Wringing their hands and beating their breasts, the nation’s highest paid City Council members finally started to face the harsh realities Tuesday caused by their failure of leadership.
Drastic measures are needed now either in the form of sharp reductions in staff or in their salaries or the city’s current budget crisis will become “unsolvable” within a year, as Chief Legislative Analyst Gerry Miller put it.
There’s no place left to hide with the costs of city pensions doubling in the 2010-11 budget year to $1.4 billion in taxpayer money as cost of living increases already written into contracts still in force despite sharp declines in revenue despite massive increases in taxes, fees and rates they and Mayor Antonio Villaraigosa imposed.
Chapter 9 Bankruptcy looms as the only way out unless the unions agree to sharp reductions in payroll costs or thousands of city workers lose their jobs with a resulting decline in already inadequate city services.
“Serious” was a word used often by council members they clearly were looking for a soft landing through an early retirement plan that would boost the pensions of more than 2,000 city workers — many of them delaying their retirement in hopes of a bonanza payoff from the city’s financial troubles.
The trouble with that solution is it eliminates a generation of senior managers in a way that makes the pension problems worse and loses the valuable skills and experience that many of them have.
The video excerpts I’ve pieced together from the 90-minute debate today contains highlights of the CLA and CAO officials reports to the council.
In the end, the council voted 9-2 to give the green light to start the laborious process of identifying 1,600 jobs for elimination — a paper saving of $80 million of the $530 million deficit now estimated for the 2009-2010 fiscal year.
Less than 400 of those jobs are actually filled and they will be eliminated on the basis of seniority. Even of the position of a top manager was eliminated, that person could take the next job below him or her and keep pushing people down until the least senior people are laid off.
Budget Committee chairman Bernard Parks acknowledged that the mayor’s budget proposal is almost certainly unrealistic. If the economy worsens, whatever budget the council finally adopts is likely to be running a deficit by the end of September.
Councilmen Richard Alarcon and Dennis Zine cast the two votes against moving forward, blowing a lot of smoke about how they, ineffectively, have warned of a looming budget crisis and now feel it’s wrong to take the first tentative step to fix it.
Needless to say, Councilman Jack Weiss couldn’t bother to show up for this important meeting and will not show up to two meetings next week because of “personal business” — presumably meaning he’s busy calling developers, contractors, lawyers and union bosses for money for his campaign for City Attorney.
Good lord…. I should have placed that bet on LA City Bankruptcy a month ago.
Wow.
“…reduce payroll or reduce the number of positions…”
“…80% of the (city’s) budet is for payroll…”
“…if things continue the way they are now, won’t be able to make the 2010-11 budget…”
So, what happens when the second largest city in America has to file bankruptcy?
Drastic action is required NOW.
Current revenues are no doubt significantly lower than the revenues anticipated in the current budget.
To determine the magnitude of the problem, the projected budget deficit of $530 million is about 12% of the General Fund and about 15-20% of payroll, including benefits.
We do not have the luxury of time to engage in a protracted negotiation with the municipal unions and their unyielding management. The City Council and Mayor, as painful as it may be, need to show leadership and act now and enact savings in the range of 15% of the General Fund.
The mayor and city council should immediately identify their wasteful spending on PET PROJECT before proposing any cuts of money being allocated to the neighborhood councils.
Today, budget chair Bernard Parks, including Councilmember Smith, is recommending a grand total of $1 million dollars for all 89 neighborhood councils for the 2009-2010 budget which each council will receive $11,235.00.
City Council needs to adopt an ordinance that will make all councilmembers position PART TIME. This change will save taxpayers billions of dollars and avoid any city layoffs.
The Stars Come Out by Leslie Dutton
http://www.citywatchla.com/content/view/2255/
Angelenos need to assist Ms. Leslie Dutton in saving public access. Please take a moment by contacting Mayor Villaraigosa, Council President Eric Garcetti and your councilmember, asking them to support Ms. Dutton’s on going efforts in seeking the news behind the news, before the 2009-10 City Budget is approved.
Mayor Villaraigosa
http://mayor.lacity.org/mayorsoffice/WritetheMayor/index.htm
City Council Directory
http://lacity.org/lacity/YourGovernment/CityCouncil/index.htm
Hey Ellen,
To answer your question of what happens if the 2nd largest city goes belly up, and I wish I could take credit for it, but I heard Doug McIntyre give the answer. Here’s what happens from as much as I can remember of what he said.
NYC went broke a few years back, and when they asked Pres. Ford for a bailout he said, ‘up your’; you got yourselves into this fix, get out of it…and they did.
They laid off 40% of their work force, and I’m betting that like in L.A. 99 percent of those laid off were dead wood sitting on their tenures.
They cut all non-essential services. Two cases in point for L.A. would be a million or two a year in caligraphy for citizen awards. Like a t.y. letter and no ceremony would be fine. Another is Office of (illegal) Immigrant Services, which I believe is in City Hall. How come there’s no Office of Real Citizen Services?
The City and the State aren’t countries. Neither maintain armies and the state Nat’l. Guard is for emergencies, which makes them police.
So what is the city obliged to do for its citizens. Six essential services, nearly as I can figure and if I’ve left something out, please remind me.
Police/Fire
Sanitation
Street Maintenance
Health Dept.
Animal Regs
Parks & Rec & libraries and I’m not sure how essential libraries are, although I’d hate to see them get the ax.
Education is an essential service, but L.A. City has no control over LAUSD (except for the tiny portion V. managed to get his grubby paws on), which has a mostly squandered budget that’s larger than the city’s, and I believe they get their money from county property taxes and not from the city’s general fund. I could be wrong; I just don’t remember at the moment.
Hi Ellen,
The best thing that can happen is for the City to file bankruptcy. If the Vallejo model stands, then all union contracts would become null and void.