LA City Workers.com – City of LA Blog

The Famous Friday Drop.

After everyones gone home for the night, surprise an email pops up near 9Pm.

In the Excuse filled email the latest contract agreement.

After carefully reviewing the New Revised Draft Agreement which supercedes are previous ERIP, and our current contract, one thing is clear.  Were Still Screwed!

We were fed half holidays unpaid, which came up to a couple hours, now we are forced to randomly take 3.5 hours Every Single pay period.

Coalition members will be Willingly Furloughed nearly Two Weeks – 59.5 Hours

Bonuses no longer compound losing there importance and recognition of the hazardous life threatening duties performed Costing Workers Thousands! LAPD Officers Would NEVER tolerate this.

NO CASH OVERTIME – Comp time only. Federal Limit of 240 hours.

NO RAISES – EAA MEMBERS GOT THERE RAISES

There are no Real tangible savings other then the Furloughs.

We continue to put off Real cost savings which will only make us suffer in the long term putting everyone’s future at risk. If the council isn’t told no you can’t continue to spend in this fashion, one day we will wake up to a headline blasting City of Los Angeles files for bankruptcy.

It is up to us to be responsible and Vote NO on this deal the furloughs are a given, but risking our financial future on the hope the city will magically come up with money in the next year and not spend it on more cops is foolish.

Consider this, LA City council instead of actually saving money by canceling the Police Academy Class has only delayed it in the hopes that if we give back all of these things in our contract we will allow them to continue spending at an unsustainable rate. No Other Union has had to give up this much, why are we giving away so much?

Paying more for Early Retirement and adding these latest concessions will leave us far behind other workers, and Sworn will continue to make out like bandits.

We Do NOT have to keep shouldering the costs for early retirements and our failed unions desperate attempt to save face.

Look at the numbers and the long term consequences of this deal.

If We VOTE NO:

We Get a +3.0% Retro Raise

We GET another 2.75% Raise in Two Months

We Keep our CASH Overtime.

We KEEP our pride, and our contract whole.

We will still have a contract after the economy improves, and we will be able to negotiate things that will prevent using employee wages as a savings account.

If we Don’t we are opening ourselves up to continued abuse and more of the same.

Employees will not have there retirement increased without proper bargaining.

If we Vote Yes we are setting ourselves back 30 years.

We are going to allow the city to transfer people against there will, we are hurting everything as a collective bargaining group we are suppose to stand for.

Stop getting used as an ATM.

9-14-2009, Budget committee sends Julie Butcher and the Coalition back to dig in to there numbers to save the city an additional “50-60 Million” so ERIP can pass committee and be presented to council.

9-15-2009 12 hours later and countless sleepless hours the coalition return to the council ready to share there hard work, after all saving 62.5 million can’t be an easy task but the early retirement plan they have worked on for over a year now with it’s flaws, changes, and modifications ratified by All coalition unions, will finally be voted on and sent to the full city council.

GUESS AGAIN! In a Political showdown for the ages Mayor AntonioVillaraigosa slashed the hopes of the Coalition and it’s membership by simply telling council he would veto ERIP if passed.

Thousands of man hours, countless efforts by the coalition meeting after meeting roadblock after roadblock the coalition has overcome all obstacles to present the council the option of ERIP to prevent furloughs and layoffs for 22,000 hard working members of the coalition, only to be blindsided by political grandstanding and ego trips.

ERIP may not have been the best solution, but it is not as bad as having our elected officials incapable of making a decision on balancing the budget no different then the state legislators they themselves criticized.

It is unfair to dangle the ERIP carrot in front of thousands of employees then snatch it away at the last minute demanding further concessions.

City of Los Angeles should have empowered an actuarial study the minute erip was finalized and before the members of the coalition voted, if SEIU and the coalition had known several months ago that this early retirement program would not have been approved because of cost’s it could have had the opportunity to present to it’s membership alternatives it would have had the time to work with the city council in order to make the budget concessions it needed in order to maintain the current workforce at acceptable levels.

City Council should seriously consider the fact LAFD, LAPD, and civilian employees will no longer tolerate the second class status to proprietary departments and will demand the Council make cut’s to it’s programs and salaries themselves.

We can’t layoff the council, but with there handling of the current situation it would not be surprising to see the start of a recall campaign begin to demonstrate our anger not at the failing of the erip, but that of council to seek solutions to the problems facing us all.

Many council members have worked diligently towards a fair solution while looking out for the city as a whole, Mr. Rosendahl, Mr. Parks, and Mr. Huizar have all stepped up to the plate and worked countless hours toward a resolution.

We are so close to a solution it is time we all come together to determine what can and can not work so that the uncertainty is removed.

Super majority, 12 Members of council are needed to pass ERIP today, we need to move on address the budget issues that got us here, and take steps to prevent these budget shortfalls from causing further devastation to the city it’s constituents, and the employees that serve them.

Coalition leaders can not be blamed for the failing of the ERIP, that would fall squarely on the shoulders of Council and the Mayor they have worked to pass the ERIP for many months and this last second political assault is inexcusable.

City of Los Angeles Full Lacers Board voted 4-3 in favor of the 15-year repayment period.

ERIP to be voted on by Council Twice if Approved, the 45 Day Early Retirement  window will open and employees will begin filing for Retirement.

If Eligible please read the discussion forums area to make sure your classification has not been Excluded from participation or capped.

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.

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