L.A. City Council orders 3,000 more job cuts

Under the threat of a credit rating downgrade, the Los Angeles City Council on Thursday instructed agency heads to eliminate 3,000 additional city jobs before July 1 “by any means necessary, including layoffs.”

The reduction -- aimed in part at wresting further concessions from the city’s labor unions -- would be on top of 1,000 job cuts already in the works.

The council vote comes a day after Moody’s Investment Services, one of the nation’s top financial credit rating agencies, issued a negative outlook for Los Angeles because of the city’s struggles to close a $212-million deficit. It also comes a week after Mayor Antonio Villaraigosa had sought an additional 1,200 to 2,000 job cuts -- or wage reductions for city workers.

The council’s 9-3 decision came after members met in closed session for several hours with City Administrative Officer Miguel Santana, who warned that tax revenue has continued to deteriorate. Unless the city finds more revenue or cuts costs, the budget shortfall is expected to increase to $485 million in 2010-11.

Under the measure approved by the council, police officers and firefighters would not be exempt from possible job cuts. Council President Eric Garcetti noted that for a number of council members, continuing to hire officers while laying off other city workers was “a big pill to swallow.”

After the vote, the mayor’s chief of staff, Jeff Carr, praised the council’s swift action but said Villaraigosa would oppose any effort to cut police officers or allow deeper cuts among firefighters. The two agencies account for roughly 70% of the city’s discretionary budget.

Councilman Greig Smith said any proposed cuts of police or fire would be carefully scrutinized. He urged members to take quick action on the job cuts, saying Los Angeles cannot afford the financial paralysis that has consumed state government, which has battled deficits for years.

“You can sit here all you want and pontificate and argue and say we should not be doing any of this, but the longer you delay . . . the more people you’re going to lay off,” Smith said. “You can’t walk away from this by just saying it’s going to fix itself. That’s the thinking Sacramento had.”

The council’s motion faced strong objections from several members, including Richard Alarcon, Paul Koretz and Paul Krekorian. Koretz said the 4,000 number had been “plucked out of the air” with no analysis.

“I’m still in shock,” said Koretz, who pointed out that the proposed layoffs, when combined with early retirements approved in September, would cause 6,400 employees to leave city government in a single year.

Garcetti said cutting 4,000 positions would generate $260 million next fiscal year, but he emphasized that the council’s action did not mean that 4,000 people would be laid off.

“We will by the actions today have an insurance policy that if nothing else does come through, we have that in place to maintain our fiscal strength,” Garcetti said.

He added, however, that proposals to raise revenue by auctioning off city assets, such as parking garages, by themselves would not close the deficit or address the city’s long-term fiscal health.

The mayor’s chief of staff said Villaraigosa has for two weeks been urging the council to take decisive action, saying job cuts have to be approved quickly to reap any substantial savings in the next fiscal year. The city has no choice but to cut payroll, which accounts for roughly 80% of the general fund budget, either by layoffs or through pay cuts among city workers, Carr said.

Victor Gordo, an attorney for the Coalitions of L.A. City Unions, said his organization’s 22,000 members already have made substantial concessions, including paying more for their pension and healthcare benefits and, for some, taking early retirement. Gordo said the city had yet to provide any study or rationale showing that 4,000 job cuts are necessary.

“There’s no question that this is a real fiscal crisis, but again these are real people, these are real cuts in services,” Gordo said. “We want some real analysis.”

phil.willon@latimes.com

maeve.reston@latimes.com

Times staff writer David Zahniser contributed to this report.