LOS ANGELES — A union-led coalition released a report suggesting Los Angeles could substantially reduce the $204 million in bank and money management fees that it paid last year to Wall Street firms.
The Fix L.A. Coalition held a rally Tuesday in front of the Bank of NY Mellon in downtown Los Angeles in conjunction with release of the report.
The event came at the start of the city's budget process and just over a week after Los Angeles city administrative officer Miguel Santana released a report saying the city needs to continue austerity measures that include further pension cuts and rein in employee salaries.
Santana didn't immediately return a call seeking comment.
The Service Employees International Union, which represents 20,000 employees, led the effort involving more than 36 other organizations. The city and a coalition of city employee unions begin formal contract talks April 1 and many of the city's collective bargaining agreements expire June 30.
"I spent months digging for all the Wall Street fees I could find, and I will know we still don't have it all," said Lisa Cody, SEIU 721 Research Analyst. "This $200 million is just the tip of the iceberg."
The report doesn't say exactly how much the city might save, but the coalition argues that the city should be able to negotiate lower financial fees because of the scale of city investments.
According to the report, the city has control $106 billion "in economic clout" that flows through financial institutions in the form of assets, payments and debt issuance.
The report said the city in 2012-13 spent $12.9 million on bond issuance costs, $1 million on bond remarketing fees, 4.8 million in swap payments and $17.9 million on letters of credit.
It also cited $133 million paid to firms that helped manage the city's three pension funds and $23 million to hedge against fluctuations in gas prices.
It also referenced a Brookings Institute report that says that state and local borrowing costs are too high.
"Given that the value on municipal bonds outstanding is roughly $2.9 trillion, municipal borrowers are leaving billions of dollars on the table every year, because of borrowing costs, fees, and other transaction costs," according to the Brookings Institute's Hamilton Project.