After nearly nine hours of discussion on top of weeks of deliberations and input from city officials and the public, the Los Angeles City Council Wednesday approved a $6.9 billion budget for the fiscal year that starts July 1.
The budget closes much of the city's $336 million deficit by offering police paid time off instead of overtime, redeploying firefighters and lowering the city's share of retiree health care costs.
It also includes a one-time transfer of $18 million from a parking revenue fund to the city's general fund and allows for the re-opening of public libraries on Mondays while preserving some money for summer jobs for low-income youths.
The council eliminated a proposal by the mayor to take out about $43 million in low-interest loans to pay for some city operations. Instead the city called for the police department to endure an additional $21 million in cuts through salaries, pension contributions or other ways.
"We rejected balancing this budget on borrowing. We rejected balancing the budget by taking police off the streets," said City Council President Eric Garcetti. "I think today's vote was primarily about public safety, about not furloughing cops, not closing fire stations."
Despite projected revenue increases from business, property and hotel taxes, city officials expect a $280 million budget hole in the 2012-13 fiscal year, largely from increasing pension costs.
"I would like to thank the City Council for their careful deliberation of the city budget and thoughtful recommendations," Mayor Antonio Villaraigosa said. "I will review their actions thoroughly and am confident that the ultimate resolution will serve the best interests of the people of Los Angeles."
The council amended sections of the budget today, including the controversial fire department deployment plan that angered community activists in Pacific Palisades, Wilmington and the northwest San Fernando Valley.
While avoiding any layoffs and fire station closures, the plan cuts the department's budget by $54 million via the elimination of 18 fire companies -- small groups of firefighters that man trucks and ambulances -- across the city.
Garcetti said the plan will "immediately increase fire service to the people of Los Angeles and reduce crucial paramedic response times. But I believe we can go further than what we had initially presented to us ... We need to do more to increase fire service in good times."
Garcetti and Councilman Tom LaBonge sponsored amendments today to prevent the elimination of 318 positions from becoming permanent and to create a mechanism for the city to give the department more money in the future as it comes in.
Specifically, the city will give LAFD $7 million it would otherwise save if firefighters agree to begin paying 2 percent of their salaries toward retirement health care.
"The larger the department, the better and more able we are to respond," said fire Chief Millage Peaks, adding that the department is happy with its new deployment plan even if it does not get any additional money.
"It's more efficient. It's leaner. It's more responsive," he said. "We feel that what we've got is going to be able to provide the level of service and protection that our residents expect."
Asked which of the 18 fire companies would be added back if the department does get more money, Peaks said: "I'm not sure what resources we're going to add back. We're going to need to get back to the analysis to find out what is truly in the best interest of public safety. It could be ambulances. It could be fire engines. It could be fire trucks. None of it's going into administration."
Since Villaraigosa's budget proposal was released, the Budget and Finance Committee held almost 50 hours of hearings, during which department heads pleaded their cases and urged the council to restore or maintain their budgets.
The police department takes the most significant hit, a $120 million cut mostly through reduced overtime pay. But as officers retire, the LAPD can hire to maintain the size of the force, which is just shy of 10,000.
"This is a long-term solution for public safety in Los Angeles," Chief Charlie Beck said.
"The continuing of hiring of police officers makes us strong enough that we can not only respond to an emergency, but that I can flex officers to accommodate crime trends," he said. "If we don't hire, and all we have is overtime, that's a very temporary solution, which will cost us in the long run."
The city also lowered its pension obligations by negotiating deals with at least one of its unions. Those workers will begin contributing 4 percent of their salaries to retirement health care.
The city is in negotiations with unions representing police and firefighters' unions to get similar concessions.
Other city workers who rejected deals will have their retirement health care subsidies frozen and be forced to cover any future increases. They are also subject to up to 36 furlough days. "The only thing I would like to see us improve on this budget as we go through the year is I really feel we have got to do something to reduce the impact on recreation and parks," said Councilman Bernard Barks, chairman of the Budget and Finance Committee.
He was referring to a $19 million reduction in the Recreation and Parks Department's budget.
Neighborhood Councils and the City Council both saw their budgets reduced by 10 percent.
Villaraigosa has five days to veto parts of the budget. The City Council can then override or uphold the mayor's changes.
Under the city charter the budget must be finalized by June 6.