Los Angeles City Government can Bite Me

Spending plan imposes layoffs and furloughs to make up for the city's expected $530-million shortfall in 2009-10. But new revenue will help prevent police hiring freeze.
By Phil Willon

10:16 PM PDT, May 18, 2009

Saying Los Angeles' financial troubles are grave and expected to grow far worse in the years ahead, the City Council on Monday approved widespread layoffs and furloughs for city workers but set aside enough money to back away from a proposal to freeze police hiring.

The severity of the cuts remains in flux, however, as city officials and public employee unions continue to negotiate possible salary and benefit concessions that could save the city more than $230 million.

But with no agreement in place and a June 1 deadline to pass a balanced budget, the council approved a $7.05-billion spending plan that will force cuts at practically every city agency.

To make up for the city's expected $530-million shortfall in 2009-2010, public library and swimming pool hours likely will be reduced, sidewalks won't be repaired and left-turn signals will be installed at fewer intersections.

The budget also imposes 800 city worker layoffs, on top of 400 layoffs approved by the council earlier this month. It also requires many of the remaining civilian employees to take 26 unpaid furlough days. The entire city workforce numbers about 50,000.

The council was able to find more than $26 million to avoid imposing a hiring freeze at the Los Angeles Police Department. The council's budget committee last week recommended halting Mayor Antonio Villaraigosa's police hiring program, a move that would have prevented the LAPD from replacing the roughly 520 officers who leave through normal attrition during a typical year.

Council President Eric Garcetti said 480 replacement officers would be paid for by an unexpected $22-million increase in property tax revenue and a $4-million reimbursement to the city from the U.S. Department of Justice.

Garcetti, a Navy Reserve officer who returned from a training mission to help address the police hiring issue, also took a not-too-subtle swipe at Police Chief William J. Bratton, who last week threatened to pull officers out of Councilman Bill Rosendahl's district after his budget committee vote to freeze police hiring.

"There is no room or space for that . . . in this city," Garcetti said. "No mayor, no council member, no chief, nobody, has a monopoly on fiscal prudence."

The mayor had proposed expanding the LAPD to 10,000 officers by the end of summer, and that goal now appears unlikely to be met, although that could change by year's end if the city receives federal stimulus money for police hiring. But the mayor praised the council's efforts to find funding to keep the department near its current staffing level.

"Public safety is the first responsibility of city government and the core service we provide. It is fundamental to our success as a city," Villaraigosa said in a statement released Monday evening. "Over the past four years, we have made remarkable gains -- marked by falling crime rates, gang violence on the retreat and safer neighborhoods -- and we cannot afford to take a step back on public safety."

Villaraigosa suffered a setback on his proposal to auction off the city's parking meters and six garages to private investors, a plan modeled after long-term leases in Chicago that raised more than $1.7 billion.

Villaraigosa's proposed budget included $80 million from the deal, and his advisors predicted L.A. could pocket a windfall more in the neighborhood of $1 billion. Council members said they were uncertain the plan could generate revenue in time to include it in next year's budget. But members approved $500,000 to hire financial advisors to study and possibly structure those proposed transactions in the months ahead.

Scores of unionized city employees crammed into the council chambers when the budget hearing began at 10 a.m., most pleading with the council to find alternatives to layoffs.

"You're not just laying people off, you're shattering lives," city traffic Officer Gordon McCullough, 53, told the council.

With the rising price of gasoline, food and other everyday expenses, it's getting tougher and tougher for many employees to get by, McCullough said.

"There are people who are one paycheck away from landing on the streets," McCullough said. "It's easy to say, 'Let's lay people off.' It's hard to work to make government more efficient."

Councilwoman Wendy Greuel said the cuts approved by the council were difficult because they would affect families and neighborhoods throughout the city, but they were necessary: "If we didn't make these difficult decisions now, it would be even worse next year."

Villaraigosa has said he may be forced to lay off up to 3,000 workers if the unions do not agree to major concessions, including a possible salary freeze, buyouts, furloughs or paying higher costs for health and pension benefits.

The L.A. Coalition of Unions, which represents 22,000 city employees, is pushing for an early retirement package that would be offered to workers who are within five years of retirement. Aides to the mayor, however, said that would overburden the city's underfunded pension systems.

The city's top budget analyst predicts that L.A. could face a $1-billion budget shortfall in 2010-2011, and one even larger the year after, because of investment losses in the pension systems. By law, the city is obligated to keep the pension systems solvent.

The Los Angeles City Employees' Retirement System and the Los Angeles Fire and Police Pensions are expected to suffer combined investment losses of 25% in the current budget year and to have flat returns in the next year.

By 2014, the city's annual contributions to the two pension funds could grow to $2 billion.

phil.willon@latimes.com