Tue, Jan

City Labor Deal will Bust the Budget, Electeds Hiding the Cost

LA WATCHDOG--In August of 2015, the City of Los Angeles announced what turned out to be a budget busting contract with the Coalition of City Unions that represents the City’s 20,000 civilian workers.  According to Mayor Eric Garcetti, this agreement “prioritizes service delivery and strengthens our long term fiscal health.” 

To the contrary, this back room deal contributed to the City’s never ending Structural Deficit (where personnel costs increase faster than revenues) and blew a gaping hole in the 2020 budget, turning a projected surplus of $68 million into $101 million deficit. 

But that’s not all, folks. 

The City also committed to a “goal” of hiring 5,000 civilian employees by June 30, 2018.  But in a December report prepared by the City’s Personnel Department that outlined the Targeted Local Hire Program, not one mention was made about the cost of this program or the impact on the City’s budget. Yet the City is looking at an $85 million deficit next year, but that was before the City Administrative Officer informed us on January 6 that this year’s breakeven budget is a pipedream as the shortfall may be as high as $245 million thanks to lower revenues and higher than budgeted litigation costs. 

While some of the new employees will replace higher cost retiring workers, the hit to the City’s budget has been rumored to be in the range of $250 million when considering the fully loaded costs of salaries, Cadillac healthcare plans, and very generous pensions. 

The Targeted Local Hire Program appears to be more of a social welfare program as it is focused on hiring and retaining of local Angelenos from underserved communities.  Under the proposed system, over 80% of the positions would be allocated to the applicants from the designated underserved communities.    

But what about all the other Angelenos who have stayed out of trouble and done what was expected of them.  Don’t they deserve a fair shot at these high paying, guaranteed for life City jobs that have very generous benefits that far exceed those in the private sector?  And don’t the odds favor them doing a better job? 

This is not the time to be expanding the City’s workforce.  The City is looking at a river of red ink of almost $300 million over the next four years, and that was before the realization that this year’s unexpected deficit may be as high as $245 million.  The depleted Reserve Fund is under severe pressure to fund this shortfall.  And more than likely, the economy is going to be hitting some headwinds that will put additional pressure on the budget.  And as we know, it will be hard to lay off employees that are represented by the campaign funding leaders of the City’s self-serving public unions who consider us their ATM.  

Rather than hiring and training 5,000 new workers and adding to the City’s permanent overhead, why not hire independent third parties to complete specific tasks such as repairing our streets and sidewalks, trimming our trees, and maintaining our parks?  

Before proceeding with the Targeted Local Hire Program, Councilmember Paul Koretz, the Chair of the Personnel Committee and one of the main promoters of this less than transparent program, should conduct public hearings and outreach so that we have a better understanding of this very expensive initiative and its impact on the City’s already precarious finances. 

At the same time, Koretz, City Council President Herb Wesson, and Mayor Eric Garcetti would be wise to follow the advice of the Los Angeles Times to “commission and independent analysis of the impacts” of the program and “allow plenty of time for the public [and the Neighborhood Councils] to ask questions.” 

A year ago, Koretz wrote, “The City of Los Angeles has a mission to provide the highest quality public service to the residents of the City in the most efficient and cost effective manner.” 

Koretz must honor this pledge.  

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Strategic Workforce Development Taskforce / Personnel Department / Letter of Agreement / Hiring Civilian Employees Council File 16-0109

 (Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  Jack is affiliated with Recycler Classifieds -- www.recycler.com.  He can be reached at:  [email protected].)