Wednesday, February 17, 2010
New York Attorney General Andrew Cuomo "In The Matter of WETHERLY CAPITAL" (24 Page INVESTIGATION Document)
NOTE: TO SEE EACH FULL PAGE YOU MUST RIGHT CLICK ON PAGE, THEN CLICK "VIEW IMAGE."
Monday, February 15, 2010
A Conversation with (FAILURE) L.A. Mayor Antonio Villaraigosa
Antonio Villaraigosa: I don't take these decisions lightly.... In no small part I think all of us kind of look in the mirror and feel good or not feel good about the person we seen in the mirror in no small part because of the jobs we have. So laying people off is not something I do lightly, it's not something I relish. In fact, I haven't used that word previously, but it pains me greatly to lay one person off. And I've said that I intend to think of every person that I lay off as possibly a single mom with three kids, one of whom may have health needs and need health insurance. I also didn't say, but I will say here -- I mean look, we've had a structural deficit since 1997 every year. I reduced that by 97 million my first year, and I think a hundred and some odd million the second year, and then the fact is I've contributed -- I'm part of the problem, I'm not here to point fingers at anybody, notwithstanding the fact that I think some people feel, and you guys love the battle between the mayor and the council. I'm not looking for a battle with anybody, neither the council nor our labor partners. I certainly acknowledge the work that our employees do ... and I get to see them up close in a way that a lot of you don't. You know, when those fires and those floods, you know, we got -- it's not just the police officers and the firefighters that are the best anywhere.... Our engineers and our architects, we have talented people who are librarians.
So these decisions aren't made lightly, they're not made because of some philosophical bent or ideological desire to reduce the size of government; they're made simply because we cannot sustain the size of our workforce, the cost of our payroll and pensions, and if we don't move quickly and decisively to identify new revenue options, to make these cuts and layoffs that are without question going to be part of the equation here, we will only put ourselves in a more serious financial predicament than we are in currently.
So with that I'll be more than happy to answer your questions. The one thing -- and you can put that on the record -- I push back. I think you all know that I'm not a guy who -- you know, I push back. You all have a right to ask your questions, and I have a right to push back, and I do. So with that caveat in mind, ask your questions....
Nick Goldberg, L.A. Times: Let me start this out by asking you a little bit about how you're going to get that done. I mean, last year, as I understand it, you guys went in and arranged an early retirement deal, and my understanding is that it took so long to work it out, it took so long to get the program underway that a lot of savings were lost. What can you do? ... What are you going to do this year? How are we going to get this done? What's going to keep the dickering and bickering from holding this off?
Villaraigosa: You can write whatever you want here, and again, I'm not going to go off the record because I'm just going to say what -- I hope you don't put too much of the strategy in there, but you guys write whatever, I'm not going to tell you not to -- but look: I negotiated the early retirement program. CAO comes in, he tells me, "This doesn't cost out. What are you doing? You gotta kill it." I did; he then negotiated the early retirement. He comes back to me; I said, "Hey, you're the one who told me mine was no good. What, yours isn't much better." I said I'd veto it, if you remember, he had to make $78 million in concessions, they had to go to 7%. All of that, while it was important to do, and you editorialized that it's important to remove as many of these people as humanely as possible, it also had to pay for itself. And as you know, all we paid for was the incremental cost. It is more expensive to ERIP than to lay off.
So while we did that once, and we may even do that for the other 360 employees if they pay the incremental cost, and right now they're saying they won't pay the incremental cost, what we're saying is, we can't keep ERIPing here. The fact is we can't afford that either.... I want to do this humanely, but I also -- there is a bottom line here. So it took us way too long.
Now I believe -- I'm the one that brought in win-win bargaining, as you know, and I believe in it. But in a crisis, the win-win bargaining just, it's like, molasses, and we can't afford to wait that long. What we didn't have, because we didn't know I could last time. You're probably thinking someone's going to ask, "How come you're ordering layoffs now and you didn't order them before?" I'll tell you why: Because last time, it was in the context of negotiations. You have to have an MOU, the council has to approve the MOU. With my new lawyer that just came on board, we found out, hey, guess what, you actually have the power through your general managers to order layoffs and not go to the council.
Let's be honest: What's going to happen if I have to go to the council? We're not going to approve you right now, but we may ultimately approve them, and I said that to them, and I think ultimately they'll do it, but it might not be approving them for six months, nine months, while we're negotiating. If we don't order these layoffs -- and yes, it's true, not all of these people can be laid off because with some we have an agreement that they can't be laid off until July 1. If we don't start identifying them now, it takes nine months to lay off people. It is going to be a legal battle with every single layoff, because what happens under our system, when you lay off one person that isn't necessarily the person you're laying off; they can bump all the way through the system.
