According to city controller Kenneth Mejia, the spending errors add to the city’s ongoing fiscal crisis.
Overpayments come when the city’s financial situation is “disastrous” as it faces a $1 billion budget deficit and layoffs of hundreds of staff.
Recently, “We’ve seen that we’re making more than we’ve contractedly contributed to police pension contributions,” Mezia said.
According to Mejia, the city’s pension costs are nearly 20% of general fund expenditures.
As a controller, Mejia is the city’s Chief Accounting Officer, Auditor and Paymaster.
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Under the contract, starting the salary for new police recruits was an increase of $86,193, a 12.6% increase, offering four salary increases of 3% over the next four years.
As part of the deal, the city and police union agreed that salary increases and bonus payments for officers for less than 20 years will not be outlined in pension contribution calculations, according to Mezia.
According to current city administrators, then Chief Executive Matthew Sabo, Matthew Sabo, told city councillors it was very expensive for the city to make additional pension payments related to pay raises and bonuses.
“Well, he was right,” Mezia said. “This is difficult to manage financially.”
According to the city’s controller, the city usually donates nearly 40% of the wages of police employees to its pension accounts.
Los Angeles City Hall on August 7, 2024. John Fredrix/Epoch Times
Mezia said employees contribute 8-11%.
Pension contributions are then invested and the funds are used to pay current and future retirees.
However, the city dealt with wage increases and bonuses as part of the total amount eligible for pension contributions this fiscal year. Police employees did not donate shares because they had no contracts.
As a result, cities with approximately $40 million in general funds have been overpaid from July 1, 2024 to July 1, 2024, according to Mejia.
“No one is talking about pensions at City Hall due to complexity,” Mezia said. “That means pension costs have not been checked.”
In the video, Mejia doesn’t discuss the possibility of money being caught, but concludes by reminding viewers that May 21 is the last day they’ll make public comments about the city’s budget. The budget meeting is at 10am at City Hall.
“I hope you all get there early,” he said.
LAPD also reported the city’s proposed budget for fiscal year 2026, starting July 1, including the exclusion of 403 civilian statuses or the approximately 15% of private workers, including crime scene photographers, evidence specialists and forensic printing professionals.
If the budget passes as is, the department will be forced to close prisons in Hollywood, Pacific and ports.
The city council proposed a $13.9 billion budget on May 16th and held a hearing on May 20th to discuss the amendments. The budget includes layoffs for 650 proposed staff.
In April, Mayor Karen Bass’ office denounced the city’s deficit on declining revenues and volatile stock markets, uncertainty in Washington, delayed tourism after the pandemic, recent wildfire damage and downward economic trends resulting from paying personnel costs and liability.
She also said the outlook for the city is still positive.
“This budget will continue to advance key challenges such as reducing homelessness and crime, and continue to invest in promoting driving change, including balancing urban finances and common sense integration of related sectors,” Bass said in a statement. “Homelessness is declining. Crime is declining. These are tough challenges and our progress shows that we can do anything in this city with its endless possibilities.”
Bass’s Office did not reply to requests for comment on pension overpayments at each publication time.
