Northridge Community Council 7-10-03 Update |
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http://www.dailynews.com/Stories/0,1413,200~20954~1469012,00.html
Workers get more pay while L.A. cuts service
By Harrison Sheppard Staff Writer
Most Los Angeles city employees will get raises of at least 5 percent in the new fiscal year beginning July 1 -- costing tens of millions of dollars in a tight budget that includes major fee hikes and service cuts.
The increases include $77 million in raises and step increases already negotiated and some $20 million to $40 million in contracts still under negotiation.
The increases for city employees far outpace inflation and private sector pay hikes. As of May, the consumer price index in the Los Angeles area was up 2.1 percent from a year earlier. Private sector salaries in the Los Angeles area went up by 3.9 percent last year, according to the Employers Group, a nonprofit organization that surveys California firms.
City officials describe their pay policies as cost-of-living adjustments and not merit raises, but critics question the city's generosity at a time when private sector firms are laying off employees and slashing benefits.
"Generally speaking, Los Angeles salaries tend to be toward the high end of the municipal scale," said Steven Frates, a senior fellow at the Rose Institute of State and Local Government at Claremont McKenna College "In addition, the city of Los Angeles benefits package, like most government benefit packages in California, is much more lavish than private-sector benefit packages, and costly to taxpayers."
Also, he said, public sector jobs tend to be more secure from layoffs or terminations than the private sector, in part because of the political influence of employee unions.
City leaders and union officials say the employees are more than worth the cost and note the city has reduced the size of its work force through a hiring freeze for nearly two years.
"I will not apologize for a refuse worker making enough money to buy a little house in Sylmar and send a couple of kids to college," said Julie Butcher, general manager of the city's biggest union, Service Employees International Union Local 347. "The taxpayers are absolutely getting their worth out of the men who pick up their trash. Even when those fees are going up, people are still getting an incredible bargain."
Next year's city budget from Mayor James Hahn and the City Council raises trash fees by 66 percent, from $6 a month to $10. The fee increase was intended to pay for an additional 320 police officers, but the City Council put that hiring plan on hold, while leaving the fee increase in place.
Pre-9-11 contract set tone City Administrative Officer Bill Fujioka, the city's lead labor negotiator, said talks over several of the current contracts got under way in early 2001 before the Sept. 11 attacks accelerated the economy's downturn.
"At that point, the economy was looking different, it was prior to 9-11," Fujioka said. "It was before the state went through all these terrible problems. ... We were seeing the potential for steady growth in the economy."
That was when negotiators reached agreement with one of the largest city unions, SEIU 347. Once that three-year deal for raises of 4 percent, 4 percent and 5 percent was struck, he said, it set the tone for negotiations with every other union.
Actually, the City Council gave final approval to the SEIU deal in November 2001, but Fujioka said once negotiators at the table made the offer for those amounts, it would be bad faith bargaining to pull back, even with the economic changes. Most of the other deals were approved by the end of summer 2002.
"It's real difficult (to strike a lower deal)," Fujioka said. "Once you have a contract with one of the major bargaining units, you're establishing what I would call the floor."
One problem that can occur, he said, is if lower-level employees get raises and their bosses don't, the salary difference between the two positions can be compacted.
For example right now, he said, with the Engineers and Architects Association contract still not settled, there are some employees who are making more than their bosses.
The $77 million figure of negotiated raises with other unions includes roughly $32 million in raises for civilian employees and $45 million in civil service step increases.
The figure does not include the sworn public safety positions because their contract expires on June 30 and has not yet been renegotiated. But every 1 percent in sworn salaries equals about $11 million, according to Fujioka. The police union is reportedly seeking around 4 percent next year, while a city panel recently recommended 2 percent.
City officials note that the raises actually cost the city slightly less than it appears because they are doled out in six-month increments.
In the current contract, raises of 2 percent were given out every six months, until the final six months when the figure was 3 percent. So, for example, if employees get a 2 percent raise in the first half of the year and another 2 percent in the second half, that second raise only applies to half a year, meaning its cost to the city is cut in half, to 1 percent. For budgeting purposes, then, a 2 and 2 raise actually equals a 3 percent total cost to the city for the year.
But at the same time, however, that is counterbalanced by an additional cost for step increases, meaning employees will see more in their paychecks than just the 5 percent raises.
Step increases under the civil service system are, in essence, a form of promotion for doing the same job -- a reward for longevity.
Police officers, for example, start out as police officer I and eventually become police officer II, making a slightly higher salary for doing the same job. At the same time, the salary raises for those positions kick in, further increasing their pay.
Private sector lagging At the same time, in the private sector, most employees are asking, "Hey, where's my raise?" as Time magazine noted in a recent cover story detailing a period of decreasing salaries.
Private employers in the Los Angeles are "are being very cautious" right now, said Juan Garcia, director of research at the Employers Group.
