JOB-FREEZE MELTDOWN DESPITE HIRING HALT, CITY OKS $22 MILLION FOR 400 WORKERS.

Byline: Harrison Sheppard Staff Writer

Despite a job freeze that was supposed to put a clamp on city spending, Los Angeles city officials have exempted some 4,000 positions over the past six months and authorized filling 400 of them at a cost of $22 million, a Daily News review found Tuesday.

The mayor and City Council approved the nonemergency hiring in the face of a growing budget shortfall, even though the exemptions potentially represented $130 million or more in salary costs that could have been saved over the past six months and in the next few years.

On Tuesday, in the face of likely cuts in funding because of the state's $35 billion shortfall, Mayor James Hahn acknowledged the extent of the problem by ordering a new clampdown on hiring and eliminating any exemptions for positions that haven't yet been filled.

The mayor's staff defended approving extensive exemptions because it believed that the city's economic picture seemed to be improving.

``When the first hiring freeze was put in place, it was after Sept. 11, and we were looking at a $250 million hole in the budget we needed to close,'' said Hahn spokeswoman Julie Wong. ``The economy changes throughout the year and adjustments can be made.''

Now, however, the picture has worsened again, as Gov. Gray Davis announced a new series of budget cuts last week that will result in reductions of at least $300 million to the city budget in the next 18 months.

For city departments, the mayor's new freeze order is deja vu, of sorts. He issued a similar order for a ``hard'' freeze in January 2002 with nearly the same provisions, and while it was never formally rescinded, it became watered down as department heads sought, and were granted, thousands of exemptions.

The Daily News reviewed more than 300 requests for hiring freeze exemptions in this fiscal year - since July 1, 2002.

The review showed that the City Council has authorized more than 400 vacant positions to be filled, at a salary cost of an estimated $22 million. The council also exempted an additional 3,600 positions to be filled as they become vacant in the future, for approximately $110 million. In both those categories, about $17 million in salary was funded by grants and special funds that could not have been used for any other purpose.

For the most part, the council approved the requests unanimously and without discussion, except in committees. The records don't indicate any requests that were rejected by the full council.

Councilman Dennis Zine, who chairs the council's Personnel Committee, which evaluates hiring freeze exemption requests, said the council had been ``relaxing'' the freeze before Tuesday. He said his committee was not a ``rubber stamp,'' scrutinized each request that came in and did not grant blanket requests to continually refill positions but required that they come before the council each time they become vacant.

``While we had scrutinized the requests previously, we will be dissecting the future requests,'' Zine said. ``They have to be an extreme emergency.''

Hahn's new order re-emphasizes that hiring will stop in every department, except for sworn police officers, firefighters and trash collectors. The new order also wipes out all exemptions that have been granted previously in which the positions have not yet been filled - as did the hard freeze he ordered a year ago.

The new freeze also clamps down on equipment purchases, stops hiring for grant-funded positions and, while leaving open the possibility for more exemptions, signals a harder scrutiny for those requests.

A spokeswoman in City Administrative Officer Bill Fujioka's office, which was responsible for overseeing the hiring freeze, said officials recommended the exemptions because at the time, the city could afford them. It was not until last week, when the governor announced billions of dollars in budget cuts, that city officials learned the problem was worse than they thought.

``We were fine right up until Friday,'' said assistant CAO Ellen Sandt.

While they were certainly tracking the state budget crisis, Sandt said, the governor's plan ``caught us off guard'' because earlier indications from Davis were that he wasn't planning to cut the vehicle license fee payments to cities. But he did cut it - to the tune of $70 million for Los Angeles this year and $175 million next year.

Fujioka said he is next going to look at hiring in the police and fire departments, which have been exempt from the beginning for sworn positions. With a new chief and other changes in the Police Department, hiring and retention has far exceeded what was expected by at least $30 million, and Fujioka said he might have to look at ways to curtail those costs.

``I'm asking the council to give me two weeks to come back with a hiring plan for police and fire sworn positions,'' Fujioka said. ``At the current rate, they're exceeding what's in the budget. I want to bring them back in line with the budget.''

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SOURCE: Daily News Research