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The city of Los Angeles may have to take more drastic steps to avoid going bankrupt within the next year. Among the ideas on the table: laying off nearly a thousand employees and forcing remaining workers to take almost a month off without pay.
About 200 union workers crowded into council chambers Tuesday morning, voicing their support for the 'incentive program.' The City Council was supposed to take action on it Tuesday, but instead, negotiations continued.
A decision is expected Wednesday.
Depending on what's crafted, it could result in furloughs for nearly every city employee -- that means pay cuts. Depending on how it ends up, it could result in layoffs in the police department, according to the mayor's office.
The City Council was expected to discuss measures to reduce payroll costs at city fire and police departments. City officials are recommending LAPD's 10,000 officers take 18 furlough days, laying off 300 police cadets, and freezing police hiring.
The city could be out of money by next May. The city is going more than a million dollars over budget each day. L.A. City Controller Wendy Greuel says the city would be bankrupt within eight months unless its payroll costs are drastically reduced.
Mayor Antonio Villaraigosa met with the City Council behind closed doors Tuesday. He told the council that he would veto an early-retirement package both he and the unions had agreed to in June. The mayor and city budget officers decided the retirement plan would be too expensive.
Under the deal, more than 22,000 city employees -- including maintenance workers, accountants, librarians and others -- would forgo scheduled pay raises until 2011 in exchange for protection from layoffs and furloughs.
Also part of the deal was an early retirement incentive program that called for offering cash bonuses to about 2,400 employees so that they would agree to retire up to five years early and reduce the city's payroll costs.
Mayor Villaraigosa has been accused of reneging on a promise, a promise he said he would keep. But he said that things have changed since then, with a $75-million drop in tax revenue.
"Given the numerous changed circumstances ... these tentative agreements are no longer financially viable. I can no longer support the early retirement incentive proposal or the tentative Letter of Agreement with the coalition of city unions," the mayor said in a statement.
Some city employees say the retraction is unacceptable.
"It just doesn't make sense. It's not good for the city, it's not good for city services," said Roy Stone, president of the Librarians' Guild. "It's not good for the city financial budget because fewer people working, or getting retirement, means people not spending money in the city."
The council and the mayor are faced with difficult choices. City workers are faced with a potential loss of wages, and their jobs.
"They have real families and they have real kids today -- they need their money today," said Michael Hunt, a city employee. "Not furloughs -- but they need to work. They need to take care of their families."
"Workers have given up money, they have given up their wages," said Cheryl Parisi, president of AFCSME Local 36. "We proved to the city leadership that we are prepared to continue to problem-solve in order that city services continue to be provided to communities. We consider it a complete failure of leadership to move into a direction where the budget crisis is managed simply through the tool of layoffs and furloughs."
City administrators negotiated through the weekend with the coalition of city unions, but were unable to reach a new agreement.
The unions and the City Council met late Monday night trying to come up with an alternative. The unions say they came up with $60 million in extra savings. Those include things like not taking one paid holiday.
But according the city number crunchers, it would only save about $11 million.
Eyewitness News Reporters Lisa Hernandez and John North contributed to this report.