Results tagged “LACERS” from Ron Kaye L.A.

The bill to taxpayers for city pensions is close to $1 billion this and is expected to go far higher in coming years which is the No.1 reason services are being slashed, assets sold and bankruptcy looms as the only way out.

Among the many sweetheart deals over the years that have led unions to finance the campaigns of our elected officials is a little clause that LACERS uses to make sure retirees get 3 percent cost-of-living increases in their pensions even when there is no inflation.

This year, LACERS reports the increase in the consumer price index for 2010  "for the Los Angeles area is negative 0.8%. This is the first time in LACERS' history of COLA processing that a decrease in the CPI has occurred."

Not to worry, pensions are not being decreased.

"In spite of the negative change in CPI, none of LACERS Members and beneficiaries will experience a reduction of their retirement allowances," LACERS explains on its website.

That's because increases in pensions are capped at 3 percent and when inflation goes higher than that, the excess is "banked" so it can be applied in hard times like we're experiencing now.

In other words, retired civilian city workers can always count on 3 percent more every year except for those who started getting their pension in the last few years of low and negative inflation. Here's the table of increases just approved by the LACERS board:

Effective Date of Retirement	Cost-of-Living Adjustment
July 1, 2005 and earlier	3.0%
July 2, 2005 to July 1, 2006	2.8%
July 2, 2006 to July 1, 2007	1.3%
July 2, 2007 and after	0%

In contrast, all those millions of Americans dependent on Social Security capped at about $22,000 annually for the highest earners versus 70 to 90 percent of highest pay for city workers -- got no increase this year.

Public employee unions see nothing wrong with that, arguing everyone should get as good a deal in wages and benefits that they get, including full pensions at 55 instead of 66 like most of us on Social Security.

The Fire and Police Pension Fund operates differently than LACERS.

There is no cap on the annual increase for nearly all the fund's retirees so nearly all of them will get 1.4 percent more based on the board's determination that the CPI was up that percentage for the Los Angeles-Riverside-Orange County area in the 12 months ending Feb. 28.

The taxpayer bill for the LAFPP in the new budget is $360 million, LACERS $300 million and the DWP $150 million. The bills are projected to go up sharply unless there is a sudden economic turnaround or changes are made like raising the contribution rate to city workers or raising the retirement age.

While the future of Social Security and Medicare are very much in doubt, taxpayers are fully liable for the city employees pension and health costs unless a new deal is cut with the unions or bankruptcy forces changes in policies.

Of all the financial problems the city has, the most threatening to LA's future is the pension and lifetime health costs.

The average pension city workers are getting under the Early Retirement Incentive Program is $51,887 but the figure will go even higher when the five years' extra credit is calculated for those who retired between June and December.

Under a California Public Records Act filed by OurLA.org, LACERS officials released the full list of 1159 workers those who retired through the end of February.

The smallest pension is for $111 a month or $1,336 a year for a part-time crossing guard. The biggest is for $14,662 a month or $175,948 a year for a deputy city engineer.

Both of them retired before the final deadline for requesting ERIP on Dec. 15 so their pensions do not yet reflect 5 years' extra service credit that could add more then 12 percent to their retirement checks. The same is true for more than 300 workers who were "grandfathered" into ERIP before the deadline.

LACERS officials have crossed the halfway point in processing 2,400 city employees off the general fund payroll under the Early Retirement Incentive Program.

More than 1,500 city workers eligible for ERIP have retired in the last nine months compared to the 500 LACERS normally handles in a year.

The list made available is complete through February and more than 350 were processed in March. Figures for their pensions will be made available later.

Among the 1,159 on the list, 44 are getting pensions of more than $100,000 and 36 less than $20,000.

The eligibility for ERIP benefits potentially "Grandfathered Participants" will be clarified soon and retroactive benefit calculations will occur in a few months.

