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

February 9, 2010 |  2:25 pm
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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