“This is quite a day and quite a time,” said Los Angeles Mayor Eric Garcetti at the beginning of his news conference on Wednesday.
Earlier in the afternoon, the L.A. City Council voted to declare a fiscal emergency and approved plans to furlough more than 15,000 city employees. It also voted to carry out early retirement buyouts for another 1,280 employees to try to recoup as much anticipated lost revenue as possible due to the COVID-19 pandemic.
Each pay period’s furloughs of city employees represents a savings of $5.79 million, or $104.2 million in fiscal year 2020-2021, according to city documents. The council may still have to find additional savings.
The furloughs, which equate to about 10% of an employee’s annual salary, are set to begin Oct. 11.
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City Council members said without implementing the furloughs, they would have to consider laying off employees.
Asked if he would be furloughed Garcetti said, “The furloughs apply to us as well as all city employees. That effects us directly as civilian employees, including those who work in our office. So, yes.”
Garcetti also said he gave up 2 months salary earlier in the year at the beginning of the pandemic.
“I absolutely believe that we have to lead by example and we can’t ask more from folks than we’re willing to do ourselves,” said the mayor. He noted that this will be “the same as we did in 2009.”
But unlike 2009, “This will be the toughest budget year we have ever faced,” he said.
Revenues for the 2021 fiscal year are currently difficult to forecast due to the pandemic, with the City Administrative Officer’s staff reporting they could come in anywhere between $45 million to $409 million below the estimate of $6.68 billion.
City Administrative Officer Richard Llewellyn estimated that Los Angeles has already lost more than $50 million, while noting that revenue projections were based on the economy reopening more fully by July than has occurred.
“We know now … that the best-case scenario ain’t gonna happen,” said Councilman Paul Krekorian, who chairs the council’s Budget and Finance Committee. “So that means … even after we enact furloughs, we’re still going to have a shortfall in revenues that’s going to have to be accommodated.”
Although Los Angeles is set to receive about $694 million in federal Coronavirus Aid, Relief and Economic Security Act funds, that money cannot be used to replenish lost revenues, only to respond to the pandemic.
For the early retirement program, the city set a minimum 1,300 participation number, but the council voted to get rid of that requirement as the number of those volunteering to retire came up just short. City staff estimates the buyouts could save the Los Angeles an additional $13 million.
“We can’t sit and hope that Washington will ride to the rescue,” Krekorian said. “We can’t hope that we can reopen negotiations with labor, and within a month, get a solution that is going to save hundreds of millions of dollars. It’s unrealistic and we have to do the realistic thing of acting on these furloughs so that we don’t have to act on worse-(case) scenarios in a few months, because I can guarantee you that if we don’t, we will be faced with choices that are much harder.”
In an opinion piece published Wednesday in the Los Angeles Times, Councilman Mike Bonin laid out a proposal for the council to defer raises and bonuses for the Los Angeles Police Department’s union members.
LA is declaring a fiscal emergency and Angelenos are going to be feeling a lot of pain — and our police union’s insistence on more money for raises is largely responsible. Read how and why in my Op-Ed published this AM by the LA Times: https://t.co/aqQRJflWdL
— Mike Bonin (@mikebonin) September 2, 2020
“These police union raises are forcing budget cuts that will make Los Angeles less healthy, less secure and considerably less safe,” Bonin said. “Los Angeles cannot adequately protect, serve, or provide for its residents with these cuts and furloughs.”
According to Bonin, members of the police union are getting a 4.8 percent raise, plus $41 million in new educational bonuses, totaling about $123 million this fiscal year. LAPD officers will get an additional raise in 2022. Meanwhile, cuts to the salaries of other city employees through furloughs will “sharply reduce city services, including public safety programs,” he said.
Llewellyn said any adjustments to the early retirement program or the furloughs would have to be renegotiated with the city’s labor union — something that Los Angeles doesn’t have time to do amid looming budget deadlines, but he said further discussions could take place with certain departments on how to find additional savings.
“Our labor partners came to us and said, ‘We think we should look at a separation plan as sort of a long-term structural assistance with the choppy waters we were heading into potentially for several years,’” Llewellyn said. “Nobody likes furloughs and nobody likes separation plans, nobody likes service cuts, but the separation plan seems to be a reasonable way to proceed.”
Bonin’s deferral motion failed to get support, and he also failed to convince his colleagues to exempt Emergency Management Department employees from furloughs.
You can watch Mayor Garcetti’s news conference here.
City News Service contributed to this report.