Riordan, business leaders threaten Ballot Measure to alter city pension system
(CNS) – A coalition of business leaders, including former Mayor Richard Riordan, threatened today to mount a ballot measure campaign to take away the authority of the city’s leadership over the city’s pension system and give it back to voters if they don’t reduce the taxpayers’ share of retiree pensions.
The proposed ballot measure would also cap all city employee salaries until the city’s share of their pensions is reduced.
Riordan and Los Angeles Area Chamber of Commerce CEO Gary Toebben made the ultimatum before a morning meeting of the secretive Executive Employee Relations Committee, which negotiates on labor issues behind closed doors.
The committee is headed by Mayor Antonio Villaraigosa and includes City Council President Herb Wesson and other council leaders on budget and personnel issues. The committee is considering a plan proposed by the mayor several months ago that would make changes to pensions for new hires but not current city workers.
Villaraigosa proposed raising the retirement age for new city workers from 55 to 67 and capping the size of employee pensions at 75 percent of a worker’s salary. The average city employee receives a pension worth about 70 percent of their highest salary.
Villaraigosa’s plan would also reduce employees’ pensions by using an average of a worker’s five years of highest salary rather than the current 12- month average. The mayor also wants to halve the maximum amount the city will pay for workers’ retirement health care from the current $1,190 per month to $596 and eliminate coverage for spouses or dependents.
“The mayor’s proposal, in and of itself, is not sufficient. It’s just new hires,” Toebben said. “Our proposal is more extensive.”
Toebben’s proposed ballot initiative would give sole authority over the pension system back to voters, who opted in 1972 to give the mayor and City Council decision-making power over civilian pensions. Decisions on changes to police and firefighter pensions must go before voters.
The initiative would also cap the city’s share of pensions at 15 percent of civilian employees’ salaries and 25 percent of police and firefighters’ salaries. The city pays the equivalent of 24 percent of civilian employees salaries and 39 percent of sworn employees’ salaries into the pension system now.
Toebben said he would decide “fairly quickly” whether to begin the signature-gathering process to get the coalition’s proposal qualified for the ballot, but would not provide a deadline.
Riordan said the city is on the brink of ruin if changes are not made to the city’s pension system. “We’re going to lose more jobs. We’re going to lose a quarter of our police department. We’re going to close our parks down, and jobs and businesses are going to leave the city,” Riordan told City News Service. “(Villaraigosa’s) plan is a good step in the right direction. I don’t know whether it’s sufficient or not.”
Villaraigosa and Wesson declined to comment on the discussions over the mayor’s proposal, saying only that the committee took no action today.
Asked about the threat of an alternative plan on the ballot, Villaraigosa said, “I’ve said that I’m going to put something on the ballot if (the council) doesn’t pass (my plan).”