Here is the list complete through the end of February:

Class/Title                                                   Retire Date          Monthly             Annual

DEPUTY CITY ENGINEER I, II	07/18/09	$14,662.36	$175,948.32
SR ASST CITY ATTY	02/13/10	$11,977.50	$143,730.00
ASST CITY ATTY	02/13/10	$11,721.90	$140,662.80
ASST CITY ATTY	11/01/09	$11,497.14	$137,965.68
ASST CITY ATTY	02/13/10	$11,258.26	$135,099.12
DEPT CHIEF ACCT I, II, III, IV	08/29/09	$11,223.63	$134,683.56
PR CIVIL ENGINEER	01/02/10	$11,202.35	$134,428.20
ASST CITY ATTY	01/02/10	$11,017.93	$132,215.16
DEPUTY CITY ATTY IV	02/13/10	$10,967.13	$131,605.56
ASST CITY ATTY	02/13/10	$10,590.61	$127,087.32
ASST CH LEGISLAT ANLYST	02/13/10	$10,546.27	$126,555.24
ASSISTANT GM MANAGER PENSION	01/02/10	$10,484.57	$125,814.84
DEPUTY G M AIRPT / 2	02/13/10	$10,476.02	$125,712.24
ASST CITY ATTY	02/13/10	$10,459.33	$125,511.96
PR TRANSPORT ENGR	02/13/10	$10,155.87	$121,870.44
CH ADMIN ANALYST	08/18/09	$10,143.88	$121,726.56
DEPUTY CITY ATTY IV	01/02/10	$9,929.70	$119,156.40
STREET SVCS GN SUPT I, II	07/18/09	$9,906.72	$118,880.64
DEPUTY CITY ATTY IV	01/02/10	$9,760.78	$117,129.36
POLICE ADMN. I, II, III	07/11/09	$9,717.31	$116,607.72
ASST CITY ATTY	10/30/09	$9,640.28	$115,683.36
SR STREET LGT ENGINEER	10/17/09	$9,631.75	$115,581.00
ASST GM INFORM TECH DPT	08/29/09	$9,582.17	$114,986.04
DEPUTY SUPT OF BLDG I, II	10/31/09	$9,575.31	$114,903.72
PR DEPUTY CONTROLLER	08/05/09	$9,545.40	$114,544.80
CH MGMT ANALYST	07/18/09	$9,476.85	$113,722.20
ASST DEP SUP OF BLDG I, II	02/13/10	$9,419.16	$113,029.92
ASST CITY ATTY	02/13/10	$9,403.54	$112,842.48
CIVIL ENGINEER	10/21/09	$9,389.98	$112,679.76
SR MGMT ANALYST I, II,	01/02/10	$9,332.48	$111,989.76
DEPUTY CITY ATTY IV	02/13/10	$9,284.53	$111,414.36
DIR OF MAINT AIRPORTS I, II	01/02/10	$9,168.84	$110,026.08
ASST CITY ATTY	10/10/09	$9,130.59	$109,567.08
PORT PILOT I, II	08/26/09	$9,066.93	$108,803.16
PR CITY PLANNER	01/02/10	$8,993.78	$107,925.36
DEPUTY CITY ATTY IV	01/02/10	$8,970.96	$107,651.52
DEPUTY CITY ATTY IV	08/01/09	$8,893.55	$106,722.60
STREET SVCS GN SUPT I, II	07/31/09	$8,875.25	$106,503.00
SR TRANSPORT ENGINEER	10/30/09	$8,819.02	$105,828.24
SR MGMT ANALYST I, II,	01/02/10	$8,769.32	$105,231.84
DEPUTY CITY ATTY IV	02/13/10	$8,767.92	$105,215.04
INFOR SYST MGR I, II	02/13/10	$8,749.23	$104,990.76
CH CREATIVE SERV DIV	08/01/09	$8,730.04	$104,760.48
DEPUTY CITY ATTY IV	01/02/10	$8,714.95	$104,579.40
BUILD CON & MT GN SUP I, II	01/02/10	$8,705.15	$104,461.80
PORT PILOT I, II	12/18/09	$8,646.74	$103,760.88
PR CITY PLANNER	09/12/09	$8,549.36	$102,592.32
DEPUTY CITY ATTY IV	09/20/09	$8,431.50	$101,178.00
SR MGMT ANALYST I, II,	02/13/10	$8,400.31	$100,803.72
INFOR SYST MGR I, II	10/10/09	$8,374.18	$100,490.16

