LA WATCHDOG-On Friday, Mayor Eric Garcetti, City Council President Herb Wesson, and the politically powerful Los Angeles Police Protective League that represents over 9,900 members of the Los Angeles Police Department announced that they had agreed to a four year contract (July 1, 2014 to June 30, 2018) that will increase salaries by 8.2% by January 2018.
The police will also be entitled to a 5% annual increase in their healthcare subsidy, a $500 increase in their uniform allowance, an optional overtime buy down, and a substantial increase in cash overtime.
While the City Hall political establishment is congratulating itself, the reality is that our City cannot afford this backroom deal.
This deal will increase next year’s budget deficit from $165 million to $176 million while the four year cumulative deficit will balloon from $405 million to over $700 million as a result of the back end loaded nature of the contract.
And the highly touted surplus of $21 million anticipated for the fiscal year 2018-19 that marked the end of the Structural Deficit is obliterated by a compensation related tsunami of more than $120 million, resulting in red ink of over $100 million.
These budget projections are predicated on many optimistic assumptions, including that General Fund revenues grow at a rate exceeding 3% and that the City’s two underfunded pension plans earn 7.5% on their invested assets.
But the key assumption is that there are no increases in salaries for the City’s 20,000 civilian employees over the next three years and that they contribute 10% of the cost of their healthcare plans.
This appears unlikely.
The non-sworn workers have been without a contract since July 1 as the leaders of the Coalition of City Unions are pounding the table, demanding hefty salary increases and refusing to agree to “givebacks” such as contributions to their Cadillac healthcare plans.
While the Coalition leadership will use the new Police contract as ammo in their contentious negotiations with the City, these leaders are unwilling to acknowledge that the incredibly irresponsible 25% increase they received in 2007 from Mayor Villaraigosa and the Garcetti led City Council is more than the 14% increase for the cops during the same timeframe.
Despite the sea of red ink, neither Garcetti nor Wesson have offered any insight as to how to pay for this contract that will eventually cost over $120 million a year.
At the same time, the City is facing additional budget challenges.
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How does the City propose to finance Garcetti’s pet initiatives for the Los Angeles River, Great Streets, IT, Sustainability and Earthquake Resiliency that could reach $100 million?
How does the City propose to pay for the repair and maintenance our lunar cratered streets and broken sidewalks?
Before the City Council and Mayor Garcetti approve this budget busting contract with the campaign funding Police Protective League (“PPL”), City Hall needs to conduct open and transparent hearings on the City’s ability to finance this $120 million annual increase.
City Hall also needs to tell us why pension reform is not being addressed as the Fire and Police Pension Plans are underfunded by over $5 billion.
An integral part of any discussion includes an analysis of all of the campaign contributions by the PPL for the last ten years, including those supporting candidates such as Jose Huizar and Wally Knox or ballot measures such as Proposition A, the permanent half cent increase in our sales tax that was rejection by the voters in 2013.
Angelenos deserve an open and transparent City Hall, especially when it involves the City’s finances, proposed labor contracts, campaign contributions by City unions and possible conflicts of interest, budget reform, and any matters that impact our wallets, including DWP rate increases.
Otherwise, skeptical voters who are sick and tired of City Hall’s budget shenanigans will once again reject any proposed tax increase, even when the political establishment holds our streets and sidewalks hostage.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 21
Pub: Mar 10, 2015