So once it was clear to me that I had the power through my managers -- and all [City Attorney Carmen Trutanich] said what that I had overreached. I don't have power over the city attorney because he's duly elected, but as you know I wrote him a letter saying I still want you to lay these people off, and I said that in public at the City Council meeting. And I don't have power over the city controller, but [ Wendy Greuel] has already agreed to lay off her five. Why does he have a hundred and she have five? Look at his budget; he's got a way bigger budget; he's got a lot more people. This wasn't personal ... it was proportionate to the size of the budget....
I'm going to be ordering another 1,200 to 2,000 layoffs. If we don't start identifying the people now and go through the process, we'll never be able to get these people off the payroll quick enough. Even with that it's going to be a nine -- it'll probably be ultimately a nine month, six to nine -- they say as short as three. You know, good luck, I've never seen -- this could be a nine-month exercise. So if I don't order them now, I'll never be in a position where people -- and this is what I said, if everybody -- OK, last year we were able to get people to defer their raises. That was no small feat, but it was a deferral. We still have to pay them. In two years we're not going to have the money to pay them. We got the police to defer cash overtime. What's the force and effect of that? Taking 600 officers off the streets of L.A.; that's the force and effect of that. But it's about a $5,000 cut to their salary per year.... The firefighters: Firefighters with modified coverage -- there's no such thing as a "brown-out," because within hours we can order all those people back. There's no brown-out, please, that nomenclature is a nomenclature used by the union in order to make this something that it isn't. But there is a reduction in staffing at any given time. That reduction has resulted in firefighters getting about $1,000 a month, on average, hit to their budget. So some of them have taken some cuts....
There's no scenario where there won't be layoffs. What we're talking about is the magnitude.... So I have to announce these now, not because we're going to lay them off tomorrow, but because we have to start the process, and because the only, this is the strategy, the only way to get people to sit down and even talk about -- a 5% cut ... is $150 million, 10% is $300 million, a 15% is $450 million; $450 million is roughly the problem we have. Now, I know no union's going to be able to talk their members into a 15% cut -- I know that. But we won't even talk about a 1% cut if there aren't layoffs, because one of the things I intend to do, if I was on the school board, I told the superintendent they ought to be doing, the union has to partner with us here. They're in control of the number. If they agree to cuts, increase in pensions, the size of the layoffs doesn't have to be as great.
But at the end of the day, if everybody wants to make me look like the whatever here, I am going to make these decisions. I am not going to recoil from them. I recognize -- and you haven't said it, but I'll say it -- that I'm part of the problem. You know, the structural deficit that I began to work on kind of got beyond us. We reduced it, and then it went back up, and the fact is as much as we've gotten concessions from the unions, we should have gotten more. But I kind of learned from that. I am going to force these concessions or we are going to make the cuts now, because we cannot let time be our enemy....
David Lauter, L.A. Times: Let me ask you two things. You announced 1,000 the other day, now you're trying an additional 1,200 to 2,000. My first question would be, are you reasonably confident that that's going to be enough or do you think you may have to go deeper? And the second question is that you were talking about a sense of urgency, you'd like the unions to come to the table and give something back. What's the deadline for that? How long do they have before it becomes too late?
Villaraigosa: On the first question, $1.8 billion is roughly 18,000 employees?
Aide: That's assuming $100,000 per employee, so that would be 18,000, right?
Villaraigosa: You do the math, you're better than me.
[laughs]
Villaraigosa: But I think it's like 18,000 employees. We couldn't cut 18,000 employees from our workforce, which is why we're not just looking at layoffs. We're look at the revenue -- parking -- and what I've asked the council, by the way. Reasonable people can disagree on whether or not we should do parking meters, OK? You guys know about that experience in Chicago -- but, we're not going to study it? They wouldn't fund the study? Come on, we gotta fund the study. Let's figure out how we can structure it and maybe not get as much but protect the public too and not have gouging and maybe have, kind of, hikes that are kind of moderate over time or something. There are a lot of ways to structure it, and that's why you want to study it. So I asked them -- they gotta study it. They can't just say no to the study, because that's where the real money is. Parking garages are only one to $200 million
Aide: Sorry, can I say something about the 1.8 billion figure so that we're all clear? The $1.8 billion figure that has been bandied about the council and CAO assumes -- basically what we have is a structural deficit of about 500 million, and that is assuming that over the next three years we don't do anything to solve this structural deficit, and that all of the budgets are balanced through one-time furloughs, et cetera, and that would compound over the four years to achieve that 1.8 billion if we did nothing, which is why the mayor is taking action right now, to prevent that from being reality.
Villaraigosa: That's a good point, thank you for that, and I meant to say that at the council.... Obviously if we make these now we won't have a $1.8 billion deficit. But I mean look: Even with the decisions we made with the early retirement, which also reduced -- that number would have been greater it would have been two-point-something, had we not done the ERIP, because that removed people from pensions, salaries as well. It has a structural impact....
