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L.A. layoffs could cost the city more than $32 million

Under contracts negotiated last year, layoffs would trigger two raises in the coming fiscal year for union coalition workers.

May 11, 2010|By David Zahniser, Los Angeles Times

Los Angeles Mayor Antonio Villaraigosa's financial rescue plan for the coming year may soon boil down to the following question: When does it become too expensive to lay people off?

The mayor's plan for erasing a $485-million budget gap calls for, among other things, the elimination of 761 city jobs in the fiscal year that starts July 1, through layoffs if necessary.

But because of labor contracts renegotiated last year by Villaraigosa and the City Council, the city would be unable to accomplish that goal without first providing a 3% raise to more than 15,000 full-time members of the Coalition of L.A. City Unions. Six months later, those same workers would get a 2.75% pay increase.

As they lobby council members to kill the layoff plan, labor leaders are now highlighting that $32.3-million price tag and noting that the city also would have to shell out for unemployment benefits — $10,700 per worker, according to the city's Personnel Department.

"This is the first time that I've ever heard of a union fighting against a pay raise," said coalition spokeswoman Barbara Maynard. "But city employees are willing to forgo a pay raise that they negotiated if the city will work with us to keep critical services going and people employed."

Budget analysts have responded to the union campaign by saying that the plan to scale back the coalition's members would save nearly $16 million next year, even after raises are handed out. That figure would grow to nearly $63 million by 2013, said City Administrative Officer Miguel Santana, the top budget analyst.

Of the 761 jobs being targeted by the mayor, 210 could be eliminated without any need for pay increases. Workers in those positions either have no union representation or belong to the Engineers and Architects Assn.

The remaining civilian workers are represented by the coalition, which renegotiated its contract just last year to avert layoffs for its members even in a dire budget crisis.

As part of those talks, the coalition agreed to postpone a previously approved package of raises for two years, or until July 2011. In exchange, city leaders agreed to allow 2,400 city employees to retire up to five years early with full benefits.

Villaraigosa and the council also agreed to the provision that now serves as something of a poison pill: If layoffs are approved, the package of raises goes into effect immediately.

Santana said the council should press ahead with layoffs rather than risk having to carry them out next year, when the budget shortfall is still expected to exceed $200 million. "If there's one lesson we learned this fiscal year, it's that the sooner we act, the less painful it is for both our workers and our constituents," he said.

Villaraigosa is also looking to save tens of millions of dollars by imposing furloughs on coalition members, a move that also would trigger raises, according to Santana. Coalition leaders contend that the city cannot impose layoffs without their permission and would be willing to go to court to stop the layoffs.

Santana has not managed to persuade Councilman Paul Koretz, a coalition ally who opposes the layoff plan. Koretz said the $32-million price tag made more sense a few months ago, when the council was looking at as many as 4,000 layoffs.

"Rather than pay the $32 million for the privilege of canning a bunch of people, I think it makes sense to keep them and the services they provide," Koretz added.

At the other end of the spectrum is Councilman Bernard C. Parks, who contends that Villaraigosa's budget has too few layoffs, not too many. Parks, who heads the council's Budget and Finance Committee, said Villaraigosa has been overly optimistic about the amount of money the city expects to receive from a plan to lease 10 public parking garages and borrow against future parking meter revenue.

Parks' committee could vote as early as Tuesday to subtract $53 million in projected parking revenue from the budget, a move that would increase the size of the gap.

While labor leaders have been seeking eight votes on the council to block layoffs, Villaraigosa's budget team is searching for enough votes to keep its parking deal intact. Without that parking revenue, the city will have to scale back the workforce even more, Villaraigosa said.

"If the council affirms the budget committee's revenue numbers, then we'll have to . . . lay off, furlough and of course, cut even more services," he said.

david.zahniser@latimes.com

Times staff writer Phil Willon contributed to this report.

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