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30
Jan 2010
Grim choices for cash-strapped L.A.

Los Angeles will need to lay off at least 1,000 employees, shut down three departments and make other changes if it is going to survive this year, the city's top analyst said Friday.

In a grim assessment to Mayor Antonio Villaraigosa and City Council members, City Administrative Officer Miguel Santana warned that the city is facing a budget crisis unlike any it has ever experienced.

"The recession which began in 2008 caused deeper revenue declines than any post-World War II recession," Santana said. "The recession was much deeper than anticipated in the budget and has greatly affected the majority of the city's revenue categories."

Santana said the city has seen declines in nearly all areas and needs to find $208.6 million in savings by July 1.

Santana recommended the city take steps to eliminate the three agencies making up the Department of Human Services - the Human Relations Commission, Commission on the Status of Women, and the Children, Youth and Families Commission.

The proposal would also eliminate the departments of Disability and Environmental Affairs, and cancel the Fire Department's next recruit class.

But many of the proposals also involve transfers of money between departments and aim to protect some of the most popular programs, such as parks and libraries. Mayor Antonio Villaraigosa also plans to protect funding for the Police and Fire departments.

Santana said he has already taken steps to open negotiations with city unions, accelerate the early retirement program and downsize city government with the layoffs.

He said the city also needs to pursue public-private partnerships.

Villaraigosa said the report is a roadmap for decisions that will have to be made soon, as he hopes city employees are willing to step up and take cuts in their pay this year to avoid layoffs.

"No one believed last year that the unions would be willing to forgo all they did," Villaraigosa said. "Yet they stepped up and agreed to participate.

"This year, we can avoid layoffs if they will step forward and take a little cut and agree to an increase in the pension contributions," Villaraigosa said.

Councilman Bernard Parks, who chairs the Budget and Finance Committee, said the report "provides a very graphic picture of our financial situation. What we need to address is how this will affect the services the city does," Parks said.

The councilman said part of the problem is the time it took to get the voluntary Early Retirement Incentive Program in place.

"We went six months without any salary savings," Parks said. "Now we need to make that up."

Villaraigosa said he will fight any reductions is police and fire.

"I am proud this is the second-safest big city in America and we have to make it our No. 1 responsibility," Villaraigosa said. "They are our priority. It doesn't mean libraries aren't important. That parks aren't important. That street services isn't important. We just think public safety is No. 1."

City Attorney Carmen Trutanich said he has not had a chance to review the budget proposal, but he would fight to keep the 100 staff members suggested for elimination.

"I keep hearing that they want to protect the core services, and what's more of a core service than defending the city in lawsuits, in keeping gang members off the streets?" Trutanich asked. "That's what this office is doing.

Cuts have been proposed in the past for the City Attorney's Office, and City Council members have overruled those reductions.

Trutanich later sent a five-page letter to Santana outlining the steps he has taken and insisting his department cannot afford the deep cuts suggested by Santana in earlier proposals.

He said his department is working to save money by training in-house lawyers on more complex issues, rather than hiring outside law firms.

Council President Eric Garcetti said the council is committed to working with the mayor, unions and other city leaders to close the budget gap.

"Our goal will be to protect core services and maintain our city's financial health, and failure is not an option," Garcetti said.

A related problem is the number of jobs that have been created with federal money.

Parks said he believes the city is not considering the costs to administer the federal grants.

"Here we are told we are receiving $500 million, but we aren't calculating the cost to the general fund," Parks said. "It's nice to say we are getting all this money, but we have a $200 million hole we need to fill."

Councilman Richard Alarc n complained that Los Angeles is not getting its fair share of the funds or creating enough jobs compared to cities like New York, which has received more than $5 billion and created 27,000 jobs, or San Francisco, which has received $323 million and created 422 jobs.

Los Angeles has created 338 full-time jobs and 869 temporary summer jobs.

"I want to know what they're doing with their money that makes them so much more effective," Alarc n said.

City officials said they would review the differences but believe much of the discrepancy is due to how each city calculates its money.

The Budget and Finance Committee is expected to consider the report Monday and then make recommendations to the full council.

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