Lauter: Timetable? How long do they have?
Villaraigosa: Well, under the agreement they have 40 days from when we initiated it, and I think --
Aide: Twenty days.
Villaraigosa: Twenty days ... or we're going to move -- we're already moving on them....
Lauter: But I hear you saying, if I'm understanding you correctly, that several thousand additional layoffs would be necessary if the council isn't willing to go along with at least some of the other revenue-raising proposals that you've talked about.
Villaraigosa: I think they're going to have to agree to all of them. I think we're going to have to agree to all of them, we're going to have to do them quickly, we're going to have to -- but not just that -- we're going to have to cut. There will be some layoffs. It's not just the revenue options, people are going to have to take cuts. They have to agree to take cuts and raise their pensions ultimately....
We intend to balance next year's budget so that we're not in a position of having a $1.8 billion structural deficit. But we have to balance it not with one-time, but with decisions that affect the structural deficit.
Dan Turner, L.A. Times: You mean, basically, in order to get the union to go along with salary cuts, you have to give them more generous pension benefits, right?
Villaraigosa: No. We're going to have to raise the pensions --
Turner: What do you mean by raise the pensions?
Villaraigosa: Raise the contributions.
Turner: I thought you meant raise the benefits.
Villaraigosa: We can do that, by the way -- I know you guys wanted us to do, and this is where I push back. You can't say on the one hand --
Newton: We're not really pushing against you.
Villaraigosa: On one hand, put it on the ballot, then I raise money, and then all of you are checking who I raise money from, and I'm fighting to, you know, $8 million campaign? Of course I don't want to put it on the ballot. I mean, somebody ought to think through that. Yeah, I'm not going to, because you're going to beat -- no matter what I do, I'm going to get it.
So I'd rather, I told the council, you could pass by ordinance for civilians -- for new people, not for current. We have to negotiate with them for current. But for new people you could pass it by ordinance, so why put it on the ballot so that I'm involved in an $8 million campaign that, you know, and they're going to make it -- and by the way, just so you know, I've polled it. You would think people are for it, but they're not. They're all getting beat up. They're not for layoffs, they're not for cutting services, they're not for raising pensions. You would think they would be because a lot of them don't have pensions like that. But I polled it -- this is, these are, it's much better to do it by ordinance. Now, with fire and police we'd have to do it by charter amendment, but we're hoping to negotiate that with them and say hey, because at some point, I mean, we've already cut -- the force and effect of the cash overtime is that we're taking 600 cops off the street, and you guys gotta know that. Six-hundred cops off the street -- that's what [ LAPD Chief Charlie] Beck has told me. The force and effect of the modified staffing plan is that there are not as many firefighters on any given day now. At a moment's notice, and you've seen we've done this, we put them back, but on any given day there's a reduced number of -- so that means, yes, you guys --
Aide: Ten percent fewer.
Villaraigosa: Huh?
Aide: Ten percent fewer. Ten percent.
Villaraigosa: Ten percent, but it also means slower response times. Of course, again, everybody now wants to go to this person, you know -- yes, it's going to mean slower response times, and ultimately that's not something we want to do. So we want to keep, protect public safety as much as possible, and I'm not doing it because, again, I've changed my stripes. I've seen the benefits of a safer city. I am a believer, and look me in the eyeball: I am a believer. I have seen the -- L.A. Live exists today not just because we ... said by hook or crook, we're going to make this happen. I'll tell you something: It exists today because it's safe down there, man. People would not be down there if it wasn't safe. And all the clubs and all the restaurants that are opening downtown exist because it's safe. And South L.A. is a different place today, and even with that there's too much crime there. What I've said there, you know, I couldn't believe that somebody said to me, don't lay off people, don't consolidate departments, don't privatize parking structures and parking meters, but by the way cut police and fire.
Uh-uh. That's the last thing we're going to cut....
Phil Willon, L.A. Times: Will you allow the LAPD to decline through attrition?
Villaraigosa: Well we're already doing that. That's why I said, hey, hold it. They're saying, hey. First of all, we made a commitment to the people when we passed the trash fee that we were grow 1,000, but I saw -- I have the public's support, by the way, I didn't have the council's support for it, so I agreed to slow it down for attrition. I thought it was the reasonable thing to do given that we were cutting the other services as much as we have. But no, I am not going beyond attrition, is the answer, until we consolidated every department, looked at every revenue opportunity, given up -- I asked for a loan, on a permanent basis, the council controlled funds. We're not cutting police and fire beyond where we are today until all of those things are done, because the most important responsibility of this city is the public safety.
