By GREGORY N. HEIRES

Municipal union leaders met April 12 with city officials, who came seeking a $500 million labor contribution toward balancing the budget.

City Labor Commissioner James F. Hanley formally asked the Steering Committee of the Municipal Labor Committee to help the city close the nearly $5 billion deficit looming for the 2003 fiscal year, which begins July 1.

The MLC, which includes 94 municipal unions, gave no immediate response to the city's proposals, but agreed to look into possible savings by holding technical meetings on budget and pension issues.

"We are obviously willing to explore things," said Randi Weingarten, MLC chair and president of the United Federation of Teachers. But she expressed labor's displeasure with Mayor Michael R. Bloomberg's unwillingness to consider raising revenues to help offset the deficit.

"This is just the beginning of a process to see if both sides can reach an understanding about ways to achieve savings," said Executive Director Lillian Roberts, who represents DC 37 on the MLC Steering Committee with President Veronica Montgomery-Costa. "A dialog was initiated, and we expect to present alternative proposals of our own on how the city can achieve real savings by reducing waste."

Goal is to avoid layoffs
At the April 12 meeting, Mr. Hanley told MLC officials that "We want to begin the process to avert what could be a very, very difficult situation for all of us." He added, "Our ultimate goal is to avoid layoffs."
Two days earlier, Mayor Bloomberg underscored his aim to avoid layoffs during a meeting with the Chamber of Commerce.

"We hope the unions will, through adjustments in pension funds and fringe benefits, save us about half a billion dollars," he said. "My commitment to them is if they do that, there will not be any layoffs."
When he released his Executive Budget April 17, Mr. Bloomberg said that without the $500 million, "the contingency cuts include layoffs."

During the meeting with union officials, held at DC 37 headquarters, Mr. Hanley stressed that the city isn't wedded to any specific savings measures. But he did say that the city feels strongly committed to its proposal to save $275 million by stretching out its payments to implement the cost of living adjustment for pensions that the municipal unions won two years ago.

Under the historic 2000 COLA legislation, the city is supposed to phase in the funding over five years. City officials want to extend the period to 10 years, which would save $275 million in the coming fiscal year.

Mr. Hanley called the extension a "painless" step that wouldn't jeopardize COLA payments. The city would need the formal approval of municipal unions to carry out the extension.

Mr. Hanley said ways to obtain the other $225 million in proposed savings might include furloughs, payroll lags, a less costly pension plan for new employees, time-and-leave adjustments and delaying the increase of city contributions toward union benefits set for later this year.

Early retirement incentive
In addition to the $500 million in proposed savings, the city hopes to save an additional $100 million through a severance and early retirement package. The city hasn't yet formally initiated discussions with the unions about its plan, which would require state legislation.

The technical discussions with the city will be handled by the MLC's Pension Committee, which is headed by Mel Aronson of the Teachers union and John Driscoll of the Captains Endowment Association, and a special budget committee staffed by Assistant Director Michael Musuraca of the DC 37 Research and Negotiations Dept. and Alan Brawer, an economist who advises the MLC.