Hundreds of city workers protest bank deals at L.A. City Hall
Hundreds of city workers and their allies packed the streets and sidewalks outside Los Angeles City Hall on Tuesday morning, protesting “predatory fees” the city pays to Wall Street banks.
The Fix LA Coalition, which includes labor unions, clergy and community groups, argued that the city must renegotiate two deals signed with banks in order to restore funding for tree trimming, sidewalk repairs and other badly needed services. After a morning rally outside a downtown bank, dozens of city trash trucks slowly ringed City Hall, blaring their horns, as workers clanked cowbells and chanted, “Fix LA!”
Tuesday’s protests came as labor contracts for tens of thousands of city workers expired, negotiations on new contracts continued and city budget officials, citing continued financial woes, are recommending no pay increases. Labor leaders say they are “bargaining to fix L.A.” and restore jobs and services that the city needs by targeting the bank fees and other costs.
“Our community has been devastated by austerity,” said Marvel Hunter, a city tire repairman who is on a union bargaining team. The money paid in the bond deals “can be used to repair our streets and clean up our neighborhoods.”
The protests stem in part from two financial deals that the city entered into before the economic crash. Eight years ago, the city entered into an interest-rate swap deal with Bank of New York Mellon and Dexia, a Franco-Belgian institution, for its Wastewater System Revenue Bond issued in 1988. The rate swap was designed to take advantage of what were at the time historically low interest rates.
But rates dropped even lower when the economy crashed. That left the city paying more than the market rate, while the banks paid variable rates that were kept low by the Federal Reserve.
A City Council committee moved Monday to get out of the contracts, saying the deals had soured after the crash. City Councilman Paul Koretz, who introduced the motion, said Monday that renegotiating the contracts was in the “moral, ethical and operational interest of our city.”
Workers and labor representatives took aim at the deals during public testimony at Tuesday’s City Council meeting, presenting a petition seeking a public inquiry into bank deals and fees.
“I don’t think it’s right that we’re giving away $300 million to Wall Street while I don’t have a children’s librarian for seven months,” said Henry Gambill, vice president of the librarians’ guild, to a roar of applause in the council chamber.
However, city finance officials have reported the deals are saving some money, if not as much as the city had expected. The swap has saved $21.7 million so far and will save an additional $22.9 million by 2028, they said. Terminating the deals would cost the city more than $25 million in fees, which “doesn’t make financial sense,” the city’s chief of debt management, Natalie Brill, said Monday.
The protesters also took aim at the city Tuesday for failing to enforce penalties against owners of foreclosed homes who fail to live up to city codes, leaving funds for the city uncollected. The coalition also contends that the city could “close property tax loopholes” to recoup revenue.
Labor unions are drawing attention to potentially untapped funds as the city looks to them for concessions: The budget approved by Mayor Eric Garcetti and the City Council earlier this year assumed that workers would get no salary increases and that civilian employees would pay 10% of the cost of their healthcare premiums. The Coalition of LA City Unions, which includes unions representing tree trimmers, trash truck drivers, librarians and other civilian employees, has been skeptical that such measures are needed.
Both unions and city officials say bargaining is still in its early stages, despite the expiration of the existing contract this week. Garcetti said Monday that negotiations with the Coalition of LA City Unions were “just at their starting point.”
Meanwhile, the use of city trucks in the Tuesday protest raised concerns for some city officials. Bureau of Sanitation director Enrique Zaldivar said that “such use of city equipment is not permitted,” and that “drivers were told to return to their routes once we realized what was going on.” Any disciplinary action would be up to each of their supervisors, Zaldivar said.
Asked about employees using city trucks during the protest, the Coalition of LA City Unions issued a statement from its chair Cheryl Parisi saying: “Sanitation workers took great care and pride in making sure that everyone’s trash was picked up today – just like every other day.”
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