You know, every one of these people have stood with me, and you've all seen them, when we announced that we've got a new class, when we announced that we're growing it, and now all of a sudden it's my ideal. Well, you know, you can't have your cake and eat it too. I am prepared to defend police hiring and attrition, and will defer the growth for now, but not forever. I expect that once we're out of this crisis, we're going to keep growing the police department.
Look, 84% -- you saw the Harvard study -- 84% support for the police. Why? Because they get to get out of their cars once in a while now. They talk to people. They realize once they're talking to people that not everybody is a criminal. The old model of policing when you have a few thousand officers, it doesn't work. It requires a very aggressive policing model, and that results in lack of community support, a lack of community collaboration, which is a big reason why we're safer. We're not just safer because there are 800 cops; we're safe because people see that we're working with them better.
I really believe that, and maybe I'm wrong. I mean, I've been wrong before, I'm wrong about a lot of stuff, right?
Goldberg: I'm sorry to belabor this, but I still don't understand what happens if the council says no to parking meters, no to parking garages, no to consolidating departments. What happens then? Every indication that we've had so far indicates that that's what they're going to say, unless they have a conversion.
Villaraigosa: I think what's going to happen is, I am going to – and if there are no concessions, real concessions and cuts – I'm going to move beyond even the number I just mentioned.
Goldberg: Beyond the thousand, 2,000?
Villaraigosa: No, I'm already going to move. There's no -- we're going to move beyond that, because remember, a lot of that, as you asked, a lot of that is going to be people that are transferred, 360 of that is people that are transferring into special funded or proprietary positions that are unfilled today. And they're unfilled because of ERIP. A lot of people from those departments also took advantage of ERIP. There's another 700 positions that are going to be relinquished because of ERIP in those departments. They'll fill up those.
So why did I identify – by the way, just so you know, only a couple hundred people have taken advantage of the opportunity to transfer until I ordered the layoffs, then 2,000 people took advantage of it. Layoffs is the only tool I have to be relevant here, otherwise I am at the mercy of forces beyond my control. I can control layoffs, I can't control that the council will pass anything. I don't have a vote on the council. And I made it clear today, and it wasn't in any way a hostile act toward any individual, but I said I will veto every council control fund, and they're all – and you haven't written about that yet, but I know you will. They're making resolutions now to spend the council controlled funds.
Maeve Reston, L.A. Times: I did write about it.
Villaraigosa: Oh you did write about it. OK, that's right, I'm sorry.
Well, there's more coming, and I can't -- the ones that already happened before I made that statement, I made it clear to everybody that we want to loan it, that money, and while I can't guarantee that they'll vote for that, I can guarantee that I will veto. We believe that they will override it my veto, but I think it will be – I think they will override it, but I think ultimately, they're going to have to understand there's no way for us to do this without those dollars, the revenue options, the cuts, there's just, it's a finite – and look, these guys know more than I do by far. I'm not making this up….
First of all, because I'm not a chest thumper, I recognize right now, the battle requires all of us to work together, even this damn newspaper of record. Excuse me, yes. I mean, that's why, I'm not using that word. And it's not because I'm avoiding – I'll tell you something, and I know you guys said it tongue and cheek, "We know he'll never do it," and I know what you meant by it, my big ego or whatever, you're right: We will never be in that situation under my watch if I have anything I can do to control it, and one thing I have are layoffs….
Robert Greene, L.A. Times: Mayor, some people have described the layoffs, the cuts, et cetera, as right-sizing the city, the implication being that for a long time the city had a payroll that it shouldn't have had, that it was performing services that it shouldn't. And there were other people who described it as a crisis, the implication being that after a set period of time, the economy recovers, we can begin to rebuild and do the things that we were doing before. What is your view of it? Which way are we going?
Villaraigosa: Is that when you guys editorialized on that? And you said that I should have said I should have some number about what the right size is. Hey, the CAO doesn't have it, the CLA doesn't have it. I don't know why I should have it. I don't know what that right number is, because frankly, as I understand it, we're not that much bigger for the number of people we have. Our budget is not that bigger, the size of our employee force as I have been told by the CAO and others. But I don't, because you said, "Well, he doesn't know," do you know what that number is? No, none of us do.
Newton: Well, but, let's be fair, mayor --
Villaraigosa: Listen, we push back.
Newton: All right, OK, me too. If you're at this enterprise, we try to suss out how much we can do, how much can we afford to do, are we doing enough, should we add people over here. It seems like in order to get to the enterprise that you want to run, you need to know what it should do.
Villaraigosa: Hey, but I'll push back. The people who are making those decisions are killing this damn newspaper.
Newton: Well OK, fair enough. But if you want to be better than that, then you've got to have some idea of what you want to do.
Villaraigosa: Well, and I'm asking them. I'm asking them.
