Mayor Villaraigosa Releases Budget For 2011-2012

City of Los Angeles

April 20, 2011


Proposed Budget Minimizes Lay-Offs; Gives Employees the Chance to Restore Services and End Furloughs With Pension Reform Agreement


– Mayor Antonio Villaraigosa released today his proposed budget for Fiscal Year 2011-2012 which balances the City’s $457 deficit through a combination of structural reforms, operational efficiencies, and furloughs. Furloughs for the majority of the City’s civilian workforce can be eliminated if a pending agreement with the Coalition of LA is ratified by its members. 

“This budget reflects my steadfast commitment to making Los Angeles a City where neighborhoods are safe, parks and libraries are open, streets are paved, and there is a healthy Reserve Fund that ensures that the City is financially stable for generations to come,” Mayor Villaraigosa said. “In order to preserve these services and priorities, this budget makes long-term structural changes to move Los Angeles towards a fiscally sound and sustainable future.”

To support the City’s core public safety services, the proposed budget includes funding for graffiti removal and gang reduction and youth development services including the expansion of the Summer Night Lights program from 24 to 32 parks City-wide.

Villaraigosa’s proposed budget includes funding for:

Expanded library hours, including Monday service
New park and recreational facilities
735 miles of street preservation and resurfacing
Repair of 300,000 potholes, a 20% increase from the prior year
Updated community plans and planning for future transient-oriented and pedestrian-friendly districts
Replacement of our existing street lighting system with cost saving and energy efficient, light-emitting diode technology

In addition to preserving City priorities such as public safety, basic core services and maintaining a healthy Reserve Fund, Villaraigosa’s budget proposes deep and permanent cuts to City spending. These necessary structural changes will create a more efficient and effective City government and place Los Angeles on a long-term fiscally sustainable path. The proposed solutions include:

Spending Reductions and Reorganization
 – The Mayor’s Budget Team worked with General Managers from every City department to fully understand their individual budgets and mutually derive budget solutions that minimized service impacts while maximizing dollar savings. These include the elimination of filled and vacant full-time positions, expense reductions, and department consolidations.

Police Department and Fire Department Operational Efficiencies
 – The proposed budget maintains the Police Force at its current level of 9,963 officers, but as the City’s largest department, the Police Department is also taking the single largest budget cut – $100 million – which is compromised of a continued $80 million reduction in overtime and an additional $20 million from its salary account.

The Fire Department is implementing a new Re-Deployment Plan that will allow them to end the Modified Coverage Plan and reduce costs by eliminating $54 million in operational inefficiencies.

In both cases, the Departments are re-aligning resources to create operational efficiencies while protecting public safety. 

Civilian Furloughs
 – The proposed budget will not layoff any employees and if the Coalition of LA City Unions ratifies the tentative agreement announced last month, furloughs will be eliminated, allowing the City to provide services without interruption. However, in the absence of a ratified agreement, a responsible budget must include furloughs. Therefore, the proposed budget includes between 26 and 36 furlough days for the majority of the General Fund workforce. 

Funding Exchanges
 – Increasing the City’s use of Special Funds allows the City to reserve core services while creating General Fund savings.

One-Time Solutions 
– The proposed budget includes one-time borrowing in the amount of $43 million to pay for financing the cost of the final ERIP payment ($21 million) and a portion of the debt service on the Convention Center ($22 million). The City will use low-cost Commercial Paper to issue this debt that will incur low interest payments ($1 million over the five-year repayment of the debt).

“This budget gives us all a chance to invest in our City and our future,” Villaraigosa concluded. “It gives us the opportunity to make structural changes by reigning in our pension and healthcare costs and it gives employees the opportunity to invest in themselves to end furloughs and the cycle of layoffs, displacement, and uncertainty.”

The proposed budget now goes before the City Council for approval.

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