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Villaraigosa tells L.A. council that layoffs are only way to avoid 'financial tailspin'

Mayor
Mayor Antonio Villaraigosa on Tuesday made a rare address to the City Council to urge quick action on proposals to lay off workers and cut departments, warning any delay could force the city into a “financial tailspin.”

The mayor, greeted by boos from the audience of mostly city workers, said layoffs this year and next are unavoidable. He dismissed arguments from some council members that the city’s $212-million deficit — and a $485-million shortfall forecast for 2010-11 — could be addressed without sending out pink slips.

“There just aren’t unlimited options here,” Villaraigosa told the council. “I have profound respect for the difficulty of the decisions you have to make, but I want to say this. We can’t continue to say no to everything. We can’t say no to layoffs, no to furloughs, no to department eliminations. ... The fact is we can’t sustain this business model.”

Villaraigosa acknowledged that if the city became insolvent -- unable to pay its bills -- he could be held personally liable.

The mayor fielded polite questions from council members for close to two hours, just days after publicly expressing frustration about the council’s inability, during budget hearings last week, to take quick action to shave the city’s shortfall, including his call to eliminate 1,000 city jobs.

Earlier in the hearing, Council President Eric Garcetti defended its actions, saying it “didn’t slow down one day on the layoffs.” Last week, the council unanimously approved a motion instructing “that no layoffs of city personnel take place in the next 30 days,” although members directed the city personnel agency to identify 1,000 positions that could be eliminated.
But Villaraigosa and Garcetti tried to downplay any conflict between them, both taking shots at media reports for prompting criticism and creating a perception of disunity.

During his address to the council, Villaraigosa also pushed for the city to tap into hundreds of millions of dollars that could be raised by privatizing the city’s parking garages and meters, as well as the Los Angeles Zoo and convention center.

“Time is not our friend,” the mayor said. “Every day we wait to make the tough choices will only make the choices ahead even tougher.”
 
The mayor's and the city council’s fitful efforts to tame the budget deficit are being watched closely by the finance industry, which the city depends on for short-term loans that maintain its cash flow. Representatives from two credit rating agencies expressed concern Monday about Los Angeles’ precarious financial position, noting the council’s indecision on budget cuts last week.

City Administrative Officer Miguel Santana said a representative from Fitch Ratings told his office that, based on media coverage, L.A. elected officials “can’t seem to step up and make decisions. So if it can’t be done now, then when?”

Last November, Fitch downgraded the city’s credit rating on $2.94 billion in debt — a move that drove up interest rates and made it more expensive for the city to borrow money. Moody’s Investors Service, another bond rating agency, on Monday also “expressed concerns” about the city’s inability to balance the budget, Santana said.

On Thursday, Villaraigosa said he would order department heads to start the layoff process immediately, excluding police officers, and to start notifying workers likely to be targeted once other employees are shifted to vacant positions not paid from the city’s general fund.

In a letter sent earlier this week to the city’s public employee unions, Santana named the 1,000 positions he believes could be eliminated. That list identified 48 tree surgeons and four senior gardeners in the Bureau of Street Services, who are responsible for trimming the city’s street trees. It also included 89 workers in child-care centers operated by the Department of Recreation and Parks.

“This council has made it clear that layoffs can only be considered as a final option,” Santana said while appearing before the group Tuesday morning. “We are at a point where we have no other options. ... There’s no pot of gold out there that we haven’t tapped into.”

-- Phil Willon and Maeve Reston at Los Angeles City Hall

Photo: Mayor Antonio Villariagosa speaks to the City Council Tuesday on proposals to lay off workers and cut departments. Credit: Anne Cusack  / Los Angeles Times

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Comments () | Archives (36)

My hat's off to Mr. Villaraigosa for telling it like it is. While not a resident of the City of Los Angeles, I find it abhorrent and HIGHLY dysfunctional that the City Council would bend to pressure from unions and foolishly suggest that the citizens of the City should bear more tax burden to support a mismanaged organization.

I also applaud Mr. Villaraigosa's intestinal fortitude for announcing 1,000 layoffs/furloughs after the Council met about a week ago. It is FAR past the time where governments need to start operating more responsibly, perhaps trimming entitlement programs that foolishly squander tax revenue, thereby placing the burden of mismanagement squarely on the shoulders of the working man.

I keep hearing that each city council member has a fund set aside with millions of dollars to spend as they like. I hear Wendy Gruel is now looking into these slush funds. Where dose this money come from? Who accounts for it? Why do the people not have a say in what its spent on? Where is a detailed description of what its spent on. Why can't the public get a view of the balance?

Is this not the money of the residents of the City Of Los Angeles?

Mike

"Villaraigosa acknowledged that if the city became insolvent -- unable to pay its bills -- he could be held personally liable."

Wow. I was initially impressed by Villaraigosa for taking a brave political position. Now I know why.

The City Council, on the other hand, continue to act like cowards and puppets of the government worker unions.

It's time to look into abolishing public government worker unions. They place their lackeys in positions of power and in return, the lackeys fork over the taxpayers money to the unions. Stop the Abuse!

