Early retirement decision delayed

After a seven-hour closed-door debate over how to resolve a $405-million budget gap, the Los Angeles City Council put off a decision Tuesday on a controversial worker retirement plan, hoping to work overnight with employee unions to find new cost-cutting measures.

Mayor Antonio Villaraigosa promised to veto any decision that preserved the costly plan to allow 2,400 city employees to retire up to five years early with full benefits.

Even that threat failed to break the logjam.

“Obviously, we don’t have sufficient votes one way or the other,” said Councilman Richard Alarcon, who represents the northeast San Fernando Valley.

Council members scrapped plans for attending an out-of-town conference today, opting instead to reconvene this morning in case officials reach a new accord with the Coalition of L.A. City Unions, which has been trying to win passage of early retirement for months.

The coalition has threatened to sue to force adoption of the plan and vowed to use both legal and procedural methods to block an alternative proposal that would impose 26 days of furloughs on all city workers and eliminate 926 positions.


“We will treat every layoff as an international incident,” said Victor Gordo, secretary-treasurer for Laborers’ International Union of North America Local 777.

When Tuesday’s marathon budget session began, it appeared as though labor leaders might have the votes to win passage of the plan, which the mayor helped negotiate three months ago, before city financial analysts warned that it would “devastate” public services. Partway through the meeting, however, Villaraigosa informed the council that he would veto any decision to approve early retirement. That complicated the political calculus for the decision.

The council would need to muster 12 votes to override a mayoral veto. But before that could take place, the council would need to cast a second vote on early retirement, a vote that under city pension rules cannot occur until mid-October. That means that if the council chose to battle Villaraigosa over the plan, it would run the risk of postponing a solution at a time when the city is overspending at a rate of $1 million a day.

Two councilmen, Bernard C. Parks and Greig Smith, have already come out against early retirement. Because one seat is vacant, all the other members on the 15-seat council would need to support early retirement to override the mayor’s veto.

The decision carries major risks for the city’s politicians. At least five council members are considering a run for mayor in 2013 and would seek support from the city’s politically potent public employee unions, and others have won their seats with major support from organized labor.

Early retirement originally was viewed as a way to help the city balance its books by shaving $200 million a year off its payroll. But last week City Administrative Officer Miguel Santana, the city’s top financial advisor, began urging officials to reject the plan on the grounds that it would cost too much and force the council to make considerably deeper cuts to public safety.

One actuarial study found that over a 15-year period, the plan would siphon as much as $198 million away from the general fund, which pays for services such as police and fire protection. Santana also warned that early retirement would save only $12 million in this budget year.

Union officials had a profoundly different view, saying early retirement would save $1.2 billion over five years.

During Tuesday’s earlier public session, several employees warned that a move to abandon early retirement -- and embrace layoffs -- would throw hundreds of families into economic chaos.

Although Santana said last week that 926 workers would be targeted for layoffs, backup documents that accompanied his report showed that the number could be considerably less. Of the 926 positions, 149 employees have already agreed to leave voluntarily and 177 more are expected to do the same by the end of the fiscal year.

Coalition leaders said they had identified more than $60 million in savings at the last minute that could be used to salvage early retirement. Council President Eric Garcetti said that some components of the plan might work but that more savings are needed.

“There are things that are definitely solid” in the latest plan from the unions, he said. “And then there are things that anybody analyzing [them] would be hard-pressed to say for sure are going to come true.”