Not only are they squeezed by the economy, but workers' compensation and health care costs are skyrocketing, increasing the pressure to keep salaries down.
Over time, public sector jobs tend to be more lucrative than the private sector, particularly when you weigh pension and other benefits.
"With the overall package, if you were to put an employee at age 20 in the private sector and another in the public, and then see at age 60 which one is likely to fare better -- it's the public sector," Garcia said.
The group is projecting salary raises of about 3.9 percent this year in the private sector in Los Angeles.
Deputy Mayor Matt Middlebrook, while noting most of the contract negotiations took place before James Hahn became mayor in July 2001, said employees are worth the money.
"Nobody is getting rich as a public servant," Middlebrook said. "The city employees work hard, serve the public day in and day out and don't make exorbitant salaries. Regardless of the size of these increases, which are not tremendously out of whack with inflation, they -- more years than not -- closely track cost of living."
Middlebrook noted that Hahn has not given out any merit raises or bonuses to city staffers, unlike his predecessor, Richard Riordan.
The upcoming contracts, he said, will likely be tighter than the current contracts because of the economic situation.
The city, he said, prefers to seek other means to reduce costs than laying off employees because of the effect on the economy.
"In an economic downturn, I don't think anybody believes putting more people out of work is good economic policy," he said. "Laying people off hurts not only the services that person helped deliver to the community, but takes food off the table of them and their families."
Geoffrey Segal, director of government reform at the Reason Foundation, said he thinks the city should have considered renegotiating its contracts once it realized how bad the economy had gotten. "Most businesses are not giving 5 percent raises," Segal said.
"That's a very generous raise, especially when you consider the total benefit package that government employees enjoy. They have a great retirement package, great health insurance. To get a 5 percent bump when the economy's down and everybody's cutting budgets. ... You see in more cases, people are being laid off."
Butcher, the union head, said while she did not want to reopen the existing contract, city employees tried to help out in other ways, by looking for ways to make the city more efficient. Also, she said, even though they are getting raises, they are being forced to work harder than ever before because of the diminishing size of the city work force.
She said private sector comparisons are bad because the private sector simply doesn't pay enough to blue-collar workers like the gardeners and trash collectors in her union.
"People can't feed families on what they pay in the private sector," Butcher said. "Which is why people at the poverty level are eligible for welfare. That's not good for the local economy."
http://www.dailynews.com/Stories/0,1413,200~20951~1463437,00.html
6-19-03 To Los Angeles residents facing higher taxes and fewer services, it must come as a shock the city has cut a deal with its architects and engineers on a new contract that allows these public employees to make out like bandits.
Recession or not, these are good times to be in "public service."
The new three-year contract includes pay raises worth 2 percent of the employees' salaries for every six-month period going back to 2001 -- twice the rate of inflation.
In total, the contract represents a 13 percent hike that will cost taxpayers $86.3 million out of a cash-strapped city treasury -- not bad at a time when pink slips have replaced pay raises in the private sector.
But that's typical for city workers, the only people in all of Los Angeles seemingly immune to the recession, the tight city budget and impending cuts from Sacramento.
Among city employees, pay raises averaging 4 percent a year are the norm, while the rest of us face higher taxes, steep cuts in public services and pay raises below the 2 percent inflation rate.
Collectively, L.A. municipal workers are the highest paid in the nation, even though the city services are among the nation's worst. They draw salaries that, on average, easily beat the pay for comparable private-sector work, and that's not even including their fat benefit packages and fantastic pensions equal to 75 percent or more of their highest salaries.
Because so few people vote, the unions help nearly every city official get elected, which gives them awesome power at City Hall. Their payoff is that huge pay raises continue unabated, regardless of the economy or anything else.
And those elected officials who are so beholden to the unions have the gall to plead poverty at every turn while looking for new ways to gouge the public.
Last month, the City Council determined the city was too poor to hire an additional 320 new police officers at a cost of $69 million.
Fair enough. The decision ticked off Mayor James Hahn, but, given the uncertainty of the times, it seemed prudent.
But if the city can't swing $69 million for new cops, then surely it can't afford $86 million for engineers and architects in the form of largely retroactive pay raises, can it?
The City Council has delayed ratifying the deal for a few weeks, ostensibly to see what happens in Sacramento in terms of local funding.
Yet whatever the outcome of the state budget mess, the council's decision should be the same.
City wages should be frozen immediately.
No union ought to receive pay hikes -- least of all retroactive ones -- at a time when city leaders are talking about scaling back library hours and hiking garbage fees by 66 percent. Of course public employees deserve fair treatment, but in tough times that also means they must share in the pain.
How the council ultimately acts on the proposed pay raise for architects and engineers will be a good indicator of its priorities. Are the council's members more interested in serving the public, or in serving the unions that get them elected?
Soon, you will find out whether your public servants have any intention of serving you -- or care only for themselves and the special interests.
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