In the first six months after City Hall offered the Early Retirement Incentive Pprgram, 625 workers have actually retired with pensions averaging more than $1,000 a week with 32 of them getting pensions in excess of $100,000 a year, according to records obtained by OurLA.org. under the California Public Records Act.

Read who joined the city's nearly 1,000 members of the Six-Figure Pension Club and the list of the 625 who retired since enhanced pensions were offer to city workers and how much they get monthly at yearly. Go to OurLA.org.

There is an elegance to a completely corrupt political system that anyone with an artistic sensibility has to admire.

The case in point is disgraced LA venture capitalist Elliott Broidy and the nearly $1 million he used to buy influence and access so he could get his hands on hundreds of millions of dollars in public pension fund money.

That's quite a return on his investment, something made easier by Broidy's own role as an appointee of both Mayors Hahn and Villaraigosa to the Fire and Police Pension Fund board where he could influence decisions directly.

While Villaraigosa is busy in Copenhagen with his entourage of pals and bodyguards cleaning up the global environment, his staff back home was busy doing damage control by announcing he was giving the $2,000 Broidy gave him to an unspecified charity.

So are a lot of other politicians, none of whom, you can sure, had a clue about what Broidy or any of the others like him were up as they spread around political contributions and used the access they got in return to enrich themselves -- roughly a 1,000 % return, showing just how cheap a buy the pols are, the WalMart's of political corruption.

Not that any of them could possibly have known what was going on. That would make them criminals just like Broidy who is singing to prosecutors as loudly as he can to reduce or even avoid the four-year sentence he faces for outright bribery.

Like Villaraigosa, most of the others identified by the LA Times as recipients of Broidy money have found generosity in their hearts appropriate to this season of giving.

Here's the list: Insurance Commissioner and GOP gubernatorial hopeful Steve Poizner,  $22,000 to Toys for the Troops' Kids, $12,000 back to Broidy and his wife; Board of Equalization member Michelle Steel, $6,000 to charity; Attorney General candidate Rocky Delgadillo, the former LA City Attorney, $3,000 to charity; Assemblyman Van Tran (R-Garden Grove) $1,800 to charity.

There was no comment from state Republican Party ($79,000), state Sen. Tony Strickland (R-Thousand Oaks) and Assemblywoman Audra Strickland (R-Thousand Oaks) ($8,500 combined) and LA City Attorney Carmen Trutanich ($2,000).

 "Because there is that level of impropriety with that donor, it's important we not spend that money on the campaign," said Steel spokesman Tim Clark.

Gov. Arnold Schwarzenegger ($86,000) and Assemblyman Mike Feuer (D-Los Angeles) ($3,200) were more sanguine, saying the money was already spent.

It's clear Broidy, a billionaire and finance chairman of the Republican National Committee in 2008, displayed no partisanship when it came to buying favors from politicians.

New York Attorney General Andrew Cuomo, who has spearheaded the pension fund scandal investigation, laid out in detail how Broidy bribed officials and manipulated the system to win $250 million in investments for his firm, Markstone Capital.

What isn't clear is how Broidy got investments from CalPERS or the Fire and Police fund or whether authorities in LA or California are actually doing much to find out. All the action so far has come from Cuomo and the Securities and Exchange Commission.

Politicians in California have to be really stupid to actually violate the laws they have written on public corruption which require a confession or at least a recording that shows they were directly giving favors for cash.

