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L.A. faces $100-million shortfall despite cost-cutting moves approved today

October 30, 2009 |  2:11 pm

The Los Angeles City Council faces a $100-million budget shortfall even after passing a trio of cost-cutting measures today that include two labor contracts and a plan for shaving 2,400 civilian employees off the payroll.

The council voted for a two-year pact with the police officers’ union that seeks to reduce police overtime expenses by 83% next year and a separate deal that cuts the pay of 22,000 civilian employees by 4.4% through June 30.

City Administrative Officer Miguel Santana said he will present a new round of budget-cutting proposals in December or January, once the city knows how many workers have agreed to retire. But he argued that today's votes represent progress.

“One hundred million sounds like a lot, but when it started out at $400 million, it’s much more tangible,” he said.

The council unanimously approved a reworked contract with the Coalition of L.A. City Unions, which represents 22,000 civilian employees. Coalition members agreed to increase the size of their contribution to the retirement fund and, for the remainder of the fiscal year, cut their pay by 3.5 hours in each 80-hour pay period.

In exchange, 2,400 employees will be eligible to leave up to five years early with full benefits. Early retirement will reduce expenses by $47.2 million between now and June 30, Santana said.

Councilman Jose Huizar praised the plan, saying it will allow the city to slash payroll costs without resorting to layoffs.

“With layoffs it would have been much more chaotic,” he said.

The council also voted 12-1, with Councilman Bernard Parks opposed, on the contract with the Police Protective League, which represents nearly 10,000 officers. That agreement reduces by 20% the salaries provided to newly recruited officers and will require officers to convert unused sick time into additional days off – a move designed to save $10 million.

The cornerstone, however, is a reduction in overtime costs, which are slated to drop by $45 million between now and June 30. By reworking the way in which overtime is compensated, officers will be able to accrue up to 399 hours of overtime – one and a half times the regular salary -- that can be paid out in future years.

Officers who work a 400th hour of overtime must be paid in cash. Although some officers will delay overtime payments, the LAPD will also need to reduce the total number of overtime hours worked by police, Santana said.

“At the end of the day, there will be a service impact,” he said.

Parks voted against the police agreement, saying it will, in many instances, delay the city’s overtime costs instead of reducing them.

“We’re deferring costs until future years,” he said. “And when those two years are up, we’ve got to pay for it.”

-- David Zahniser at L.A. City Hall