Questions & Answers on the Agreement Won by LA City Workers
City workers flooded Council chambers all week long as Council stepped up with the Coalition of LA City Unions in a partnership that all agree has saved City services from drastic cuts and will be carried forward to usher LA through the worst economic downturn in forty years.
- No furloughs or layoffs for 22,000 Coalition of LA City Union members
- An early retirement plan that could benefit up to 2,400 employees
- Wage deferrals and a two-year extension of the Coalition contract
Through the kinds of creative solutions that City workers generated at this year's Efficiency Summit and have been coming up with for years, this agreement will keep everybody working. It takes a thoughtful, forward-looking approach to the budget crisis, rather than the slash-and-burn tactic of layoffs and furloughs.
What is the difference between this agreement and the one approved in July?
In its September 11, 2009 report, the CAO proposed to the Council's Budget & Finance Committee specific operational plans slated for implementation on September 29. Earlier this week the City was prepared to move forward on those plans to order 22,000 LA City employees to take 26 furlough days, and implement over 900 layoffs. Compared to that, this agreement might sting, but it won't inflict lasting pain.
It implements early retirement and avoids layoffs and furloughs by doing the following--and with the exception of the first three bullet points, all of these are temporary, only for this fiscal year:
- Members will contribute an extra .25% of their paychecks to LACERS, added to the already ratified .75%, for a total increased contribution of 1.0%, beginning on July 1, 2011.
- This is a clarification of the original early retirement agreement, due to a mistake of the actuary, who failed to account for the roughly 1/3 of city workers who will not retire from the City, but will leave for other jobs before retirement. When they leave they take their retirement with them, with interest.
- This 1.0% will be paid for no more than 15 years, and maybe less. It will cease as soon as it fully pays for ERIP.
- Immediate elimination of the pre-1983 defrayal.
- That means if you were hired before 1983 and contribute less than 6% toward retirement, your retirement contribution will now be the same 6% all city employees are making.
- All pre-1983 hires will be eligible for ERIP.
- This adds a credit of .07% to the 1.0% increased contribution above, helping to pay the costs of ERIP that much quicker--at a rate of 1.07% total.
- Retirees who take ERIP will make an ongoing contribution of 1% toward the retirement fund after they retire. Given the incentives of the ERIP, city retirees will benefit for life. It's only fair that they contribute to the future of our pension fund in this modest way.
- 79 hour pay period--one hour off in each of the 19 pay periods left this fiscal year.
- 8-hour paid holidays become 4-hour paid holidays during the 2009-2010 fiscal year.
- Annual sick time payout deferred from January until the next fiscal year.
- The first ERIP cash payout for participants will come early next fiscal year. The second payment will come early in the 2010-2011 fiscal year.
- Overtime will be compensated in time credited, not in cash.
- Removal of obstacles to extending a 72-hour Alternative Work Schedule to any City worker who wants it. Currently workers who request a work schedule modified to work 72 hours out of 80 often encounter resistance. The City now supports the extension of this option to anyone.
- Transfer the savings generated by ERIP and the COLA deferrals in Special Fund and Proprietary Departments to the General Fund. The Coalition and management will work together to move as much money, resources and workers as possible. This will be done in several ways.
- Hiring in Special Fund and Proprietary Departments will be through transfers and internal promotions. The City's immediate budget crisis is a crisis of the City's General Fund.
- Contracting work between City departments. As an example, the DWP Board recently contracted trash, recycling and composting services from Sanitation for $1.5 million. The Coalition believes there are many more opportunities like this.
- Eliminate bonus compounding. This fixes an accident of accounting that was never a contractual benefit. Workers receiving more than one bonus, e.g., bilingual pay and shift differential, have had one bonus compounded on top of the other, rather than both calculated on top of base pay. This minor change will save the City $600,000.
- Deferral of reimbursement to City Attorneys for their dues to the California Bar. The reimbursement normally paid in February will be paid in the early part of next fiscal year.
- Expansion of Gains-Sharing from the current MOU. Money saved over $78 million will be credited to the Gains-Sharing Joint-Labor Management Committee. On October 1, 2009 the parties agree to mutually develop the implementation of this committee and process. This will also be the forum for implementing City worker ideas for efficiency, savings and new revenues, as called for in the existing MOU.
Why should I pay more just so long-time employees can retire?
We're facing the worst City budget crisis in memory. We're going to retire 2,400 of the longest-serving highest-paid employees to keep everybody working and protect the City services everyone relies on. Those City employees who voluntarily decide to retire are going to pay an additional 1% into retirement, after they retire. This is a down payment on the future. We need to make sure our retirement is fully funded for the future and this is a way to make it happen.
Will City employees get a chance to approve this agreement?
Yes. By unanimous voice vote Council approved this as a tentative agreement, pending ratification by members. Council will vote a second time as required by law in 30 days.
The City has also committed to moving quickly to implement the terms of the agreement.
The specific language of the agreement is being finalized this week. Also the details of the ratification vote. All Coalition bargaing teams will meet this week to review the outlines of the agreement and make some choices on specifics.
After the bargaining teams have had a chance to meet and the language is finalized, details of the ratification vote will be mailed to each member with a detailed ratification summary.
I want to take advantage of the early retirement program. What are the next steps with early retirement? Can I retire now?
You can retire now. City Council is required by law to read the ordinance implementing the program one more time, in 30 days, but Council has already passed a motion saying City employees can take advantage of this program.
Read more details of the Council's breakthrough vote.
Contact your Worksite Organizer with further questions, or call the Member Resource Center at (877) 721-4YOU .