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Mayoral candidates discuss city employee retirement costs

Times columnist Steve Lopez asked each L.A. mayoral candidate 3 questions about city employee pensions. Their full answers are below.

August 21, 2012
  • From left to right: City Controller Wendy Greuel; City Councilwoman Jan Perry; City Councilman Eric Garcetti; Attorney and former federal prosecutor Kevin James.
From left to right: City Controller Wendy Greuel; City Councilwoman Jan… (Allen J. Schaben / Los Angeles…)

City Controller and former City Councilwoman Wendy Greuel:

1. How did we get to this point?  Do you regret your own past actions on employee contracts?

We aren’t alone in facing these challenges – nearly every city is grappling with the same issues.  The recession has hit families hard and it has hit the city hard.   With declining revenues, we are facing tough decisions as we pay the bills for decisions made when times were better.

Past decisions were based on the fiscal information we had at hand and a very different economic climate.  In December of 2007, when many agreements were negotiated, the revenue projection for this year's budget was $5.4 billion.  Now revenue is projected to be $4.5 billion, 17% lower than 2007.  

Looking back, at the height of the economic downturn, there were only tough decisions to be made. Looking forward, the city needs to identify efficiencies, streamline government and save more to meet its obligations in the future.  That's why I’ve consistently advocated for a larger Reserve Fund and suggested a 5% goal should be the minimum, not the maximum set aside for tough economic times to help avoid the painful choices we face today.  

2. What if anything would you do to control retirement costs?

There’s no question that we need pension reform – the question is how to get there in a way that is fair and puts the city on the path to fiscal stability. 

Getting our fiscal house in order would be one of my top priorities as Mayor and everything needs to be on the table.  Soon after my election, I would convene a working group representing labor, business, the City Council, experts and others.  I’m interested in building a lasting consensus, not dictating a solution that might be overturned by the courts or at the ballot box.  We will need to move beyond finger-pointing and work together to find real solutions.

As Controller, I am conducting an audit of the pension systems that could become a blueprint for reforms and potential savings, as other audits have been.

 3. Without new labor agreements, will city services diminish and how would you prioritize cuts?

Let’s be clear - the money in the city budget belongs to taxpayers.  We need a budget that reflects the priorities of the city and delivers the greatest value for every tax dollar. 

As Mayor, I would adopt performance-based budgeting that focuses on outcomes – what we are getting for every dollar spent.  I would reform the budget process so that it is transparent and accountable.  Taxpayers should be able to easily find out how their tax dollars are being spent.

If budget cuts are necessary, I would start with the results of the audits I have conducted as Controller.  We’ve identified more than $100 million lost to waste, fraud and abuse.  That has to stop.  I would also take a hard look at the performance of each department and determine how we can reduce costs while funding delivery of our core services.  We can't afford to reduce our workforce where that would mean a reduction in services.  We need to dig deeper to identify ways to cut costs and generate revenue. 

Los Angeles City Councilwoman Jan Perry:

1. How did we get to this point, and do you regret your own past actions on employee contracts?

We did not react fast enough to the economic downturn that has led to the structural deficits at the national and local level. My experience through this process and my evolution as a policy maker has taught me the importance of taking a long-term view and of ensuring that we consider and adopt mechanisms that allow us to save for the future, continue to deliver city services, and prepare for the unexpected. I have been able to use my experience to develop a strong record of reigning in spending and asking the tough questions while respecting the work of our employees. 

2. What if anything would you do as mayor to control retirement costs?

We cannot continue on our current trajectory and expect to deliver city services. The current system has to change and everything needs to be on the table including pension reform and the potential privatization of some city services. At the end of the day, we need to ensure the sustainability of our city budget while respecting our workers.

3. Without new labor agreements, will city services further diminish, and if so how would you prioritize cuts?

We are obligated to ensure the safety of all Angelenos. As mayor, I would support public safety efforts and prioritize quality of life issues like trash pick-up and street paving and repair in a manner that is forthright and realistic.  In other words, let the taxpayers know what we are able to do given our budget realities and the time frame in which services and infrastructure work will be provided.

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