The Los Angeles City Council approved a wide-ranging salary agreement with its civilian unions Tuesday, resolving a dispute over pensions while setting the stage for thousands of new hires over the next three years.
Under the pact, all but two of the bargaining units in the Coalition of L.A. City Unions would go without raises until summer 2017. Council members, in turn, scuttled a 2012 reduction in pension benefits for new employees, replacing it with a plan that’s more generous than the one imposed three years ago, but still less costly than the one that had been in place for decades.
The council’s 12-0 vote ends a legal challenge from the union coalition over the pension cuts. As part of that legal settlement, council members established a goal of adding 5,000 new workers by summer 2018.
What that hiring goal means for the city’s long-term financial picture is far from clear.
Budget officials say they expect at least 1,000 employees to leave their jobs in each of the next three years, raising the possibility that the vast majority of new hires would simply replace existing workers. More than 40% of the city’s civilian employees will be eligible for retirement by 2018, they say.
Union leaders say they want to restore services to levels that existed before the recession led to the elimination of thousands of jobs.
“The city lost 5,000 positions during the recession,” said Cheryl Parisi, president of the Coalition of L.A. City Unions. “Our goal is that those 5,000 positions get restored.”
Budget officials say the number of civilian city employees dropped to 23,897 this year from 30,065 in 2009, in the midst of the city’s financial crisis. That figure does not include workers at the Department of Water and Power.
Mayor Eric Garcetti has tapped former City Councilwoman Jackie Goldberg, a longtime ally of organized labor, to help craft the plan for restoring services and ramping up hiring. In an interview, Goldberg said “nobody knows” at this point what the new hiring goal will do to the overall size of the workforce.
“We know we will have some net increase, or there won’t be any service restoration. But that’s a budget decision which the mayor and the council have to make,” said Goldberg, who is working as a consultant for Garcetti’s budget team. Unless the mayor and the council approve additional funds in the future, Goldberg added, “all we’ll be doing is replacing retirees.”
City Administrative Officer Miguel Santana has repeatedly stated that the 5,000 hiring target is a goal, not a commitment or an obligation. Like Goldberg, he said city officials cannot predict at this point how much, if at all, the city’s workforce will grow.
Santana contends the overall union pact would provide $16.8 billion in salary and pension savings over 30 years, a higher projection than one he provided last week. Almost half the savings would come from the lack of raises over a three-year period, he said.
A third of that total savings — $5.2 billion — is expected from the creation of a new set of retirement benefits for workers who are hired starting next year. The new retirement plan will replace the council’s 2012 pension measure, which was approved during the city’s financial crisis. That 3-year-old plan had been on track to save $6.9 billion over the same period.
Those changes approved Tuesday include a reworking of the retirement age for new hires. The council voted three years ago to increase the retirement age to 65, up from 60, for new hires with 10 or more years on the job. The latest plan moves that age back to 63. Council members also made compromises on the size of pensions and retirement benefits provided to survivors of city workers.
Pensions have been a major issue at City Hall, with retirement costs consuming a steadily growing share of the budget devoted to basic services, such as police and fire protection.
A second procedural vote to change employee pensions will be required next month. Council members Mitchell Englander, Felipe Fuentes and David Ryu were absent for Tuesday’s vote.
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