Newton: It's a little late for that though, right?
Villaraigosa: The CAO doesn't know. We don't -- here's an example: To do the job the way, I mean, one could argue that we don't have enough employees to do all the potholes, even though I've tripled and almost quadrupled of the previous administration, all the left-hand turn signals, all the which I've done three or four times as well…. The answer is, maybe you're right, maybe I should know. Go ask (Chicago Mayor Richard M.] Daley, go ask [New York City Mayor Michael] Bloomberg if they know. I don't know anyone who knows what that right number is. I do know this: One thing that will happen when we downsize the size of this workforce, we'll see what the implications are, what the impacts are. So that's one way we're going to find out. We're going to find out that in some places the cuts were too deep, and in other cases, more than likely, they were able to handle them.
So these decisions aren't made lightly, they're not made because of some philosophical bent or ideological desire to reduce the size of government; they're made simply because we cannot sustain the size of our workforce, the cost of our payroll and pensions, and if we don't move quickly and decisively to identify new revenue options, to make these cuts and layoffs that are without question going to be part of the equation here, we will only put ourselves in a more serious financial predicament than we are in currently.
So with that I'll be more than happy to answer your questions. The one thing -- and you can put that on the record -- I push back. I think you all know that I'm not a guy who -- you know, I push back. You all have a right to ask your questions, and I have a right to push back, and I do. So with that caveat in mind, ask your questions....
Nick Goldberg, L.A. Times: Let me start this out by asking you a little bit about how you're going to get that done. I mean, last year, as I understand it, you guys went in and arranged an early retirement deal, and my understanding is that it took so long to work it out, it took so long to get the program underway that a lot of savings were lost. What can you do? ... What are you going to do this year? How are we going to get this done? What's going to keep the dickering and bickering from holding this off?
Villaraigosa: You can write whatever you want here, and again, I'm not going to go off the record because I'm just going to say what -- I hope you don't put too much of the strategy in there, but you guys write whatever, I'm not going to tell you not to -- but look: I negotiated the early retirement program. CAO comes in, he tells me, "This doesn't cost out. What are you doing? You gotta kill it." I did; he then negotiated the early retirement. He comes back to me; I said, "Hey, you're the one who told me mine was no good. What, yours isn't much better." I said I'd veto it, if you remember, he had to make $78 million in concessions, they had to go to 7%. All of that, while it was important to do, and you editorialized that it's important to remove as many of these people as humanely as possible, it also had to pay for itself. And as you know, all we paid for was the incremental cost. It is more expensive to ERIP than to lay off.
So while we did that once, and we may even do that for the other 360 employees if they pay the incremental cost, and right now they're saying they won't pay the incremental cost, what we're saying is, we can't keep ERIPing here. The fact is we can't afford that either.... I want to do this humanely, but I also -- there is a bottom line here. So it took us way too long.
Now I believe -- I'm the one that brought in win-win bargaining, as you know, and I believe in it. But in a crisis, the win-win bargaining just, it's like, molasses, and we can't afford to wait that long. What we didn't have, because we didn't know I could last time. You're probably thinking someone's going to ask, "How come you're ordering layoffs now and you didn't order them before?" I'll tell you why: Because last time, it was in the context of negotiations. You have to have an MOU, the council has to approve the MOU. With my new lawyer that just came on board, we found out, hey, guess what, you actually have the power through your general managers to order layoffs and not go to the council.
Let's be honest: What's going to happen if I have to go to the council? We're not going to approve you right now, but we may ultimately approve them, and I said that to them, and I think ultimately they'll do it, but it might not be approving them for six months, nine months, while we're negotiating. If we don't order these layoffs -- and yes, it's true, not all of these people can be laid off because with some we have an agreement that they can't be laid off until July 1. If we don't start identifying them now, it takes nine months to lay off people. It is going to be a legal battle with every single layoff, because what happens under our system, when you lay off one person that isn't necessarily the person you're laying off; they can bump all the way through the system.
So once it was clear to me that I had the power through my managers -- and all [City Attorney Carmen Trutanich] said what that I had overreached. I don't have power over the city attorney because he's duly elected, but as you know I wrote him a letter saying I still want you to lay these people off, and I said that in public at the City Council meeting. And I don't have power over the city controller, but [ Wendy Greuel] has already agreed to lay off her five. Why does he have a hundred and she have five? Look at his budget; he's got a way bigger budget; he's got a lot more people. This wasn't personal ... it was proportionate to the size of the budget....
