The provisions call for increasing the employee retirement contributions from 6% to 11%, healthcare from zero to 2% – rising to 4% next year – and elimination of cash overtime. The expected savings amount to $400 million over the next four years.
Based on this limited information, there is only a little to cheer about. Los Angeles is facing a $400 million deficit through next year alone, so savings of $100 million per year barely make a dent in the problem.
The elimination of cash overtime sound a lot like a cost deferral – not a savings. I assume employees will earn vacation in lieu of paid overtime, but a liability is incurred if that is the case.
More detail is needed before further comments.