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Los Angeles city worker union rejects proposed contract [Updated]

July 31, 2010 |  2:01 pm

Los Angeles Mayor Antonio Villaraigosa's first major effort to rein in rising employee healthcare costs ended in tatters Saturday, with most sections of a major union rejecting a proposed contract that would have required them to begin paying for a portion of their insurance.

Three out of four bargaining units within the 4,800-member Engineers and Architects Assn. refused to ratify the agreement, which would have required its members pay 5% of the cost of their monthly premiums, according to preliminary results posted on the union's website.

The defeat followed a campaign by a coalition of six city unions, including the powerful Service Employees International Union Local 721, to torpedo the deal. Those groups called the concessions dangerous and said the proposed contract would have set a precedent for other city workers.

Los Angeles' elected officials have already laid off scores of workers in libraries, parks and other public facilities and are expecting another $320-million budget shortfall next year. City Administrative Officer Miguel Santana, the city's top financial analyst, said more services -- and employees -- will be on the chopping block unless the mayor and council find a way to pare back the cost of benefits.

"Every dollar we save in healthcare and pensions results in fewer layoffs, fewer furloughs and the protection of city services," he said.

Healthcare costs for city employees are expected to jump from $361 million this year to $514 million in 2014, according to city budget figures. Civilian city employees enrolled in Kaiser Permanente currently pay nothing toward their healthcare premiums, officials said.

Villaraigosa's Deputy Chief of Staff, Matt Szabo, did not respond to requests for comment Saturday. But the top executive for Engineers and Architects blamed its rival union for scuttling the deal.

[Updated, 4:03 p.m.: Villaraigosa Deputy Chief of Staff Matt Szabo warned that the Coalition of L.A. City Unions would "very soon regret" its involvement in the vote. He also said the city's financial situation would result in "much harsher measures on coalition members in the future."]

"There was a desperate campaign of misinformation sponsored by SEIU 721 aimed at our voting members, which included phone calls to their homes by SEIU organizers claiming to be 'working with EAA' who then proceeded to urge our members to vote 'no,'" wrote Michael Davies, interim executive director of the Engineers and Architects, in an e-mail.

A spokeswoman for Service Employees International Union Local 721 would not comment, referring calls to Benet Sanchez, a worker with the Engineers and Architects Assn. who stood by the larger campaign.

"Our members were completely capable of making up our own minds," said Sanchez, who works in the city's Bureau of Sanitation.

The proposed labor agreement with the Engineers and Architects would have reduced the number of furlough days for its members from 26 to 10 this year. But it also would have doubled the co-pay for the union's members, from $10 per doctor visit to $20 and set the stage for talks about city's steadily growing pension burden.

The Coalition of L.A. City Unions voiced particular ire that the Engineers and Architects had signed a letter of intent saying that they would be willing to consider paying a larger percentage of their salaries toward their pensions. Although that letter would have led to more negotiations, some leaflets opposing the deal warned that the proposed contract would force employees to give 9% of their salaries toward their pensions, up from 6%.

Pension costs for civilian workers are expected to increase from $299 million this year to $599 million in 2014, according to the city's budget figures. In recent months, former Mayor Richard Riordan has warned that those retirement costs will force the city to file for bankruptcy within four years.

-- David Zahniser