I'm going to be ordering another 1,200 to 2,000 layoffs. If we don't start identifying the people now and go through the process, we'll never be able to get these people off the payroll quick enough. Even with that it's going to be a nine -- it'll probably be ultimately a nine month, six to nine -- they say as short as three. You know, good luck, I've never seen -- this could be a nine-month exercise. So if I don't order them now, I'll never be in a position where people -- and this is what I said, if everybody -- OK, last year we were able to get people to defer their raises. That was no small feat, but it was a deferral. We still have to pay them. In two years we're not going to have the money to pay them. We got the police to defer cash overtime. What's the force and effect of that? Taking 600 officers off the streets of L.A.; that's the force and effect of that. But it's about a $5,000 cut to their salary per year.... The firefighters: Firefighters with modified coverage -- there's no such thing as a "brown-out," because within hours we can order all those people back. There's no brown-out, please, that nomenclature is a nomenclature used by the union in order to make this something that it isn't. But there is a reduction in staffing at any given time. That reduction has resulted in firefighters getting about $1,000 a month, on average, hit to their budget. So some of them have taken some cuts....
There's no scenario where there won't be layoffs. What we're talking about is the magnitude.... So I have to announce these now, not because we're going to lay them off tomorrow, but because we have to start the process, and because the only, this is the strategy, the only way to get people to sit down and even talk about -- a 5% cut ... is $150 million, 10% is $300 million, a 15% is $450 million; $450 million is roughly the problem we have. Now, I know no union's going to be able to talk their members into a 15% cut -- I know that. But we won't even talk about a 1% cut if there aren't layoffs, because one of the things I intend to do, if I was on the school board, I told the superintendent they ought to be doing, the union has to partner with us here. They're in control of the number. If they agree to cuts, increase in pensions, the size of the layoffs doesn't have to be as great.
But at the end of the day, if everybody wants to make me look like the whatever here, I am going to make these decisions. I am not going to recoil from them. I recognize -- and you haven't said it, but I'll say it -- that I'm part of the problem. You know, the structural deficit that I began to work on kind of got beyond us. We reduced it, and then it went back up, and the fact is as much as we've gotten concessions from the unions, we should have gotten more. But I kind of learned from that. I am going to force these concessions or we are going to make the cuts now, because we cannot let time be our enemy....
David Lauter, L.A. Times: Let me ask you two things. You announced 1,000 the other day, now you're trying an additional 1,200 to 2,000. My first question would be, are you reasonably confident that that's going to be enough or do you think you may have to go deeper? And the second question is that you were talking about a sense of urgency, you'd like the unions to come to the table and give something back. What's the deadline for that? How long do they have before it becomes too late?
Villaraigosa: On the first question, $1.8 billion is roughly 18,000 employees?
Aide: That's assuming $100,000 per employee, so that would be 18,000, right?
Villaraigosa: You do the math, you're better than me.
[laughs]
Villaraigosa: But I think it's like 18,000 employees. We couldn't cut 18,000 employees from our workforce, which is why we're not just looking at layoffs. We're look at the revenue -- parking -- and what I've asked the council, by the way. Reasonable people can disagree on whether or not we should do parking meters, OK? You guys know about that experience in Chicago -- but, we're not going to study it? They wouldn't fund the study? Come on, we gotta fund the study. Let's figure out how we can structure it and maybe not get as much but protect the public too and not have gouging and maybe have, kind of, hikes that are kind of moderate over time or something. There are a lot of ways to structure it, and that's why you want to study it. So I asked them -- they gotta study it. They can't just say no to the study, because that's where the real money is. Parking garages are only one to $200 million
Aide: Sorry, can I say something about the 1.8 billion figure so that we're all clear? The $1.8 billion figure that has been bandied about the council and CAO assumes -- basically what we have is a structural deficit of about 500 million, and that is assuming that over the next three years we don't do anything to solve this structural deficit, and that all of the budgets are balanced through one-time furloughs, et cetera, and that would compound over the four years to achieve that 1.8 billion if we did nothing, which is why the mayor is taking action right now, to prevent that from being reality.
Villaraigosa: That's a good point, thank you for that, and I meant to say that at the council.... Obviously if we make these now we won't have a $1.8 billion deficit. But I mean look: Even with the decisions we made with the early retirement, which also reduced -- that number would have been greater it would have been two-point-something, had we not done the ERIP, because that removed people from pensions, salaries as well. It has a structural impact....
Lauter: Timetable? How long do they have?
Villaraigosa: Well, under the agreement they have 40 days from when we initiated it, and I think --
Aide: Twenty days.
Villaraigosa: Twenty days ... or we're going to move -- we're already moving on them....
Lauter: But I hear you saying, if I'm understanding you correctly, that several thousand additional layoffs would be necessary if the council isn't willing to go along with at least some of the other revenue-raising proposals that you've talked about.
Villaraigosa: I think they're going to have to agree to all of them. I think we're going to have to agree to all of them, we're going to have to do them quickly, we're going to have to -- but not just that -- we're going to have to cut. There will be some layoffs. It's not just the revenue options, people are going to have to take cuts. They have to agree to take cuts and raise their pensions ultimately....