Perhaps Broidy or the others who have pleaded guilty will shed some light on what went on.

But don't hold your breath. Attorney General Jerry Brown and District Attorney Steve Cooley have done nothing but acknowledge they are "reviewing" developments in the unfolding scandal.

That leaves it to the Feds. So the question is just how far will the Obama Administration go to find out the truth about what is largely a Democratic scandal in New York, New Mexico and California.

Don't hold your breath. What usually happens is they find some fall guys in the private sector and close the case against public officials because of insufficient evidence.

The evidence of mismanagement of public employee pension funds is quite sufficient.

As Jack Humphreville reports on City Watch LA, the Fire and Police Fund -- the one Broidy was part of -- has seen its unfunded liability triple to $5.9 billion.

That will require up to 80 cents in pension payments by taxpayers for every dollar of payroll. The same is true of the two other city pension funds and CalPERS as well.

The politicians have given sweetheart deals to public employees that are not affordable. They took campaign contributions from the investment industry in exchange for investments of huge sums of public pension fund money.

That's a crime that must be prosecuted if we are to restore public trust in our government.

Setting the stage for a showdown over cutting city spending, the LACERS Board approved the Early Retirement Incentive Program (ERIP) that will cost up to $150,000 each for an estimated 2,400 workers.

The board which oversees funding of pensions and lifetime health benefirts for retirees and more than 22,000 current city workers voted 4-3 Tuesday to overrule its staff recommendation for a 5-year payback period -- the timeframe that the city will realize payroll saviings from the plan.

Got to OurLA.org to read the full story.

It's dizzying sometimes trying to tell the smoke from the smokescreen in the burned-out world of LA politics and politicians.

The wildfire now raging out of control in the Angeles National Forest from La Canada to Acton, from Sunland-Tujunga to Pasadena is a case in point.

Two weeks ago, the mayor of LA was fuming about how Pat McOsker and his firefighters union had the audacity to send out a mailer that used the heroism of emergency crews in the Metrolink train crash to show how help might be a long time coming because fire stations were being left understaffed due to budget cuts.

Now we find a kid may have drowned because the short-staffed local firehouse was busy elsewhere and we see, not surprisingly, that fire crews are invaluable, especially in the heart of fire season.

It took the mayor five days after the Station Fire broke out to lift his furlough order for firefighters. By then, two firefighters were dead and 105,000 acres, 18 homes charred, smoked choked the LA Basin and there was no end in sight.

The public sector isn't alone in letting us down when it counts.

TV stations, for the first time in memory, didn't go live day and night with coverage of the fire in no small part because their news budgets have been slashed as revenue and market share have fallen sharply. The lack of non-stop video.coverage was in marked contrast with the 24/7 coverage of the Michael Jackson and Ted Kennedy deaths.

Instead of questioning whether the response in the early hours of the blaze was sufficient, County Supervisor Mike Antonovich got all fired up about how the TV stations had failed to meet their responsibilities.

"There were a large number of evacuations taking place, people and animals were in danger, and people had no information of where to go," Antonovich told Greg Braxton in the Times.. "I'm upset. The media let people down during a horrendous fire, one of the worst in the county's history."

You can feel for Antonovich. The fire is in his district and such events always afford local politicians the opportunity  to don their emergency gear and pose before the TV cameras as they hold forth eloquently about their concern for the lives and property of their constituents and the public's debt to the employees whose services they pay for.

Today, LACERS board members who oversee the LA civilian employees pension fund are hearing about how the sweetened early retirement deal the mayor and City Council cut with the unions is a financial disaster.

City Attorney Carmen Trutanich's office has lectured the board about its fiduciary responsibilities, warning them against any "direct or indirect" contact with city officials who might try to influence their decision.

"A retirement board's duty to its participants and beneficiaries shall take precedence over any other duty," an Assistant City Attorney wrote, putting that sentence in italics for emphasis.

