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L.A. city officials dispute former mayor Riordan's bankruptcy prediction

May 6, 2010 | 11:20 am
http://www.the-village-pantry.com/images/events051408/38821147.jpgFormer Los Angeles Mayor Richard Riordan has been stirring a municipal hornet’s nest over the last few weeks, repeatedly warning that the city he once ran would need to file for bankruptcy unless major policy decisions are made.

His most recent comments were aimed specifically at Mayor Antonio Villaragiosa and the City Council.

But city budget officials have begun to fight back over the last 24 hours, issuing a three-page report that challenges some of Riordan’s figures. They also have begun arguing publicly that they inherited some of the city’s financial woes from Riordan himself -- particularly its growing pension burden.

In one of the last acts of his administration, Riordan campaigned for a ballot measure that made it possible for police officers and firefighters to receive 90% of their salaries each year once they retire, up from 70%.

 That beefed-up pension benefit, which was approved by voters, is seen by some budget analysts as a contributor to the city’s pension woes.

“We’re having to clean up after the lack of reform in our pension system from that administration,” City Administrative Officer Miguel Santana, the top budget analyst at City Hall, told a council committee on Wednesday.
The issue has piqued city officials so much that Riordan’s recent commentary published in the Wall Street Journal -– and his use of the B-word –- is scheduled for discussion Friday at the council's meeting. Riordan said Thursday that he hasn’t received an invitation but thinks that the discussion of his own administration is a waste of time.

“The relevant thing is where are we today and what are going to do about it,” he said. “To me, it’s child’s play to look at every sin I’ve done in my life, because you could spend 100 years doing that.”

Riordan, 80, has been discussing municipal bankruptcy as part of a larger campaign to roll back benefits for many of the city’s unionized workers. In his writings and remarks, he has argued that public pensions should be replaced with a 401(k) plan for new employees. He also said eligibility for retirement should be hiked to age 65; it currently varies by job classification.

In 2001, Riordan signed the ballot argument for Charter Amendment A, which established that police officers and firefighters could retire as early as 50. In that same election, Riordan endorsed Villaraigosa for mayor.

Riordan backed Villaraigosa in 2005 and again in 2009. Yet the sharpest words in his Wall Street Journal piece were reserved for his longtime ally.

“As a result of his delays in responding to the city’s fiscal emergency, Mr. Villaraigosa has squandered not just his career, but his relevancy,” Riordan wrote, along with former city animal commissioner Alex Rubalcava, president of an investment advisory firm. “He continues to insist that bankruptcy is not an option for Los Angeles even as anyone who can count understands there is no other option.”

Santana said the city is taking steps to make sure bankruptcy doesn’t happen. And he responded to some of Riordan’s recommendations, such as the assertion that the city needs to eliminate $300 million in retiree health benefits. Santana said that the city budget currently contributes $183 million for those benefits.

Riordan also called for the number of public employees to be scaled back to 2005 levels. Santana responded by saying that Villaraigosa’s proposed 2010-11 budget does just that. Santana also said Riordan, who left office in 2001, boosted the workforce by 8.5% during his administration, growing it to 35,459 positions.

Riordan has not yet received Santana’s position paper. But he said he would sit down with city officials to discuss the city’s financial woes at greater length.

“The bottom line is, we ought to get together with the experts I rely on and the experts they rely on and see who is right and who’s wrong,” he said. “But they don’t seem to have any interest in doing that.”

-- David Zahniser at Los Angeles City Hall

Photo: Riordan. L.A. Times file

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