SAVINGS: Move will cut costs, avoid some layoffs, furloughs.
The City Council on Wednesday approved a revised plan to offer 2,400 municipal employees cash bonuses to retire early in an effort to save payroll costs and reduce the need for layoffs and furloughs.
The program was granted preliminary approval two weeks ago but was revised Wednesday to reflect updated cost figures detailed in a new actuarial study.
If the Coalition of City Unions, representing 22,000 employees, votes to ratify the agreement, final council approval is expected by Oct. 30.
"I would recommend strongly that we vote on this and get it done unanimously," said Councilman Bernard Parks, chair of the City Council's Budget and Finance Committee, shortly before the 12-0 vote.
The Early Retirement Incentive Program would offer cash bonuses of $15,000 to $33,000 to workers who agree to retire early. Those with 30 years' experience would also receive up to five years' credit in their pension benefit calculation.
But in an effort to pay for the program with minimal city costs, the pension contributions of current employees would be increased from 6 percent to 7.07 percent, while retired workers would have to make a 1 percent contribution.
The program is intended to help resolve a $405 million shortfall in the city's $7.01 billion budget.
City Administrative Officer Miguel Santana said the new report represented minor changes to reflect the amendments to the proposal approved by the City Council. If given final approval, civilian employees, including those at Los Angeles World Airports and the Port of Los Angeles - but not at the Los Angeles Department of Water and Power - will be eligible to retire with full benefits during a 45-day window in November and December.
Shedding their salaries will help the city, the port and LAWA save a combined total of $175 million starting next fiscal year, officials said.
The Coalition of City Unions agreed to defer $27 million in cost-of-living increases that its members were supposed to have collected in July. They also agreed to an additional $78 million worth of concessions, including deferring or forego certain cash bonuses and holiday pay.
Additionally, the coalition agreed to let the city transfer some of its members to federally funded departments as well as proprietary departments like the ports, LAWA and LADWP, which have their own budgets.
The city is in the midst of negotiations with the Los Angeles Police Protective League and United Firefighters of Los Angeles City in hopes of reducing payroll costs by another $142 million.
The city has declared an impasse in its negotiations with UFLAC as talks continue with the Protective League.
The agreement also protects coalition employees from furloughs and layoffs that still might be needed to reduce spending.