We intend to balance next year's budget so that we're not in a position of having a $1.8 billion structural deficit. But we have to balance it not with one-time, but with decisions that affect the structural deficit.
Dan Turner, L.A. Times: You mean, basically, in order to get the union to go along with salary cuts, you have to give them more generous pension benefits, right?
Villaraigosa: No. We're going to have to raise the pensions --
Turner: What do you mean by raise the pensions?
Villaraigosa: Raise the contributions.
Turner: I thought you meant raise the benefits.
Villaraigosa: We can do that, by the way -- I know you guys wanted us to do, and this is where I push back. You can't say on the one hand --
Newton: We're not really pushing against you.
Villaraigosa: On one hand, put it on the ballot, then I raise money, and then all of you are checking who I raise money from, and I'm fighting to, you know, $8 million campaign? Of course I don't want to put it on the ballot. I mean, somebody ought to think through that. Yeah, I'm not going to, because you're going to beat -- no matter what I do, I'm going to get it.
So I'd rather, I told the council, you could pass by ordinance for civilians -- for new people, not for current. We have to negotiate with them for current. But for new people you could pass it by ordinance, so why put it on the ballot so that I'm involved in an $8 million campaign that, you know, and they're going to make it -- and by the way, just so you know, I've polled it. You would think people are for it, but they're not. They're all getting beat up. They're not for layoffs, they're not for cutting services, they're not for raising pensions. You would think they would be because a lot of them don't have pensions like that. But I polled it -- this is, these are, it's much better to do it by ordinance. Now, with fire and police we'd have to do it by charter amendment, but we're hoping to negotiate that with them and say hey, because at some point, I mean, we've already cut -- the force and effect of the cash overtime is that we're taking 600 cops off the street, and you guys gotta know that. Six-hundred cops off the street -- that's what [ LAPD Chief Charlie] Beck has told me. The force and effect of the modified staffing plan is that there are not as many firefighters on any given day now. At a moment's notice, and you've seen we've done this, we put them back, but on any given day there's a reduced number of -- so that means, yes, you guys --
Aide: Ten percent fewer.
Villaraigosa: Huh?
Aide: Ten percent fewer. Ten percent.
Villaraigosa: Ten percent, but it also means slower response times. Of course, again, everybody now wants to go to this person, you know -- yes, it's going to mean slower response times, and ultimately that's not something we want to do. So we want to keep, protect public safety as much as possible, and I'm not doing it because, again, I've changed my stripes. I've seen the benefits of a safer city. I am a believer, and look me in the eyeball: I am a believer. I have seen the -- L.A. Live exists today not just because we ... said by hook or crook, we're going to make this happen. I'll tell you something: It exists today because it's safe down there, man. People would not be down there if it wasn't safe. And all the clubs and all the restaurants that are opening downtown exist because it's safe. And South L.A. is a different place today, and even with that there's too much crime there. What I've said there, you know, I couldn't believe that somebody said to me, don't lay off people, don't consolidate departments, don't privatize parking structures and parking meters, but by the way cut police and fire.
Uh-uh. That's the last thing we're going to cut....
Phil Willon, L.A. Times: Will you allow the LAPD to decline through attrition?
Villaraigosa: Well we're already doing that. That's why I said, hey, hold it. They're saying, hey. First of all, we made a commitment to the people when we passed the trash fee that we were grow 1,000, but I saw -- I have the public's support, by the way, I didn't have the council's support for it, so I agreed to slow it down for attrition. I thought it was the reasonable thing to do given that we were cutting the other services as much as we have. But no, I am not going beyond attrition, is the answer, until we consolidated every department, looked at every revenue opportunity, given up -- I asked for a loan, on a permanent basis, the council controlled funds. We're not cutting police and fire beyond where we are today until all of those things are done, because the most important responsibility of this city is the public safety.
You know, every one of these people have stood with me, and you've all seen them, when we announced that we've got a new class, when we announced that we're growing it, and now all of a sudden it's my ideal. Well, you know, you can't have your cake and eat it too. I am prepared to defend police hiring and attrition, and will defer the growth for now, but not forever. I expect that once we're out of this crisis, we're going to keep growing the police department.
Look, 84% -- you saw the Harvard study -- 84% support for the police. Why? Because they get to get out of their cars once in a while now. They talk to people. They realize once they're talking to people that not everybody is a criminal. The old model of policing when you have a few thousand officers, it doesn't work. It requires a very aggressive policing model, and that results in lack of community support, a lack of community collaboration, which is a big reason why we're safer. We're not just safer because there are 800 cops; we're safe because people see that we're working with them better.