Sally Choi and her LACERS staff have refused to back down on their insistence the cost of letting 2,400 workers retire at full 75 percent pensions as young as age 50 must be repaid within five years. Allowing payback over 15 years as the unions and our elected officials want would be reckless and irresponsible, they said, especially since billions of dollars in benefits are already unfunded and the city's financial position is so dire it may take many years to recover.

At the same times, the Metropolitan Water District, which just raised its charges by 20 percent -- the main reason LA water rates are soaring -- has cut a deal to increase pensions by 25 percent despite the half-billion-dollar unfunded liability it already faces. When the Orange County Register questioned the deal, the Met spent freely to bring in a public relations firm to obfuscate the issue.

It's all so bizarre, a theater of the absurdity of politics today.

Is it just me or do you too sense that our government agencies are spinning out of control in the face of falling revenue, that our officials panicked and paralyzed by the end of the free-spending era when pandering to special interests could keep them in power and privilege indefinitely and the people too disengaged to notice they were being ripped off for their money even as policies were making the quality of their lives and their economic opportunities worse?

Sally Choi put her job on the line Tuesday even in the face of threats and intimidation from City Council members who knew very well that their actions violate both civil and criminal law.

The videos below contain evidence that can be -- and hopefully will -- be used against them in  courts of law.

Councilman Bernard Parks, a solitary figure who actually knows what is in the city's deficit budget and has tried to do something about it, made that perfectly clear in his questions and comments to Choi, general manager of LACERS, the city's largest pension fund which is underfunded by a staggering $4 billion -- nearly a year's general fund spending.

Good cop that he is, Parks warned his fellow Council members they were treading into the danger zone by trying to pressure Choi and the LACERS board to violate their fiduciary duty to protect the pension fund's assets for the benefit of current and retired city workers. He even went so far as to warn his colleagues against "lobbying" the board, by which he meant using the back room coercive techniques that are so much a part of the City Hall culture.

Already, the poor stepchild of City Hall unions, the Engineers and Architects Association, has put the city on notice it will sue to block the disastrous sweetheart deal to handsomely reward some 2,400 employees with an early retirement package that will let them go out to pasture in their early 50s with $15,000 in cash and up to 75 percent of their salaries in pensions  and lifetime health care.

This Early Retirement Incentive Program (ERIP) requires city employees to contribute .75 percent more to LACERS, raising their contribution level to a modest 6.75 percent. But that is far from sufficient to cover the $250 million cost of the ERIP without sticking taxpayers -- already facing bills for billions of dollars to keep the fund solvent -- with making up the difference.

Because the Engineers union, under attack from the SEIU and its allies like the mayor, can see that the ERIP will only make the city's financial crisis so much worse and threaten the future of its members, it has threatened to sue to block the deal.

It has a good case. The city cannot legally make workers pay more for their pensions without their consent or at least giving them equal value for their extra contributions. The ERIP increase in contributions only benefits those who get to retire with the sweetheart deal, not those who will pay more for the rest of their careers.

Here's what the union's lawyer told the city in a recent letter (eaapension.pdf):

"Because adoption of an ERIP now will have huge and long-lasting economic effects on the City employees who remain employed after the ERIP has been implemented, a failure to afford the affected employees and the residents of the City of Los Angeles an adequate opportunity to review and analyze the actuarial report is both inconsistent with the City's obligation to bargain in good faith and with good governance.

"Should the City embark on such an ill-advised course, EAA will not only seek
appropriate legal redress, but it will also undertake to publicize the City's failure to afford the
residents and voters of the City a meaningful opportunity to participate in a financial decisionith such a significant, long-term impact on the City's fiscal health and the City's ability to hire and retain competent employees."

So here we are in the second month of a new fiscal year with roughly the same giant hole in the city budget that was forecast six months ago and the only plan our elected leaders have come up with is blowing up.

