PERSPECTIVE-The Police Protective League announced that a majority of the 9,900 LAPD officers it represents rejected a contract extension. The extension would have denied most officers a raise, but would have considerably increased the budget to pay officers for overtime rather than defer it.
The deferral of overtime was a bad idea to begin with. It only backloaded a greater burden upon officers’ retirements. But that’s besides the point.
The objective of the city is to hold down raises in order to minimize the cost of retirement benefits.
Retirement costs for fire and police have shot up from $175 million in 2005 to $626 million currently (a straight 29% per year over the base period), and will continue to grow. The Los Angeles Times reported the annual cost will reach $710 million in two years.
The contract rejection came on top of a challenge to the 2012 City Council decision to offer lower benefits to new civilian employees. The Employee Relations Board will now have to deliberate over whether the new tier violated labor laws.
The cost of civilian retirement cost have grown from $260 million in 2005 to $410 million, a 6% per year annual increase over the base year.
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In the aggregate, combined retirement costs have grown by 15% per year since 2005.
We simply cannot afford to maintain that pace.
If employees want to maintain gold-plated benefits, they must contribute more.
The alternative is a reduction in services. Everyone loses in that scenario.
It is highly likely the rate of increase will get worse. People are living longer and will require more care.
The city is in a race to the bottom. How long before the residents and businesses wake up and realize they will increasingly pay more for less?
(Paul Hatfield is a CPA and former NC Valley Village board member and treasurer. He blogs at Village to Village and contributes to CityWatch. He can be reached at: [email protected])
–cw
CityWatch
Vol 12 Issue 57
Pub: Jul 15, 2014