Digest/28 inches/mark2nd

School Employees Demand Raises

The seven unions that represent employees of the Los Angeles Unified School District are putting pressure on the school board to spend a state budget windfall on raising salaries.

Union officials have threatened to use their political clout to punish school board members who don't support a pay raise. They have also produced a budget analysis showing there is enough money to meet their demand for a 4 percent pay raise this year on top of the 2 percent they have already received.

An additional 4 percent pay raise would cost the district $108 million. The school district is getting $60 million more than expected this year from the state.

Room Rates Rise, Occupancy Falls

Hotel occupancy rates dropped in L.A. County by 3 percent in August from the same month in 1997, but that didn't prevent local hotels from raising their room rates.

Despite the slight drop-off, tourism-industry officials say there is still enough demand for local hotel rooms to justify August's 9 percent average rise in room rates. Total occupancy for L.A. County hotels was 80 percent during the month considered brisk business in the hotel industry despite the fact that it's down from 83 percent in August 1997.

Disney Suit Dismissed

A Delaware judge has thrown out a lawsuit filed by Walt Disney Co. shareholders alleging that ex-President Michael Ovitz's severance package was a waste of corporate assets.

Delaware Chief Chancery Court Judge William Chandler dismissed the suit, which sought to recoup payments made to Ovitz under the so-called golden parachute provision in his contract. The shareholders did not prove that Ovitz's "golden parachute" was a waste of funds and that Disney had obtained nothing of value, the judge argued.

Ovitz received $39 million in cash, along with stock options valued at $50 million when he left Disney in late 1996. An attorney for the shareholders said an appeal is planned.

Foundation Flees Medicare Markets

Arguing that reimbursement rates do not cover expenses, Foundation Health Systems Inc. announced it is withdrawing from the Medicare health maintenance organization business in 18 counties in the Western United States.

The Woodland Hills-based provider of managed-care plans covering 6 million people said it will drop Medicare customers in eight counties in Northern and Central California, Colorado, New Mexico and Washington. Foundation already had announced similar plans to withdraw from 10 rural counties in Northern California and several others in New Jersey and Connecticut.

Medicare is the government's health program for the elderly. Foundation said it has been forced to exit such markets because federal regulations restrict payment growth in the program

Alameda Corridor Decisions Delayed

The agency in charge of building the Alameda Corridor has failed to reach a final agreement with Burlington Northern Santa Fe, one of the railroads that will haul cargo on the 20-mile rail expressway between the ports and downtown.

The board of the Alameda Corridor Transportation Authority was prepared to approve an accord last week, clearing the way for construction of the project. Those decisions were postponed when the agency and the railroad deadlocked over a number of issues including the extent of the railroad's responsibility for maintaining portions of the corridor and how much track ACTA should provide for storage of railroad cars.

Until it reaches an agreement with the railroad, ACTA will be unable to sell revenue bonds to raise money to build the project or approve major contracts with builders.

Hollywood Unions to Merge

Bringing decades of negotiations one step closer to conclusion, the Screen Actors Guild and the American Federation of Radio & Television Artists, the two major unions representing film and TV actors, have approved a plan to merge.

The new union would be called the Screen Actors Guild/American Federation of Television & Radio Artists, or SAG/AFTRA. The unions' 120,000 members will be asked to vote on the consolidation in November. By joining forces, the unions hope to obtain greater leverage in bargaining with companies and producers over contracts.

Fox to Sell 85 Million Shares

Fox Entertainment Group, a unit of Rupert Murdoch's News Corp., provided its first indication of the size of its proposed initial public stock offering.

Fox Entertainment which produced the film "Titanic," television shows such as "The Simpsons" and owns the Los Angeles Dodgers will offer 85 million Class A common shares, or 13.4 percent outstanding. Earlier, News Corp. announced that it would sell up to 20 percent of Fox Entertainment to the public.

161 Home Savings Branches to Close

Savings and loan giant Washington Mutual Inc. will close 161 Home Savings bank offices in California next year, including 40 in Los Angeles County.

The closures and other consolidations are expected to cost as many as 3,500 jobs and displace thousands of customers, although many customer accounts will be transferred to branches nearby.

The closures include three of Home Savings' famous white marble structures in Santa Monica, Riverside and Chula Vista, as well as the bank's headquarters in downtown L.A. Most of the job cuts will be in administrative and back-office positions.

LAX Shuttle Plan Gets the Nod

A key City Council committee has approved Los Angeles International Airport's plan for a massive overhaul of its ground transportation system.

The council's Commerce, Energy and Natural Resources Committee approved LAX's plan to award near-exclusive shuttle concessions to three van companies. The plan would grant full-service concessions to consortiums led by SuperShuttle, Prime Time Shuttle and Xpress Shuttle in exchange for a minimum annual revenue guarantee of $1 million each.

The plan is opposed by small, mom-and-pop shuttle operators, who argue the arrangement will drive them out of business. The proposal is scheduled to be voted on by the full City Council this week.

Boeing Moves to the Valley

In a 10-year lease valued at $35 million, Boeing Co. is bringing 500 employees to the new West Hills Corporate Village on the site of the former Hughes Aircraft facility in Canoga Park.

The campus, which will house Boeing's Rocketdyne Propulsion and Power unit, encompasses 170,000 square feet of space and will be used for the research and development of defense and aerospace laser and electro-optic technology. Beginning in March, Boeing will relocate 275 employees to the new facility from sites in Westlake Village and Ventura County. The company also will move 220 workers from its facility on DeSoto Street to the new West Hills campus.

West Hills Corporate Village is a joint partnership of Regent Properties and Shamrock Holdings of California Inc.

Compiled by Larry Kanter

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