In an effort to close the city’s $208-million budget shortfall, the proposal would be in addition to 1,000 job cuts already threatened.
By David Zahniser and Maeve Reston

January 30, 2010

Faced with a shortfall now reaching $208 million, the top budget official at Los Angeles City Hall said Friday that he is preparing a list of 500 jobs to be cut from the payroll — on top of the 1,000 already threatened with elimination.

Those reductions, if approved by the City Council over the next several weeks, would bring city government personnel cuts to 3,900 this year. Mayor Antonio Villaraigosa and the council have already agreed to let 2,400 employees retire with full benefits up to five years early.

In a lengthy memo on the budget crisis, City Administrative Officer Miguel Santana called for the layoff process to begin immediately, saying public coffers could save $65 million annually by having 1,000 fewer workers.

“There is a financial and human cost for each day of delay,” he wrote to Villaraigosa and council members. “The daily cost of postponing 1,000 layoffs is approximately $338,000, which equals four more positions that need to be eliminated to generate the targeted savings.”

The council is scheduled to meet Wednesday to discuss the plan for cutting 1,000 jobs from the city’s general fund, which delivers basic services such as public safety, parks and libraries.

For weeks, several city officials have expressed fears — both publicly and privately — about the possibility of municipal bankruptcy. City Controller Wendy Greuel warned earlier this week that a decision to balance the budget by tapping too much of the city’s emergency reserve fund could make it more expensive for Los Angeles to borrow money. That in turn would threaten the city’s ability to pay its bills.

Furthermore, once this year’s budget gap is addressed, Villaraigosa and the council must eliminate a projected $484-million shortfall for the fiscal year that starts July 1.

Villaraigosa and some council members said they are still hoping to pursue alternatives to layoffs. Hours before Santana released his report, the mayor said the city’s employee unions could address much of this year’s budget gap if they agreed to additional concessions such as pay cuts. He also suggested that employees contribute more toward their retirement.

“If we work through this together, I think we can minimize layoffs,” he said.

Councilwoman Janice Hahn said she would support shifting workers out of the cash-strapped general fund and into vacant posts at Los Angeles World Airports and the Port of Los Angeles, which operate independently on revenues from airlines and shipping companies. Hahn said she would back efforts to eliminate positions as long as those workers “could still get a paycheck from the city.”

Barbara Maynard, who represents the Coalition of L.A. City Unions, said the city should offer early retirement to 400 additional workers and move 600 others to vacant positions not affected by the budget crisis.

“All of those measures should be exhausted before looking at other cuts,” she said.

Santana said the members of the coalition, which represents 22,000 employees, cannot be laid off between now and June 30 unless they agree to such a move. Layoffs can be imposed, however, on the Engineers and Architects Assn., which has more than 6,000 members, because such protections do not exist in that union’s contract, he said. Those who are targeted with layoffs would probably secure the first opportunity to fill any vacant positions, Santana added.

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