L.A. council panel deadlocks on how to address mounting deficit

The Los Angeles City Council’s budget panel deadlocked Monday on how to address the city’s mounting deficit, with two council members calling for layoffs of city workers as an alternative to more furloughs.

Split on how to proceed, the Budget and Finance Committee asked City Administrative Officer Miguel Santana for more suggestions for addressing the financial crisis.

Councilmen Greig Smith and Bernard C. Parks called furloughs a temporary solution and said the city should permanently reduce the workforce. But other committee members said they opposed both layoffs and furloughs and want solutions that would be less painful to the public.

Councilman Paul Koretz said city departments could save money by severing contracts with private companies. Councilman Bill Rosendahl asked for a review of every employee who earns more than $200,000 per year.

Asked about the lack of consensus, Santana said: “It’s certainly not good.”

“This is just the beginning,” he said. “These are, frankly, the least difficult of the cuts that the council will have to consider in the next six months.”

The committee’s deliberations took place the same day that Mayor Antonio Villaraigosa urged council members to proceed with plans to lease nine public parking garages to a private company for the next 50 years. And they coincided with the announcement that another city department, the Community Redevelopment Agency, now faces elimination under Gov. Jerry Brown’s proposed budget.

Christine Essel, the agency’s top executive, said Brown was attempting to ax a department with a 60-year track record of worthwhile redevelopment. “Clearly, Gov. Brown is choosing the wrong time to take such drastic steps,” she said in a statement.

The city is expected to face a $350-million shortfall in the fiscal year that starts July 1. The full council is scheduled to discuss budget options Wednesday.

Santana recommended a broad array of reductions last week, including a $10-million cut to the Fire Department and a decrease to the Planning Department that could lead to the elimination of up to 21 employees.

If approved, Santana’s request for furloughs would take effect Jan. 30, leaving some employees with 36 furlough days during the current budget year. That enraged Smith, who said his colleagues should have been willing to cast more difficult votes on the budget last year.

Smith said he favors layoffs and said the steady increase in furlough days had caused the council to treat city workers “like serfs.”

“We’ve got to just make up our mind and have the guts in this council to just do our job, and do whatever it takes to survive as a city,” he said.

Villaraigosa told council members in his letter Monday that he would pursue layoffs himself if the deal to lease the nine garages was abandoned. Santana warned last week that dropping the parking proposal would prompt him to recommend an end to police hiring.

The mayor said in his letter the city can no longer afford to manage parking garages and told council members that they must “accept this economic reality” and stop using taxpayer money to keep hourly rates low. Venice resident David Ewing criticized the garage proposal, telling council members it was part of a nationwide trend in which public facilities are being snapped up by investment banks.

“They’re … picking up assets at bargain basement prices,” he told the panel.

david.zahniser@latimes.com