sitting smug and pretty while he sees the people he's supposed to serve fight for every dime. Damn skippy the environment's changed. My taxes went up and it certainly wasn't supposed to pay for funerals and unnecessary trips. Talking to YOU, Mayor!

When City Personel get a raise why does a retiree also get a raise...once they retire their retirement pay should not increase when the working conterpart's does!

The unions need to give more...the City is in deep trouble and they are part of the reason. Better to give more than not to have a job!!

City workers that have the time in should be forced to retire...they have a nice pension...go enjoy it! There are those who would like a job or a promotion!

But in defense of the unions...Mr. Mayor, City Council..don't make an agreement you can't or not able to meet!

Also..no double dipping...a city worker retires..then he gets another job with the city or a city employee has employment outside their city position.

If early retirement for 2400 employees only saves $12,000,000, this is $5,000 per year per person. Said differently, pension and benefit costs are only $5000 less than full time compensation and work. It would be prudent to keep those close to retirement working, but with 26 furlough days and no overtime, for 3 years. This will save money now, prevent pension spiking and reduce long term pension liabilities.

From the mayors page:
If every employee took off just one unpaid hour per week, we could save $52 million and prevent more than 580 layoffs
If each employee contributed just 2% more to our retirement benefits, we could save $63 million and prevent more than 700 layoffs.
By simply deferring automatic pay raises, we could save $117 million and prevent 1,300 layoffs

Well the constituents in CD-11 are really getting their money's worth from Bill Rosendahl. His solution? Do nothing. Yeah Bill, that'll solve the problem. I wonder how these people can even sleep at night with how they are destroying Los Angeles. Oh yeah, you have to have a conscience. Something they seem to be lacking entirely. Our good mayor is not only devoid of conscience, his agenda seems to be to financially rape this city to the point of bankruptcy.

In every industry it is proven that unions no longer serve their purpose. The best thing we could do is dismantle all unions.

A seniority system determines layoffs in the city. Potentially, a person with lower seniority could get laid off and another person with greater seniority but no experience could fill that position. Significant layoffs would grid lock city business. When considering layoffs, this is the greater concern.
Nevertheless, the budget issues were known way before the fiscal year end. Whose fault is it that nothing was done...certainly not the employees.

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