I really believe that, and maybe I'm wrong. I mean, I've been wrong before, I'm wrong about a lot of stuff, right?
Goldberg: I'm sorry to belabor this, but I still don't understand what happens if the council says no to parking meters, no to parking garages, no to consolidating departments. What happens then? Every indication that we've had so far indicates that that's what they're going to say, unless they have a conversion.
Villaraigosa: I think what's going to happen is, I am going to – and if there are no concessions, real concessions and cuts – I'm going to move beyond even the number I just mentioned.
Goldberg: Beyond the thousand, 2,000?
Villaraigosa: No, I'm already going to move. There's no -- we're going to move beyond that, because remember, a lot of that, as you asked, a lot of that is going to be people that are transferred, 360 of that is people that are transferring into special funded or proprietary positions that are unfilled today. And they're unfilled because of ERIP. A lot of people from those departments also took advantage of ERIP. There's another 700 positions that are going to be relinquished because of ERIP in those departments. They'll fill up those.
So why did I identify – by the way, just so you know, only a couple hundred people have taken advantage of the opportunity to transfer until I ordered the layoffs, then 2,000 people took advantage of it. Layoffs is the only tool I have to be relevant here, otherwise I am at the mercy of forces beyond my control. I can control layoffs, I can't control that the council will pass anything. I don't have a vote on the council. And I made it clear today, and it wasn't in any way a hostile act toward any individual, but I said I will veto every council control fund, and they're all – and you haven't written about that yet, but I know you will. They're making resolutions now to spend the council controlled funds.
Maeve Reston, L.A. Times: I did write about it.
Villaraigosa: Oh you did write about it. OK, that's right, I'm sorry.
Well, there's more coming, and I can't -- the ones that already happened before I made that statement, I made it clear to everybody that we want to loan it, that money, and while I can't guarantee that they'll vote for that, I can guarantee that I will veto. We believe that they will override it my veto, but I think it will be – I think they will override it, but I think ultimately, they're going to have to understand there's no way for us to do this without those dollars, the revenue options, the cuts, there's just, it's a finite – and look, these guys know more than I do by far. I'm not making this up….
First of all, because I'm not a chest thumper, I recognize right now, the battle requires all of us to work together, even this damn newspaper of record. Excuse me, yes. I mean, that's why, I'm not using that word. And it's not because I'm avoiding – I'll tell you something, and I know you guys said it tongue and cheek, "We know he'll never do it," and I know what you meant by it, my big ego or whatever, you're right: We will never be in that situation under my watch if I have anything I can do to control it, and one thing I have are layoffs….
Robert Greene, L.A. Times: Mayor, some people have described the layoffs, the cuts, et cetera, as right-sizing the city, the implication being that for a long time the city had a payroll that it shouldn't have had, that it was performing services that it shouldn't. And there were other people who described it as a crisis, the implication being that after a set period of time, the economy recovers, we can begin to rebuild and do the things that we were doing before. What is your view of it? Which way are we going?
Villaraigosa: Is that when you guys editorialized on that? And you said that I should have said I should have some number about what the right size is. Hey, the CAO doesn't have it, the CLA doesn't have it. I don't know why I should have it. I don't know what that right number is, because frankly, as I understand it, we're not that much bigger for the number of people we have. Our budget is not that bigger, the size of our employee force as I have been told by the CAO and others. But I don't, because you said, "Well, he doesn't know," do you know what that number is? No, none of us do.
Newton: Well, but, let's be fair, mayor --
Villaraigosa: Listen, we push back.
Newton: All right, OK, me too. If you're at this enterprise, we try to suss out how much we can do, how much can we afford to do, are we doing enough, should we add people over here. It seems like in order to get to the enterprise that you want to run, you need to know what it should do.
Villaraigosa: Hey, but I'll push back. The people who are making those decisions are killing this damn newspaper.
Newton: Well OK, fair enough. But if you want to be better than that, then you've got to have some idea of what you want to do.
Villaraigosa: Well, and I'm asking them. I'm asking them.
Newton: It's a little late for that though, right?
Villaraigosa: The CAO doesn't know. We don't -- here's an example: To do the job the way, I mean, one could argue that we don't have enough employees to do all the potholes, even though I've tripled and almost quadrupled of the previous administration, all the left-hand turn signals, all the which I've done three or four times as well…. The answer is, maybe you're right, maybe I should know. Go ask (Chicago Mayor Richard M.] Daley, go ask [New York City Mayor Michael] Bloomberg if they know. I don't know anyone who knows what that right number is. I do know this: One thing that will happen when we downsize the size of this workforce, we'll see what the implications are, what the impacts are. So that's one way we're going to find out. We're going to find out that in some places the cuts were too deep, and in other cases, more than likely, they were able to handle them.
Friday, February 12, 2010
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