UPDATE: Mayor Antonio Villaraigosa will hold a 3:30 p.m. press conference with union leaders on the deal with city unions. His press release () calls it a “MAYOR-DEAL.doc
landmark agreement (that) will save $500 million over two years without layoffs through early retirements and raise deferrals" but no mention of what it will cost taxpayers.
Meeting behind closed doors, the City Council gave to unanimous agreement to give 2,400 city workers as young as 55 sweetened benefits if they retire early.
The vote was no surprise and requires the agreement of all six unions that make up the Coalition of Unions with 22,000 members. A similar deal is likely to be offered to police, firefighters and other city workers but not the DWP, which is expanding instead of shrinking despite the economic crisis.
“We can’t afford not to do it,” Councilwoman Janice Hahn told the Times after the vote.
Added Councilman Richard Alarcon: “We’re doing our best to save city services.”
The deal requires deferring cost-of-living pay raises for two years but requires the city make up the lost money plus a bonus in the following years. It also calls for unions to up their contributions to their pension fund from 6 to 6.75 — far below Social Security contributions for far better benefits — to fund the early retirement costs but doesn’t impose the increase for two years and ends it in 2026.
The Times reported there are serious financial and legal questions about the deal.
Gary Toebben, president and CEO of the LA Chamber of Commerce, has called for a thorough financial analysis of the plan.
“The public deserves a very thorough briefing when the council gets out
of their closed-door session about what impact this will have on the
budget over the next five years,” he said today. “Because, ultimately,
the taxpayer will end up paying the bill. They’re not in the room. But
they’ll end up paying the bill.”
Still, the Chamber later issued a statement saying it “applauds Mayor Villaraigosa, the City Council and public employees
union leaders for their hard work and dedication during these lengthy and
difficult contract negotiations. Saving 500 million dollars will be very
helpful during this period of economic downturn.”
The Engineers and Architects Union, under siege from the SEIU which is backed by the mayor, issued a similar call and questioned where the plan would withstand a court challenge.
“The [early retirement plan] that they’re proposing is not legal,” said
Bob Aquino, EAA executive director,
which represents roughly 7,800 city workers not included in the
negotiations told the Times.