- Written by Jack Humphreville
05 Oct 2012
LA WATCHDOG - The employees of our cash strapped City of Los Angeles are caught in the middle, between a broken City whose finances, pension plans, and infrastructure are an absolute disaster and an inefficient, poorly managed bureaucracy overseen by meddling, know it all, fiscally irresponsible politicians. A spineless collection of pols unwilling to make the tough financial, operational, and administrative decisions necessary to salvage the City’s finances because they fear the self serving, campaign-funding union bosses that control the purse strings of the City’s powerful public labor unions.
Hard working Angelenos are also caught in the cross fire as they do not believe a word that comes out of City Hall, as they see their once proud City and its lunar cratered streets going to hell in a hand basket, wallowing in corruption, and heading towards insolvency.
The City’s morass was evident when Bob Schoonover, President of SEIU Local 721, addressed the City Council, opposing the Mayor’s new pension plan for new civilian employees.
He rightfully asserted that Villaraigosa’s “Retirement Security Plan” will not save the City any money because of the City’s hiring freeze.
Schoonover also made the unsubstantiated claim that the City’s civilian workers had saved the City $850 million over the last four years - an average of $212.5 million a year (4.6% of this year’s General Fund Revenues).
There is no question that our civilian workers have made sacrifices.
Their contributions to the Los Angeles City Employees Retirement System increased by 1% of their salaries over the next 15 years to help defray 40% to 45% of the $600 million cost of the 2009 Early Retirement Incentive Program (the “E-RIP Off”).
Our civil servants are now required to contribute another 4% of their salaries to cover other post retirement benefits.
Civilian employees are also footing higher co-pays under their medical plans.
At the same time, workers’ incomes are being dinged by furloughs (13 to 26 days a year) and five unpaid holidays between Christmas and New Years.
The size of the civilian work force has been reduced by almost 5,000 people (incidentally lowering the amount of dues collected by the unions). However, there were less than 500 layoffs, as 2,400 workers retired early pursuant to the very generous E-RIP Off, and 2,100 surplus city workers were dumped onto DWP and the other special revenue departments.
Yet, to help offset these sacrifices, the average salary of our civilian employees has increased by 24% from 2005 to 2011, to over $72,000, a 30% premium to the County’s average household income. And this does not include medical and pension benefits which result in a total compensation package in excess of $100,000.
Furthermore, the salaries are contracted to increase another 11% by July 1, 2014.
Unfortunately, Schoonover’s remarks focused only on his union’s own self interest as he and a parade of other union representatives failed to address the City’s dire financial condition and its march to insolvency.
So in addition to documenting the claim that the civilian workers saved the City $850 million over the last four years, Schoonover and the Coalition of City Unions need to demonstrate their concern for the City’s perilous financial situation by developing a detailed plan that eliminates the projected four year cumulative budget gap of $1.1 billion and, at the same time, begins the systematic repair of our lunar cratered streets and the rest of our deteriorating infrastructure, and the gradual elimination of the City’s $10 billion unfunded pension liability.
This plan must also address the Structural Deficit, where the $768 million growth in salaries, benefits, and pension contributions over the next four years exceeds the increase in General Fund Revenues by almost $300 million.
And if the Coalition of City Unions was really interested in preserving the goose that lays the golden eggs year after year, they would endorse the common sense ballot measure that would require the City to “Live Within Its Means” before more drastic measures are mandated by the City’s insolvency.
While the City’s union leadership appear to be more than a little upset at the Mayor’s nickel-dime pension reform plan for new civilian employees that does little to solve the City’s ongoing budget deficit. They will go absolutely ballistic if Mayor Riordan succeeds with his plan to put real pension reform on the ballot.
And once this sure fire winner is on the ballot, it will be too late to negotiate as Angelenos will overwhelmingly endorse real pension reform, just as over two-thirds of voters did in San Jose and San Diego despite massive opposition by the self serving public labor unions.
It is time for the leadership of our City’s public labor unions to become part of the solution to ensure our City’s very solvency rather just pushing their own selfish agenda. A four year financial plan would be an excellent beginning.
Vol 10 Issue 80
Pub: Oct 5, 2012