PUBLIC ENEMY NO. 1: BONUSES MAYOR SAYS WORKERS' SKYROCKETING EXTRA PAY HIS TOP TARGET FOR CUTS.

Byline: Lisa Mascaro and Dan Laidman Staff Writers

Employee bonuses at City Hall have quadrupled in five years to more than $117 million annually - one of 10 target areas that Mayor Antonio Villaraigosa identified Wednesday as he works to narrow a $300 million budget shortfall.

Flanked by Controller Laura Chick and Councilman Bernard Parks, Villaraigosa homed in on bonuses, workers' compensation costs, surplus property and other targets for saving some $30 million.

``We're digging deep, we're tightening our belts, and we're asking the tough questions of our general managers,'' Villaraigosa told reporters at a City Hall press conference.

``These are just 10. There are many more. I'm hopeful that each will generate savings to help us balance our budget.''

With his fiscal 2006-07 financial plan set for release next month, the mayor has said city government faces ``dire'' consequences if it continues to overspend its $6 billion budget.

Employee unions have downplayed the dismal forecast as a typical strategy on the eve of contract negotiations, but Villaraigosa says the deficit could grow to $450 million by 2011 if something isn't done now.

Heading the mayor's top 10 list were employee bonuses, which have skyrocketed from $27.7 million in 2001 to $117.2 million in 2005.

Chick released an audit in December that recommended tightening the bonus system to end unjustified payments - as when a worker received a bonus from a previous position after his job has changed.

The Daily News had filed a California Public Records Act request last month requesting the information on city bonuses, but officials said the release of the figures Wednesday was coincidental.

``People haven't been appropriately monitoring these bonuses,'' Villaraigosa said. ``We should have tracked that and monitored it better. ... That's what we're going to do now.''

Villaraigosa this week ordered department heads - including the police chief, fire chief and top manager in General Services - to review their bonus systems.

But Julie Butcher, president of Service Employees International Union, Local 347, which represents 10,000 blue-collar municipal workers, called the attack on bonuses petty since terms are detailed in union contracts.

City government offers 300 types of bonuses, including uniform allowances, night-shift differentials and premiums for bilingual workers.

``It's an insult to the workers,'' Butcher said. ``Every single one of these has been negotiated with them - the employer.''

Officials said they've managed to squeeze $33 million from the 10 targeted areas and hope to save at least $20 million more.

The biggest savings has been $16.7 million in workers' compensation costs, which officials hope will continue next year.

Officials also have generated $16 million by collecting $9 million in overdue loans from the general fund to city departments and $7 million from Recreation and Parks surplus funds - with $5 million of the money set aside to fix city pools.

Additional revenue could come from selling off as many as 300 surplus properties.

Villaraigosa has criticized former city officials for using property sales and other one-time revenues to balance the annual budget in a way that masks the structural deficit. However, he said Wednesday that he would use one-time money only for one-time expenditures or to beef up the city's cash reserves.

He has pledged to eliminate the structural deficit - estimated at $295 million this fiscal year and $271 million for the year starting July 1 - over the next five years.

Despite the heavy budget shortfall, Villaraigosa reiterated his vow to continue hiring police officers. However, since the Los Angeles Police Department has been unable to recruit as many officers as planned, some of the money left from the $24.8 million allocated this year could be diverted to other departments.

Butcher questioned what, if anything, is new in the mayor's plan, noting that his proposal to generate savings through a workers' compensation arbitration program with her union had been agreed to more than a year ago.

Still fiscal watchdogs welcomed the mayor's crackdown on expenses.

``I personally appreciate the mayor's effort to put pressure on the general managers because it is somewhat unwieldy from the council position to bring accountability,'' said Parks, who chairs the council's Budget and Finance Committee.

Former mayoral candidate Bob Hertzberg, whose campaign included calls for fiscal responsibility, said voters need to believe their tax dollars are being well spent.

``A big piece of the process is not just money; it's inspiring confidence. People don't have confidence they (city officials) are spending your tax dollars wisely,'' he said. ``You've got to be hyper-focused in the attention to detail.''

Councilman Tom LaBonge said that while there are many hard-working employees in the city, there is room for improvement.

``I'm glad he's looking at all of this,'' he said. ``The efficiency comes when we work harder.''

Lisa Mascaro, [phone]

lisa.mascaro(at)dailynews.com

LOOKING FOR SAVINGS

Here are the 10 areas that Mayor Antonio Villaraigosa targeted Wednesday as potential methods to narrow the budget deficit:

--Review employee bonuses.

--Reduce workers' compensation costs.

--Sell surplus property.

--Increase use of fuel-efficient vehicles.

--Review routine supply costs for missed discounts.

--Boost collection of delinquent tax accounts.

--Increase collection of outstanding loans to city departments.

--Collect surplus Recreation and Parks Department funds.

--Reduce health care costs by buying in bulk with other government agencies.

--Upgrade financial management technology.

CAPTION(S):

box, chart

Box:

LOOKING FOR SAVINGS (see text)

Chart:

Big city bonuses

SOURCE: Office of the Controller, City of Los Angeles 

Daily News