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Villaraigosa, LA Unions Reach Deal On Pension, Health Costs

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(credit: Spencer Platt/Getty Images)

(credit: Spencer Platt/Getty Images)

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LOS ANGELES (CBS) — Los Angeles Mayor Antonio Villaraigosa has reached a crucial deal with city unions that will require civilian workers to pay part of their salary toward retiree health care for the first time.

The nation’s second-largest city has been staggered by a budget crisis, and the health care agreement announced Thursday is projected to save $64 million over four years and help City Hall avoid sweeping layoffs.

Current civilian workers now pay nothing toward retiree health benefits.

Under the deal that must be endorsed by workers, they would contribute 2 percent of salary to retiree health costs in April, rising to 4 percent in July.

Meanwhile, furloughs of coalition-represented city employees would be suspended, funded by a freeze on salary increases and an end to cash overtime, the mayor’s office announced.

The deal is expected to save $200 million in General Fund dollars, and a total of $400 million over the next four years.

The deal covers the Coalition of L.A. City Unions, which represents 22,000 civilian workers. Police and firefighter negotiations will take place separately.

Despite that agreement, the city was still facing a projected budget deficit of about $350 million for the next fiscal year beginning July 1. It was unclear how that figure would be impacted by the proposed labor deal announced.

(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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