Other Highlights
FOR IMMEDIATE RELEASE Matt Szabo
June 26, 2009 (213) 978-0741
CITY, UNION LEADERS COME TOGETHER TO SAVE JOBS AND
PRESERVE SERVICES
Landmark agreement will save $500 million over two years without layoffs
through early retirements and raise deferrals
LOS ANGELES - Mayor Antonio Villaraigosa, City Councilmembers,
representatives from the Coalition of City Unions and City workers today
announced a landmark agreement to save $500 million over two years without
layoffs or major service reductions.
“This agreement allows us to balance the budget without layoffs and furloughs
that hurt workers and cut services at a moment when our families need them
most,” Mayor Villaraigosa said.
“This plan keeps us on the right track toward fiscal good health in very trying
times. In the face of the worst economic crisis since the great Depression, we
significantly cut costs and preserved core services, from police and fire to our
libraries and parks,” said Council President Garcetti. “It is a credit to the city and
the union leadership that we have been able to come together to minimize layoffs
and furloughs and prevent drastic reductions in vital city services.”
“We have seen the damaging effects of layoffs and furloughs in communities
across the Country, and we were determined to find a better way for L.A.,” said
Cheryl Parisi, Chair of the Coalition and Executive Director of AFSCME District
Council 36. “This is a big City solution, a partnership agreement between workers
and City officials thinking big and thinking long term for the people of Los
Angeles.”
The agreement approved today by City Council – and now pending ratification by
City workers – will save the City more than $500 million over the next two years,
primarily through a retirement incentive program and a delay in scheduled pay
raises. Workers will cover the net cost of the early retirements, ensuring the
program will not burden the pension system.
A study by the Economic Roundtable estimated that a retirement program would
provide a benefit to the local economy of between $90 million and $140 million
per year, compared to equivalent cuts through layoffs or furloughs.
“This is a responsible plan,” said Homer Post, a Recreation Director in the
Department of Recreation and Parks. “It will require sacrifice, but the bottom line
is that we can continue services like the summer programs in rec centers, parks,
and libraries that help children grow and keep them off the streets.”
“Our goal all along was to keep people working and serving the residents of Los
Angeles,” said Bob Schoonover, Heavy Duty Equipment Mechanic and President
of SEIU Local 721. “This challenge to us has always been about more than our
jobs and paychecks – it’s about the City we love and serve. And this agreement
keeps the City running, but also makes us part of the engine for economic
recovery rather than part of the problem.”
A summary of key provisions of the deal follows.
Summary of Key Provisions
There are two agreements: a Coalition-specific agreement amending the MOUs
of Coalition units and a retirement incentive program negotiated across all civilian
units citywide.
Agreement on Layoffs and Furloughs
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.
Deferral of Wage Adjustments
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.
By 2014, wages will reach the levels originally set in the contract for 2012 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.
Early Retirement Incentive Program
An early retirement incentive program will be implemented, extending incentives
to those already eligible to retire and to those within five years of retirement. The
goal of the program will be to encourage 2,400 workers to retire out of City
service, lowering payroll costs by nearly $200 million. Workers will increase their
contribution to the pension system to cover the net cost of the early retirement
incentive program.
An actuarial study is underway to determine the exact cost to be covered by
workers. The program can be adopted and implemented after the public review
of the actuarial study. A series of actuarial studies on similar scenarios have
been carried out over the past year, on which the final plan has been based.
# # #
June 26, 2009 (213) 978-0741
CITY, UNION LEADERS COME TOGETHER TO SAVE JOBS AND
PRESERVE SERVICES
Landmark agreement will save $500 million over two years without layoffs
through early retirements and raise deferrals
LOS ANGELES - Mayor Antonio Villaraigosa, City Councilmembers,
representatives from the Coalition of City Unions and City workers today
announced a landmark agreement to save $500 million over two years without
layoffs or major service reductions.
“This agreement allows us to balance the budget without layoffs and furloughs
that hurt workers and cut services at a moment when our families need them
most,” Mayor Villaraigosa said.
“This plan keeps us on the right track toward fiscal good health in very trying
times. In the face of the worst economic crisis since the great Depression, we
significantly cut costs and preserved core services, from police and fire to our
libraries and parks,” said Council President Garcetti. “It is a credit to the city and
the union leadership that we have been able to come together to minimize layoffs
and furloughs and prevent drastic reductions in vital city services.”
“We have seen the damaging effects of layoffs and furloughs in communities
across the Country, and we were determined to find a better way for L.A.,” said
Cheryl Parisi, Chair of the Coalition and Executive Director of AFSCME District
Council 36. “This is a big City solution, a partnership agreement between workers
and City officials thinking big and thinking long term for the people of Los
Angeles.”
The agreement approved today by City Council – and now pending ratification by
City workers – will save the City more than $500 million over the next two years,
primarily through a retirement incentive program and a delay in scheduled pay
raises. Workers will cover the net cost of the early retirements, ensuring the
program will not burden the pension system.
A study by the Economic Roundtable estimated that a retirement program would
provide a benefit to the local economy of between $90 million and $140 million
per year, compared to equivalent cuts through layoffs or furloughs.
“This is a responsible plan,” said Homer Post, a Recreation Director in the
Department of Recreation and Parks. “It will require sacrifice, but the bottom line
is that we can continue services like the summer programs in rec centers, parks,
and libraries that help children grow and keep them off the streets.”
“Our goal all along was to keep people working and serving the residents of Los
Angeles,” said Bob Schoonover, Heavy Duty Equipment Mechanic and President
of SEIU Local 721. “This challenge to us has always been about more than our
jobs and paychecks – it’s about the City we love and serve. And this agreement
keeps the City running, but also makes us part of the engine for economic
recovery rather than part of the problem.”
A summary of key provisions of the deal follows.
Summary of Key Provisions
There are two agreements: a Coalition-specific agreement amending the MOUs
of Coalition units and a retirement incentive program negotiated across all civilian
units citywide.
Agreement on Layoffs and Furloughs
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.
Deferral of Wage Adjustments
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.
By 2014, wages will reach the levels originally set in the contract for 2012 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.
Early Retirement Incentive Program
An early retirement incentive program will be implemented, extending incentives
to those already eligible to retire and to those within five years of retirement. The
goal of the program will be to encourage 2,400 workers to retire out of City
service, lowering payroll costs by nearly $200 million. Workers will increase their
contribution to the pension system to cover the net cost of the early retirement
incentive program.
An actuarial study is underway to determine the exact cost to be covered by
workers. The program can be adopted and implemented after the public review
of the actuarial study. A series of actuarial studies on similar scenarios have
been carried out over the past year, on which the final plan has been based.
# # #