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City Council Settles Deal With Unions

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L.A.'s City Council has settled on a deal with city workers' unions that the city hopes will save it $500 million over the next two years, without mass layoffs or noticeable service reductions.

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Mayor Villaraigosa's office issued a press release Friday announcing the deal with the Coalition of City Unions. It said:

The City agrees not to move forward with a furlough plan for Coalition members. The City agrees not to layoff Coalition members, except as a last resort after working with the Coalition to explore every reasonable option...

Coalition members would defer all raises and cost of living adjustments for two years. The contractually set adjustments will go into effect two years after originally scheduled, with the contracts extended from June 30, 2012 to June 30, 2014 with the City saving $342 million in payroll over two years. In exchange for extending the contract two years, workers will receive an additional 1.75% raise in the final year and two cash payments averaging $1,300.

The city also hopes, says the mayor's release, "to encourage 2,400 workers to retire
out of City service, lowering payroll costs by nearly $200 million."

The Daily News reports on the deal, with the additional note that the city will need to borrow $1.1 billion against future tax revenue in order to make it through the year. The News notes that the Chamber of Commerce has some questions about the labor deal:

"I request that the Mayor and City Council provide the public with a five-year economic analysis of the impact that the proposed city labor agreement will have on the city's budget and taxpayers prior to Council consideration," [Chamber Chief Gary] Toebben wrote.

"For taxpayers, the proposed agreement outlined earlier this week does not appear to fulfill the promise of `shared sacrifice' in a difficult economy. Instead, it appears poised to deliver the kind of short-term political gain and long-term financial pain that has contributed to California's fiscal implosion."

Ron Kaye's always feisty local politics blog has followed every step of the City/union negotiations, and see selections of his coverage (going backward in time) here, here, and here. And here is his bitter summation of what it all means, especially the early retirement for 2,400 aspect:


While the rest of the city's population is worrying about how to make ends meet and what happens if someone in the family loses their job or gets sick, our city workers are getting to retire at the youthful age of 55 with full lifetime pensions and health benefits.

The loss of the labor of the 2,400 in this lucky class will mean worse services for those who pay the bills. But for 90 percent of the city workforce who retain their jobs it will be something of a bonanza: Promotions galore, excuses for every failure, deferred raises for two years with iron-clad guarantees that they will be made whole soon enough and get a large cash bonus to boot.....

The city can't afford it. There isn't enough money coming in. They know they can't raise taxes or fees anymore. Even the DWP cash cow can't generate enough to cover payroll costs. This sweetheart deal is nothing but a timebomb -- an improvised explosive device that will inevitably blow up in their faces.

The Coalition of City Unions cheers the deal on its own website.

(Photo by David McNew/Getty Images)

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