City of L.A. Headed for Precipice
Los Angeles, CA May 23, 2009
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City of L.A. Headed for Precipice
One of L.A. 's biggest pensioners warns of the costs
L.A. 's biggest pensioner is also its harbinger of doom. As retired LAPD chief, Bernard Parks earns a $265,090 annual pension. As the City Council's budget chief, he collects a $178,789 salary and warns pension obligations could bankrupt the city.
By Rich Connell
May 20, 2009
Los Angeles Councilman Bernard Parks, City Hall's budget committee chief who is warning that soaring payroll and pension costs threaten the city's financial stability, receives $22,000 a month in city retirement benefits, in addition to his $178,789 a year salary, records and interviews show.
A former Los Angeles Police Department chief who served 38 years on the force, Parks operates in a sensitive political role, heading the key council panel that has grappled with a recession-driven $530-million budget shortfall.
While collecting one of the city’s biggest pensions -- about $265,000 per year -- plus a hefty city salary, he has overseen a contentious debate about which services and jobs to cut.
"I don't discuss my salary or my pension and I earn both of them," Parks said in a brief phone conversation.
Pension outlays are a growing concern for budget planners. The city could face a $1-billion budget shortfall in 2010-2011, and an even larger deficit the year after, chiefly because of pension investment losses, according to the city's top budget analyst.
Some critics contend packages like Parks' underscore the need for broader reform, particularly given the current financial stress on taxpayers and public agencies. "The term is double dipper. And it's legal . . . he earned a pension under the laws as they exist," said Jack Dean, a board member with the California Foundation for Fiscal Responsibility, which wants new controls on public-sector retirement plans. But "the main concern is, all of the formulas . . . are unsustainable," he said. "Pensions are the calamity that is about to befall us."
City-employee unions dispute that, saying they will help solve the pension problems, including negotiating a possible early retirement package and increases in employee contributions. But benefits should not be cut, partly because city workers don't receive Social Security retirement payments, said Barbara Maynard, spokeswoman for the Coalition of LA City Unions.
"There are going to be those very highly paid [public employees] who end up with large pensions," she said. But people should not "use public sector workers and retirees as political footballs. These are real people retiring on an average of $40,000 a year," she said. City civilian retirees average $3,319 a month in pension payments; police and fire pensioners average $4,486, officials said.
Parks has highlighted the pension funding problem, particularly as it relates to Mayor Antonio Villaraigosa's drive to hire more police officers.
In an "urgent message" posted on his website before this week's budget hearings, Parks noted that city revenues are down sharply. "Concurrently, the city's payroll and pension costs have soared. We have reached a breaking point. If significant structural changes are not implemented quickly, the city's financial solvency is at significant risk."
Under the mayor's hiring plan, he wrote, "our pension program will become unsustainable, not only for sworn employees, but for civilian employees as well."
Parks' own pension is nearly 30% more than the next highest recipients from police, fire and general government agencies. Former LAPD Deputy Chief David Gascon and former Los Angeles International Airport General Manager Jack Driscoll receive $206,000 and $205,000 respectively, records show. Figures for the city's quasi-independent Department of Water and Power, which operates a separate pension system, were not immediately available.
Parks collected $18,549 per month, or 90% of his final salary, beginning in 2002, said William S. Raggio, chief management analyst with the police and fire pension fund. Yearly cost-of-living increases have boosted the payment to $22,090.97 per month.
In all, nearly 600 people receive city pensions in excess of $100,000 a year, according to figures obtained from the city by The Times. They were recently prepared in response to public records requests filed by Dean's group. The group previously has called attention to nearly 5,000 other local government and state pensioners collecting six-figure annual payments. Topping that list was former Vernon City Administrator Bruce Malkenhorst Sr., who has been accused of embezzling city funds and collects $500,000 a year in pension benefits.
"It's unfortunate that critics would try to paint a sticker shock on all government workers, which is unfair," said Pat Macht, spokeswoman for CalPERS, the state's public pension fund.
"Our goal is not to single out the average person," Dean said. But he added, "We have to change the laws that determine how pensions are calculated and handed out."
Copyright 2009 Los Angeles Times
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