City labor deal favors unions over taxpayers

A five-year salary deal with six Los Angeles unions includes incentives that could boost the cost of the contract by 10 percent, to nearly $300 million, city officials conceded Wednesday.

Details of the proposed deal, outlined on the union coalition's Web site, include flexible payments to approximately 22,000 workers if they find $25 million in cost savings citywide by the final year.

City officials have hailed the cost-saving provision of the deal, but admitted Wednesday that the cash payouts to workers would offset most, if not all, of the savings.

The contract also calls for salary negotiations to be reopened if city revenues top projections by 3 percent, an unprecedented provision since most contracts are based on cost-of-living or inflation measures. It also does not allow terms of the contract to be reduced if city revenues drop.

"It's a pretty rich contract," said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. "It is troubling, given the perilous financial situation facing the city and all local government. They have to be careful in what they are promising workers and the public."

But City Administrative Officer Karen Sisson, who headed the city's negotiating team, said she believes that the proposal is fair to both sides.

"We require the unions to find specific savings that will continue year after year for them to get certain benefits," Sisson said.

"And while we agreed to sit down and talk if our revenues exceed expectations, there is no requirement that we increase the contract."

The deal calls for salary increases of 14.25 percent over the next five years for all workers, with an additional 8.25 percent for workers at top pay levels in the last three years of the contract.

The deal means thousands of city workers will see salary increases of about 23 percent - well above the controversial 16.8 percent salary deal recently negotiated for Department of Water and Power workers.

Total cost of the six-union salary deal is estimated at $273 million.

In a statement on its Web site, union coalition leaders said the contract is unprecedented "not only because of what we fought hard to get, but because of how we got there."

"By working as a coalition, city unions were able to support each other, increase our strength and earn greater respect from the city.

"Instead of letting the city pit one union against another, we stuck together and were able to negotiate a better package that works for everybody."

Few details of the package have been released as union membership debates whether to ratify the deal. The contract also must still be approved by the City Council and Mayor Antonio Villaraigosa.

`Flex cash' payments

The union Web site says the contract includes an increase in "flex cash" payments in the last year of the deal if workers find $25 million in savings or efficiencies.

It would provide monthly payments of $115 for full-time and $57.50 for part-time workers.

The flex-cash payment - a monthly stipend given to allow workers to include family members in dental plans or upgrade their insurance - is now given in much lower amounts and varies depending on the union.

If enacted, it would add $25 million to the contract costs.

But Sisson said the flex-cash program is fair because it would require the union to find verifiable savings that could be realized annually.

"If they come up with $15 million or $20 million a year, the city gets those savings with no increase in the flex-cash program," Sisson said.

"If they do find the $25 million, then the flex-cash program will be revenue-neutral."

But Kyser said he is concerned that the deal comes amid a drop in the housing market and property values, which are reflected in lower tax revenues to local government.

"I would expect to see people asking the Assessor's Office to revalue their property to try to reduce their property taxes," Kyser said.

"If that happens on a large scale, then the cities and school districts will be losing a lot of money."

He also noted that the deal is coming as the city is asking voters to approve retaining a telephone users' tax amid concern that a judge could throw out the current tax, and as the DWP is looking to raise both water and electric rates.

"We are facing perilous times in local government," Kyser said.

Parks backs pact

But Councilman Bernard Parks, chairman of the council Budget Committee and one of the council's more fiscally conservative members, defended the proposed agreement.

"You have to look at this in a couple of ways," Parks said. "If you consider that these are the same workers who three years ago agreed to take no pay increase and this is a five-year contract, then we are looking at it in an eight-year window.

"Also, these are some of the lower-paid workers in the city. If we are going to seek parity with the DWP, we have to begin somewhere with these workers."

A recent Daily News review of DWP salaries found they average 20 percent higher than comparable city posts, a difference that has long been a source of contention for other unions.

The coalition in the recent talks included Service Employees International Union Local 721, representing 9,160 workers from custodians and trash-truck drivers to street-services employees.

It also represented 9,000 American Federation of State, County and Municipal Employees District Council 36 employees, including clerical workers, librarians, professional medical employees, Community Redevelopment Agency workers, and mostly part-time Recreation and Parks employees.

Other unions include the International Union of Operating Engineers Local 501; Laborers International Union Local 777; Los Angeles/Orange County Building & Construction Trades Council; and Teamsters Local 911.

Police and firefighters contract talks will come up in about a year, but Sisson said those will be subject to different dynamics.

Some talks already have been held with the unions about using a similar negotiating approach to that used by the city coalition of unions.

But Parks said he does not believe this contract deal will set a precedent for deals with police and firefighters - the highest-paid workers in the city.

"We are going to have to get a message out that we are holding the line," Parks said.


No comments:

Related Posts with Thumbnails