I never thought that Tony V and I would ever be on the same side of anything. His tumbling to fiscal reality is, obviously, a bit late, but better late than never...BRAVO Mr. Mayor!

The layoffs - I'll believe it when I see it!
I would actually want a notarized document that gives a list of names and the time and date they departed.

Maybe someone from LA Times can demand that.


Stop caving in the unions.. we got your back, Mayor. We're sick and tired of paying for their bloated benefits and pensions.

Why would we want to lease parking garages? Are they that difficult to operate at a profit? The companies that will be purchasing our garages owe the City $300 million dollars. If they were to pay that money we would not be in such
bad shape. As for the layoffs of 1,000 workers, the Mayor has already stated that 320 of these workers would be moved to "open positions" at other City run agencies. If they are open, how come only current City workers are under consideration for these positions?

I can't believe that nothing was mentioned about the $200M+ that the Parking Contractors owe the City. Of course we can't sustain the "business model" of letting all these debtors off the hook. Nothing was mentioned about going after them for the revenue that they owe the City. Just look what happens if you accumulate more than 5 parking tickets, they put a boot on your vehicle, right?
So how the hell does this "business model" translate into accumulating over $200M in back taxes to the City, and then wait 'till you've painted us all in a corner and claim a lack of options? At best, mismanagement. At worst, corruption!
Now, Antonio wants to make a fast buck by inviting more political contributing cronie$ posing as Parking Contractors? Out of the frying pan, into the fire?
Can you say CHICAGO?

48 tree surgeons. When did LA turn into a jungle? I must have missed that. I wonder why California is broke?

I agree with the Mayor that the current business model is unworkable.
That flawed model he speaks of is the one in which there is a lopsided allocation of funds for the greedy, inefficient and bloated "Public Safety" (fire, police and sheriff) personnel at the expense of monies for youth education, after school programs, non-profits, care-givers, nurses and the vast majority of school teachers.
The mayor and his cohorts live in fear of the so-called public safety unions because they know that these official-gangs have the goods on their personal lives and would spill the beans if their fat pensions, lucrative overtime and other sick-pay benefits were ever threatened.
Real public safety is one in which there are clean side walks, manicured boulevards, trimmed palm trees, clean beaches, filled pot holes, safe elevators, adequate street lighting and good paying jobs for those who seek it.
My new business model is a 10% pay cut of the police, fire, sheriff active duty personnel; if they resist then a 10 % across the board cut of all non-civilian personnel.
Then all other cities in the region that hire an ex-LA active duty person should be charged a fee for the training costs L.A had to incur for that officer.
If an office retires early and is un-injured, he would be responsible for a future pay garnishee for some of the training cost incurred by the city.
The next stage is a cancellation of many untenable building leases and a consolidation of all like agencies in a single business or utility mall, thus allowing for a citizen to interact with the city without having to travel to multiple building all across the city.
Finally, the County Supervisors, a moribund nasty lot, should take an immediate 25% pay cut and they should reduce their staff's pay by 15 % and have all employees post their resumes and qualifications in the public sphere for all to see, before they are hired. This will reduce the sick cronyism that exists in the Supervisors department.
That Mr. Mayor is the new business model.

A little to late dont ya think Mr. V. We knew this was coming but why wait at the last minute...Atleast he stepped up to the plate and left the ball on the Council's court. Because the pressure is off of Antonio..

But, in regards to unions..yea, they seem to leech of the money for unreasonable purposes..And if you carefully scrutinize the leaders of any city union. You'll notice that the majority of them will not be affected or laid off from their jobs

I agree wholeheartedly with the first four comments. And the Times better build a better business model and stop leaning so far to the left, thus alienating half of the customer base (how's that for a non sequitur?).

Villaraigosa FAIL, LA City Council FAIL, Los Angeles FAIL, CA FAIL

I like many others don't understand this budget fiasco. It's as though we are playing 'move the debt'. Just as many others who do not manage their finances properly, looks like LA is doing the same.

We keep moving debt from one credit card to the next.

It's a simple solution. Reign in debt spending. Do not spend more than you have. Only after you have done so, look to optimizing every dollar spent. If done properly there will be a huge surplus and we will be able to hire back those that were layed off and competent.

Just like state spending, LA's largest budget expenditures involve medical, law enforcement, and education. If we were to scrutinize each of these areas, we could easily find ways to better spend our money without affecting LA's citizens, those that are legal of course.

Villaraigosa is a hero for saying The Emporer Has No Clothes. These city workers are all pretending that they are so necessary, but most of them are placeholders soaking up tax dollars with sketchy work ethics. The part that angers me is their implied threats to shut down the city.

There is no money! Thank you, Mayor Tony, for saying the truth nobody wants to hear.

awwwww... after giving money endlessly to take care of gangs and kids of illegals, he suddenly wants to lay off tree surgeons, perhaps to be replaced by illegal aliens?

Is this is a political manuever so you can run for governor?

Youre not happy yet that LA degraded now you want to do it with the whole california?

Alas, a real 'business model' and the Los Angeles city government have nothing in common. If they did, these fiscal issues would be rare and less taxing (pardon the pun).

