L.A. City Council approves pension reforms despite protests
Despite a raucous protest and threats of a lawsuit from city labor unions, the Los Angeles City Council voted Tuesday to roll back pension benefits and boost the retirement age to 65 for new civilian employees.
The council voted 14-0 to approve the plan, which budget officials say will save $30 million to $70 million over a five-year period. The changes will not go into effect until a final vote in 30 days. In the meantime, the council instructed city negotiators to meet with union leaders "to find common ground and to avoid litigation."
Councilman Eric Garcetti, who called for the new round of talks, said he doesn't expect any substantive changes to the pension plan to come as a result. Victor Gordo of the Laborers' International Union of North America said union leaders are always willing to meet with city officials, but he said a lawsuit may be unavoidable because the city has sought to make the pension benefit changes without formal bargaining.
"As far as we're concerned, they've moved forward with unilateral action," Gordo said.
Under the proposal, spouses of retired workers will no longer be eligible for city-funded healthcare. City employees will see their take-home pay reduced in years when their retirement fund takes a hit in the stock market. And workers who attempt to retire at 55 after 30 years of city employment will receive pensions that are roughly one-third the amount provided to existing employees.
The proposal will effect only newly hired civilian city workers, not existing ones. Police officers, firefighters and employees at the Department of Water and Power will also be exempt from the changes.
The plan was backed by Council President Herb Wesson and Mayor Antonio Villaraigosa, whom union members targeted in a noisy protest outside of City Hall before the vote. Donning the "cheese-head" hats favored by Green Bay Packers fans, the protesters held up signs that featured photographs of Villaraigosa next to Scott Walker, the Republican governor of Wisconsin who drew national union ire for his push to reduce pensions.
The signs suggested the two elected leaders were “separated at birth.” During the council hearing, protesters interrupted the meeting with shouts of “We are not Wisconsin!”
Labor leaders contend that the pension changes will make it more difficult for the city to cover the pension burden of existing employees. Bob Schoonover, the president of SEIU Local 721, said the new plan will not save money immediately, and suggested there were better ways to cut employee costs, pointing to council members who engage in so-called “double-dipping” by collecting pensions from one city job while working another.
Councilman Dennis Zine, a former traffic officer, receives an annual pension of $102,692, according to city pension officials. Councilman Bernard C. Parks, a former chief of the LAPD, receives a yearly pension of $290,607.
Zine and Parks receive those pensions while earning a salary of $178,789. Last year, Zine took a voluntary 11% cut to his council pay, earning roughly $162,000, according to officials in City Controller Wendy Greuel’s office.
Representatives from two business groups – the Los Angeles Area Chamber of Commerce and the Valley Industry and Commerce Assn. -- spoke in favor the pension changes, drawing boos from the audience. Doug Arseneault, legislative affairs manager for VICA, said council members were trying to preserve city services and keep from “completely falling off the fiscal cliff.”
“It is simply unjust that residents and businesses must pay some of the highest tax rates in the country and yet city departments are unable to fulfill their responsibilities,” he said.
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-- Kate Linthicum and David Zahniser at Los Angeles City Hall
Photo: Surrounded by city workers, SEIU 721 President Bob Schoonover
addresses the Los Angeles City Council on Tuesday to protest a proposal to
cut future city workers'
retirement and health benefits. Credit: Anne Cusack / Los Angeles Times