They knew all that was wrong with it from day one. But they didn't care. They knew the media wouldn't pay any attention. They knew they could keep the public in the dark. They counted on ramrodding it through and trampling all opposition.

But a funny thing happened on the way to making the city's financial position untenable. People like Sally Choi stood up to them. And Bob Aquino of the Engineers union.

And now you know too what they have done and are trying to do. What are you going to do about it?

In an extraordinary session two months too late, the City Council was thrown into turmoil Tuesday by facing the facts of the real costs of the sweetheart early retirement deal it offered to city unions.

It took Sally Choi, general manager of the largest city pension fund LACERS, to courageously lift the veil of ignorance and incompetence from the Council members with only Bernard Parks showing the intelligence and common sense to see the deal is a financial catastrophe for the city.

Armed with actuarial information form Segal consulting, Choi faced repeated attacks from Council members who leaned heavily on her to consider the impact on the general fund of her recommendation that the estimated $250 million cost to the pension fund of giving 2,400 employees five years extra credit in their pensions (12.5 percent more) be paid back within five years.

She noted five years is the recommended payback period for early retirement incentives and that the council offer of raising employee contributions by .75 percent to 6.75 percent was inadequate to  provide full cost recovery as the council has claimed.

The increase in employee pension contributions won't take effect for two years and the gap that the city faces paying out of the general fund is about $150 million plus $43 million for cash payments to early retirees. That doesn't count the $4 billion the city must pay to keep LACERS -- one of three troubled city pension funds -- solvent because of investment losses in the economic downturn.

Parks pointedly noted that coercion of the pension fund, its board or managers could be illegal and tried to distance himself from the pressure put on Choi.

At the end of the session, union leaders insisted the Council live up to the terms of the deal but got no firm commitment. It will be fascinating to watch the mayor and Council regroup and try to get around the problem they created with their imprudent offer to the unions -- a deal they originally said was unaffordable.

UPDATE: The LACERS pension board delayed a vote today on the city's planned early retirement program as union leaders stepped up their campaign to derail a controversial proposal for making the city pay off the program's cost 10 years sooner than expected, the TImes reports. LACERS will convene a three-member panel to discuss the payment timeline for the early retirement initiative.

Publicly and privately, the mayor was saying not so long ago that the sweetened early retirement deal city unions wanted was unaffordable.

For once, he was right. Too bad, he lacked the courage of his convictions.

Even as the pay-to-play corruption of public policy reaches new heights, City Hall has stepped up its reliance on a play now, pay later philosophy of fiscal mismanagement.

For years, City Hall has carried forward a structural deficit -- it was committed to spending more money each year than it actually was expecting to take in -- so it begged, borrowed and stole a couple of hundred million dollars to cover its overspending. For most of two years now since the economy started to slide, it has stepped up its borrowing against the future while displaying its lack of political will in its inability to make substantive cuts and focus on basic services.

Facing a $530 million deficit going into this fiscal year -- and now a $200 million additional hit thanks to the gross dysfunction of the state government -- LA's elected leadership has chosen to juggle the books, reward 2,400 or so senior city workers with a lucrative buyout/pension deal and mortgage the city's future for years to come in a way that escalates the level of risk from high to catastrophic.

Even in the bureaucratic language of Sally Choi, head of LACERS, the underfunded pension fund that covers most city workers, the strategy of "smoothing" repayment of the cost of the early retirement package is not "fiscally prudent."

Go to OurLA.org -- the new community-based news and information site -- to read the who's who of City Hall's $100,000 Pension Club.

Today's exclusive report provides the names of the retired LAPD and Fire Department employees who are getting six-figure pensions under contracts that pay up to 90 percent of their highest salaries.

You can read who they are -- all 286 of them -- at OurLA.org. Coming Tuesday is the list of $100,000 Pension Club members who draw their monthly checks from LACERS, the pension fund for elected officials and most city employees.