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L.A. mayor again vetoes pick for fire and police pension manager

He doesn't say why he opposes the man who has been running the system for months and who is favored by representatives of sworn employees.

March 30, 2013|By David Zahniser, Los Angeles Times
  • Los Angeles Mayor Antonio Villaraigosa has again rejected the person picked to run the pension system for police officers and firefighters
Los Angeles Mayor Antonio Villaraigosa has again rejected the person picked… (Irfan Khan / Los Angeles…)

For the second time in a year, Los Angeles Mayor Antonio Villaraigosa has rejected the person picked to run the pension system for police officers and firefighters, antagonizing representatives of public safety employees who rely on the agency's $15.8-billion investment portfolio.

In a tersely worded letter, Villaraigosa informed the nine-member Fire and Police Pensions board last week that he had vetoed their decision to hire William Raggio, who is favored by representatives of the city's sworn employees.

Villaraigosa gave no explanation for opposition to Raggio, who has been running the system for nearly a year and has been rejected twice by the mayor. One pension board member accused the mayor of politicizing their recruitment efforts and pushing for someone who will be less independent.

"He's supposed to rely on us to go through this process, which we've done twice now," said George Aliano, a retired police officer. "We went through the interviews and the applications and all that stuff, and still he's not accepting it. So this is a sham."

The Fire and Police Pensions board will meet Thursday to figure out what to do next, Aliano said. The board has split representation, with five of its nine members chosen by the mayor and the other four elected by a mix of current and retired public safety employees.

"I wish I could tell you exactly what the game plan was, but we don't have one right now," said pension board member Ruben Navarro, who was elected to the panel by city firefighters. He called Villaraigosa's veto disappointing.

Villaraigosa spokesman Peter Sanders issued a one-sentence statement on the matter, saying the mayor wants "fresh leadership focused on controlling costs to the city while providing sustainable benefits to our retirees."

The agency administers benefits for 25,000 current and retired employees and manages a $15.8-billion investment portfolio. When those investments perform poorly, the city budget — which pays for basic services —- has to make up the difference.

As L.A.'s pension costs have consumed a greater share of the budget, Villaraigosa has flexed his muscle at two city retirement systems, removing pension commissioners who voiced dissenting views.

In 2011, the mayor tried to persuade the city's civilian pension board to delay a decision to lower its yearly investment assumptions from 8% per year to 7.75%. Similar moves had been taken by other retirement systems in the wake of the recession. But the mayor and others feared the move would increase the size of the city's budget deficit.

Last year, Villaraigosa vetoed the board's decision to hire Raggio moments before he was set to be confirmed by the City Council.

Raggio said he met with Villaraigosa aides before that first veto and was pressed on ways of reducing the impact of the retirement system on the budget. He argued that the agency should be run as efficiently as possible but that there are also limits on what it can do. "Ultimately, the cost of the pensions is decided between the council, the mayor and the unions" during salary negotiations, he said.

After his first veto, Villaraigosa said he wanted a more exhaustive and nationwide search. The board started over and chose Raggio a second time on March 16.

Sources familiar with the process, who sought anonymity because they were not authorized to discuss the details, said there were three finalists, Raggio and two outsiders: Solange Brooks, an investment officer with the California State Employees Retirement System, and Ray Joseph, who worked until last year at the U.S. Department of Interior.

The board deadlocked on the first vote. On the second, the board voted 5 to 4 for Brooks. Then the panel went 5 to 4 for Raggio, with the majority made up of public safety representatives and one Villaraigosa appointee — Gregory Lippe, sources said. Four other Villaraigosa appointees favored Joseph, who also has worked as a high-level investment executive for the state of New Jersey.

Tyler Izen, president of the union that represents rank-and-file officers, said Villaraigosa should "let the city know what his motivation for his veto is."

"Bill Raggio seems entirely qualified to me," he added.

david.zahniser@latimes.com

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