Budget Explained
By Stephen Cheung
On April 14, 2008, Mayor Antonio Villaraigosa outlined his budget proposal and candidly expressed the dire situation the City faces in the upcoming budget cycle at the State of the City address.
 Hit with drastic declines in projected revenues caused by a softening
housing market, credit crunch, and stagnant job and wage, the City is
challenged with a deficit of approximately $405 million for the 2008-09
fiscal year. The effects of the fiscal crisis on the City have been
widely and deeply felt.
Mayor Villaraigosa also laid out his plan to address the various issues faced by communities across the City of Los Angeles, from fighting traffic congestion to creating better jobs. More specifically, he described his strategy to reduce gang violence through the Mayor’s Office of Gang Reduction and Youth Development headed under Reverend Jeff Carr. The Mayor challenged Neighborhood Councils to assume a greater leadership role in the fight against gangs. Immediately following the State of the City address, Ms. Verna Jones, a Budget Representative from the Olympic Park Neighborhood Council, accepted the Mayor’s challenge and initiated contact with Reverend Jeff Carr to develop a new partnership with the Mayor’s Office. We are grateful for her enthusiasm, and look forward to building programs with other neighborhood councils and community organizations to keep our City’s children safe from the many dangers of gang violence.
Since September 2007, our office has worked closely with neighborhood councils to obtain valuable feedback from the community through the Mayor’s Budget Process. The Mayor’s budget team worked hard to incorporate the recommendations from the community, while attempting to combat an enormous deficit. The proposed budget contains a mix of tough but fair reductions, efficiency achieved through innovation, full cost recovery efforts, enhanced revenues from improved collections and fees, and short-term financing options to ensure the City continues to deliver core and essential services while making the structural changes to maintain its long-term operations and financial well-being. This proposed budget addresses the deficit in its entirety, and for the first time since FY 1999-00, presents a budget balanced without using its savings account - the Reserve Fund.
As we confront the current fiscal crisis, many options were presented to the Mayor to balance the budget. However, the feedback from the budget representatives and the NCRC unanimously recommended continuing funding of the neighborhood councils. Under the Mayor’s proposal, the neighborhood councils will continue to receive $50,000 each.
The City budget is a statement of values, and Mayor Villaraigosa is determined that his proposed budget reflects the core values of the communities of Los Angeles. According to the 2,800 Community Budget Surveys completed by neighborhood council leaders and stakeholders, Angelenos prioritized their focus areas in the following order: 1) Public Safety, 2) Infrastructure, 3) Transportation, 4) Economic Development, and 5) Energy and Environment. As you will see in the proposed budget, the Mayor’s areas of priority are in line with the focus areas of the community. Below, you will find a brief list of key highlights from the proposed budget:
PUBLIC SAFETY
• To reduce crime and improve public safety by staying on track with our plan to add 1,000 net additional officers – Hire an additional 284 net new Police Officers.
• To promote Youth Development and Reduce Gang Crime, a total of $24.3 million (including $19 million from this year’s budget) is dedicated to fund targeted prevention, intervention, and re-entry programs in the eight existing Gang Reduction and Youth Development (GRYD) Zones; and establish four additional GRYD Zones.
INFRASTRUCTURE
• To maintain or restore increased service levels of essential and core city services by expanding street resurfacing to an all-time high of 735 miles (235 miles of repair, 400 miles of slurry seal, & 100 miles of crack seal), and repair the one-millionth pothole.
TRANSPORTATION
• To improve mobility on city streets and reduce congestion by making roadways more reliable, efficient and safe – Synchronize 348 more traffic signals, and install 147 new left-turn signals.
ECONOMIC DEVELOPMENT
• To alleviate poverty by developing more quality jobs that will facilitate entry into the workforce for 20,000 area residents, and creating training opportunities for people with most need.
ENERGY and ENVIRONMENT
• To promote environmental stewardship by the City and fight global warming - Begin to implement our comprehensive plan to double the City’s use of recycled water, ultimately saving 16 billion gallons a year; and ensure strategic investments so that 10% of our power comes from renewable energy and alternative fuels.
FISCAL ACCOUNTABILITY
• The Reserve Fund balance, a measure of financial strength, has been rebuilt to over 4 percent of the General Fund, ($192 million) after falling to 3.1 percent in FY 2007-08 due to the downturn in the economy. The Reserve Fund helps keep the City’s bond rating up. LA has the highest bond rating of cities in US with more than 2 million population.
• One of the easiest ways to cut unnecessary spending and improve efficiency is to modernize, streamline and consolidate the City’s information technology (IT) functions. This budget plan takes steps to review and restructure the City’s IT responsibilities under the Information Technology Agency (ITA) to boost service levels and reduce costs.
• This budget faces the hard truth that the structure and composition of City government must change in order to ensure greater efficiency and remain focused on our top priorities. This plan proposes the elimination of over 700 positions from the City budget.
These positions were identified based on an assessment of the core functions of each department. In addition, short-term layoffs, in the form of mandatory furloughs or reduced work hours, are proposed in order to save the City $23 million in the coming fiscal year while enabling us to steer clear of additional long-term layoffs.
• To track progress and make sure the city is delivering services as effectively and efficiently as possible, the Performance Management Unit (PMU) was established to work with our office, General Managers and their respective departments to identify savings and highlight best practices. Performance metrics for all city departments have been developed this year to replace the outdated workload indicators. The metrics will help keep us focused on core functions, realizing efficiencies, and ultimately lead to better services for the people of Los Angeles.
The City of Los Angeles FY 2008 – 2009 Budget Proposal is available at http://mayor.lacity.org/budget .
The City of Los Angeles has devoted considerable resources, in budget, personnel and time to the development and operation of the Neighborhood Council system. That commitment can be measured in funding for DONE, BONC, the annual allocation to the Neighborhood Councils, City Attorney, City Clerk, Human Relations Commission and Council staff, and the time and effort of the Mayor and his deputies who attend Neighborhood Council and Board of Neighborhood Commissioners meetings.
To ensure the success of the Neighborhood Council system, it is our hope that Neighborhood Councils and City officials will continue to form joint working groups to implement new programs and explore new methods of collaboration, from the initiation of the foreclosure efforts to the funding of City Clerk-administered elections of neighborhood councils scheduled to begin in June 2008.
In light of the upcoming fiscal challenges, it is vital that neighborhood councils and City Hall work hand-in-hand to find effective and efficient solutions to make Los Angeles a great city. As Mayor Villaraigosa said during his State of the City address, “Angelenos, let’s imagine the horizon beyond our sight. Let’s reach for the future beyond our grasp. Let’s do it as a family. Let’s do it as a community. Let’s do it as One City.” (Stephen Cheung is Area Director and Department of Neighborhood Empowerment Liaison for the Office of the Mayor.) _
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