LA City Workers.com – City of LA Blog

SEIU Local 1000 scores a Furlough Victory!

State fund insurance workers will Get back pay and interest for the furlough days taken ruled Superior Court Judge Charlotte Walter Woolard today.

Governor Arnold Schwarzenegger imposed mandatory furloughs on nearly all State workers earlier this year, SEIU Local 1000 filed five cases on the furlough issues and four are yet to be decided.

SEIU claimed furloughs would amount to a cutback of staff, State Fund employees are exempted from ” hiring freezes and staff cutbacks” in the states Insurance Code ruled Judge Wollard.

State officials would not say if they planned on appealing the ruling.

City of Los Angeles workers will not be affected by today’s ruling as it does not cover any employees outside of the State workers compensation Fund, the City of Los Angeles is self insured for workers compensation and is operated by LA city employees in the Personnel Department.

City of LA Reserve Fire Fighters program needs to be implemented to save lives, Union needs to accept reality. Allow Reserve firefighters !

Station File Time Lapse #4 from Dan Finnerty on Vimeo.

Shared Sacrifice, Allow the Los Angeles Fire Department to recruit and train volunteer firefighters for implementing an extensive network of high quality candidates to fill positions which otherwise would have remained vacant.

After the 1994 Northridge earthquake Los Angeles became very aware we were woefully under prepared for a major catastrophe, now in these very lean budget years we are forced to brownout stations and risk lives in order to meet budgetary constraints while at the same time earning ten’s or hundreds of thousands of dollars in Overtime.

Clearly we do not have enough firefighters, and we can’t afford to pay for more with the very lucrative compensation packages offered to Sworn members of the city.

Solution: Reserve Firefighters.

They would be trained at the Los Angeles Fire Academy, they would be required to pass the same background investigation, and they would be part time volunteer fire fighters required to perform a minimum amount of service per month to the city for the first several years after training in order to recoup the investment the city makes.

Only one obstacle remains the Union. Whose old arguments fly in the face of logic because we have qualified Reserve Police Officers, who by all accounts can take or save human life.

If the Los Angeles Police Academy can Train and recruit high quality Reserve Police Officers It would be very difficult to argue that the Los Angeles Fire Academy could not perform to the same standards.

It’s time Los Angeles sees through the smoke screen of the union and allows the City of Los Angeles to bring up the numbers of Fire Fighters to the same levels of staffing as the Los Angeles Police Department and to afford the citizens of this city the same protection the County of Los Angeles and most every other city allow, Volunteer Firefighters.

As the fires continue to grow,  and lives are lost by our brave firefighters it is now more urgent then ever to explore the possibility of this solution to allow those willing to sacrifice the opportunity to do so.

If this isn’t the agenda of all agendas, Tuesday the most important group of people in city politics will get legal advice on overturning the furloughs and ending or accepting ERIP among other issues.

Members: Antonio R. Villaraigosa, Mayor

Eric Garcetti, President of the Council
Jan Perry, President Pro Tempore
Bernard C. Parks, Chair, Budget and Finance Committee
Dennis P. Zine, Chair, Personnel Committee
(Any interested Council Member may attend)

The City Attorney requests Closed Session pursuant to Government Code Sections 54956.9(a) and/or (b) to allow the Committee to confer with its legal counsel subject to the attorney/client privilege on the following matters:

2. Legal Advice Relative to Status of Tentative Agreement with the Coalition of City Unions, Including the Early Retirement Incentive Program (ERIP)

3. Legal Advice Relative to Furloughs


Closed Session: Conference with Labor Negotiator / City Management Representation, or Designee, (pursuant to California Government Code § 54957.6) concerning consultations and discussions with representatives of the relevant employee organizations regarding:

4. Status Report and Instructions to Negotiators on Sworn Negotiations

5. Memorandum of Understanding Amendment for Fire Chief Officers

That the Committee recommend to the Board that the Unfunded Actuarial Accrued Liability associated with the City’s proposed Early Retirement Incentive Program (ERIP) be amortized over a time period that matches the actuarially-calculated salary savings period from the ERIP – 5 years (Method 2).

 Method 2 – Match the Amortization Period to the Actuarially-calculated Average Salary Savings Periods

Description of Method: The GFOA’s Recommended Practice on “Evaluating Use of Early Retirement Incentives – 2004”, in part, states that: The incremental costs of an ERI should be amortized over a short-term payback period, such as three to five years. This payback period should match the period in which the savings are realized (emphasis added).

This is one of two proposed methods (the other being Method 3) that attempts to match the amortization period to a definable period of salary savings. Under the ERIP, the City would realize short-term salary savings associated with the decrease in the City’s active member payroll due to increased retirements. This savings period is short-term in that it only lasts until the time ERIP members would have retired anyway. Under this method, the amortization period for the ERIP costs would match this actuarially-calculated average salary savings period.

For example, a member who, according to actuarial assumption, would have retired 3 years from now takes the ERIP offer and retires immediately; the City’s salary for this member will be eliminated. However, the salary savings for this now-retired member will last for only 3 years because the member presumably would have retired in 3 years anyway, even if the ERIP did not exist.

At staff’s request, Segal calculated the average number of years of the salaries that will be eliminated and thus saved as a result of the ERIP – beginning from the early retirement date in the report through the actuarially-determined retirement date without the ERIP. The calculation indicates that the savings brought by the ERIP on salaries will last for an average of 4.3 to 5.1 years for Alternative 1 and 4.7 to 5.4 years for Alternative 2.

The emerging industry best practice points toward a short amortization period for costs of benefit enhancements resulting from early retirement incentives. One evidence of this emerging best practice is that, in its response to the Government Accounting Standard Board’s (GASB) Invitation to Comment on Pension Accounting and Financial Reporting (Attachment 11, Page 20) dated July 31, 2009, a group of public sector actuaries commented on this issue as follows: For early retirement incentives or other termination benefits which take the form of enhanced pensions, we would support amortizing the change over a substantially shorter period, possibly as short as five years. Resulting Amortization Period: 5 years.

Advantages of this Method:

• The ERIP liability is paid off during the time period that LACERS is expecting to payout a relatively high percentage of the ERIP-related benefits (Attachment 10) and is the only proposed method other than Method 1 (0-year amortization) that provides sufficient cash inflows to fully cover the expected benefit payments throughout the amortization period.

• This method is consistent with the model practices contained in the actuarial community’s comments to GASB and the recommended practice from GFOA. Disadvantage of this Method:

• This method creates larger City payments over the short-term than some of the other methods. Actuary’s Opinion on Method

Paying for the Costs of the ERIP

The fact that the City agreed to terms with the Coalition for the recoupment of some of the additional contributions (including the period over which that recoupment would occur) is a separate issue from the amortization period over which the City pays for the enhanced benefits. In fact, there will be an inherent mismatch between the employee contributions, if found to be permissible, and the City’s obligation to LACERS because the amount of the employee contributions are not sufficient to cover the full, estimated cost of the ERIP under either take rate scenario.

Visit the Discussion Forums for the Full Report!

LACERS Ad Hoc Committee ERIP Recommendation: “that the Unfunded A.A. Liability with City’s proposed (ERIP) be amortized over – 5 yrs” #erip