With the mayor waking up it looks like Meg Whitman's solution for California is making more sense day by day.

Once I lose my job I would like to see who is going to open public parks in pitch darkness and make sure there are no safety hazards or homeless people up to no good roaming the facility. I would also like to know who is going to sweep up broken beer bottles as well as make sure there are no sharp objects or broken glass on the childrens playarea and sandboxes. I also wonder who is going to scrub public toilets and discard syringes as well as drug paraphenilia. Is it going to be you? I don't think so! But if you think an employee from the Department of Recreation and Parks is not a public safety figure then go ahead and take my job. Thank you for having served this Wonderful City of Los Angeles for the short five years I was here and good luck in protecting and better serving our beloved fellow Angelenos Antonio Villaraigosa..!

Tough decision, but I agree with the mayor. Why should the city function any different than a private business? Due to budget cuts, I was laid off 3 years ago. Its tough, but people can sometimes bounce back, look into something new...possibly pursue entrepreneur ideas. Being employed is not a right, but a privilege, with dedicated hard work. Hopefully they don't lay off important city positions that would compromise our safety and services to the poor.

Not a fan of Tony V, but I've come to give him another chance.

Must be tough for a 'labor' guy to push for those terminations, I just hope the recent DWP raises weren't another way to move general fund employees over to the DWP.

Make those cuts, Tony V!!!!!!

Jay

Anthony Fierro the Pint Size Mayor and the city council created the Mess with their back door deals. The council has been a rubber stamp for the Mayor, since he took office. He has spent a lot of time away from the city for his own personal gain. The Mayor has made contracts with the unions we are paying for just to get his 15 minutes of fame. The Mayor has you fool just like the people that voted for him. If the election had rested on the valley he would have lost. The Mayor has not finished anything he as started. He took the State Bar 4 times , could not pass.

He gave AEG a gift of public funds for Michael Jackson's Memorial that would have the budget NOW. The Pint Size Mayor spent time trying to get the voters, the court and SAC. To give him LAUD. The Mayor takes orders from Bosses. He just another Empyt Suit that is all talk and No action. The people being cut did not make any decision on the budget. The Mayor said we all had to feel the pain, but it did not mean his staff and the council staff.

The Pint Size Mayor put his person life before his family and the city. So continue to take your hat off to a failure if you have on. I have never voted for him because I knew he was slick. He needs to grow up and take responsibility for his actions.

The people crying for city work blood are totally ignorant & missing the point. The city is in trouble because the Mayor & his hacks mismanaged & gambled the city's pension fund on the stock market. They gambled & lost & now people are paying with their jobs. He also made sure to give developers as many tax breaks as possible during the bubble, and what did the city get? So the moral of the story is if you give away the store & gamble away the savings (lining your own pockets at the same time), then try to fix things by taking it out of the workers, the General Public will think you're tough & call you a "hero." What imbeciles. We deserve the city we're going to get.

WHY isn't this City getting their act together and going after all the people/businesses that owe us money? Who's in charge of that..because they aren't doing their jobs!

Tell me WHY do retired employees get raises when their working counterparts do? That needs to STOP!

Why do they get such great retirement packages when non-city employees make due with SS and 401's, if their lucky. Put these city employees on the Social Security system.

These unions are destroying this city..give me give me give me..they always find money for DWP..and yet they want to possibly cut the police force.

There's money...but where is it, who's in charge of it and lets get someone in charge of it who has the taxpayers and this city's welfare at heart!!

And yet, we have the money to foot the bill for the Jackson memorial! Something is not right here!

WHY isn't this City getting their act together and going after all the people/businesses that owe us money? Who's in charge of that..because they aren't doing their jobs!

Tell me WHY do retired employees get raises when their working counterparts do? That needs to STOP!

Why do they get such great retirement packages when non-city employees make due with SS and 401's, if their lucky. Put these city employees on the Social Security system.

These unions are destroying this city..give me give me give me..they always find money for DWP..and yet they want to possibly cut the police force.

There's money...but where is it, who's in charge of it and lets get someone in charge of it who has the taxpayers and this city's welfare at heart!!

And yet, we have the money to foot the bill for the Jackson memorial! Something is not right here!

People act like city workers don't have a mortgage, bills, or a family to feed. We are just like everyone out there struggling to keep a roof over our head. The only difference is that we are dedicated civil servants that answer 911 calls when there is an emergency, we put up signs to keep the public safe, we trim trees because if we don't do it who will? City workers do so much for the public but they don't seem to notice or care. Yes, lay us all off so that way we won't be paying our taxes to the City of Los Angeles because we would have lost our homes.

I will be out there with my masters degree looking for a job like the millions of others out there. Maybe I'll apply for a private sector job.

 
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L.A. Now is the Los Angeles Times’ breaking news section for Southern California. It is produced by more than 80 reporters and editors in The Times’ Metro section, reporting from the paper’s downtown Los Angeles headquarters as well as bureaus in Costa Mesa, Long Beach, San Diego, San Francisco, Sacramento, Riverside, Ventura and West Los Angeles.
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