$40 MILLION DEAL; L.A., COPS TO SETTLE OT CASE.

Byline: Dominic Berbeo Staff Writer

After six years of fighting the city's biggest lawsuit ever, Los Angeles officials said Monday they are close to reaching a settlement in a dispute involving overtime pay in the 1992 riots, a case that could cost the city up to $40 million.

Officers claimed they were not paid the overtime for months after the riots and were not allowed to take compensatory time off instead of overtime in a timely manner.

City attorneys and those representing the police estimate damages in the case in the neighborhood of $40 million, which would be the biggest city loss ever in a suit, according to the City Attorney's Office.

That amount does not include $1.3 million the city has spent on time for private attorneys and city attorneys plus $470,000 more to update the LAPD overtime computer system, city records show.

In bracing for the big loss in the overtime case, the City Council set aside in this year's budget a record high $60 million in the reserve account.

Pushing the negotiations with new urgency is the expiration of the police contract in January, the need for 75,000 hours of police overtime for Y2K precautions this New Year's Eve and the Democratic National Convention in August.

``I hope that as a result of this case there will be a clear overtime policy established,'' said Police Protective League Director Dennis Zine. ``We hope we don't have to drag the overtime issue into contract negotiations.''

The case, Kimpel vs. Williams, is expected to change the way officers are paid overtime.

Officers have complained for years about being paid weeks or even months late for overtime, Zine said. And when the department decides to pay them with time off instead of cash, there is no guarantee they can take the time off when they want.

Over the last few weeks, the two sides have been involved in a flurry of confidential settlement talks which could finally bring the case to an end. A judge in the case issued a gag order, sharply limiting what attorneys can disclose.

But City Councilman Mike Feuer, an attorney who heads the Budget and Finance Committee and a candidate for city attorney, said he hopes the lawsuit is settled soon because it stands in the way of tackling other important issues.

``I think there are finally some meaningful prospects of settlement now,'' he said. ``Negotiations in the coming days will be extremely important.''

He said one benefit of a settlement would be the spelling out of a clear overtime policy, which is important in avoiding similar suits in the future, given the fact that overtime is ``a natural part of police work.''

Council member Jackie Goldberg, chairwoman of the Personnel Committee, said she believes a settlement is near that will put the city in compliance with Fair Labor Standards Act.

``We thought we were in compliance with FLSA,'' she said, ``we honestly did, and that may not be an accurate assessment. So maybe we need to ensure that we are.''

The City Attorney's Office decided six years ago to fight the lawsuit, holding steadfast to the view that the city paid riot overtime late because it had to wait for Federal Emergency Management Agency funds to cover the costs, and that compensatory time should be considered paid at the time it's put on the books.

But on Feb. 4, 1999, U.S. District Judge George H. King issued an order in the officers' favor that compensatory time off is not paid when booked. He concluded that the compensatory time is considered ``unpaid overtime compensation,'' making it subject to the labor standard act overtime rules, which say the employer must allow the employee to use the compensatory time off within a reasonable period of time if doing so won't disrupt the agency's work.

In his order, King made the analogy of the city paying officers with compensatory time off and then keeping them from taking time off as being similar to a boss who pays employees by depositing their checks in an account and then denying them access to the account.

Unlike other city employees, sworn officers are paid based on a 28-day deployment period with overtime kicking in after the first 171 hours. Officers receive paychecks every two weeks.

But a special master assigned to assist King with the case has concluded the LAPD should be able to develop a system in which overtime is calculated and paid for each two-week period.

So far, 6,344 officers (most of the sworn force in 1993) have signed up as plaintiffs in the suit, and are seeking damages and attorney fees plus a change in the way the city pays police overtime, said Greg Petersen, the lead attorney representing the officers in the class-action suit.

He said some officers have racked up hundreds of hours of comp time but have not been able to take time off because supervisors tell them they can't be spared.

If the officers prevail in the lawsuit, they may be eligible not only for liquidated damages equal to the amount paid late following the riots, but additional damages based on late overtime payments since then, which could amount to tens of thousands of dollars each for many of the officers, according to court documents.