The Real State of the City of Los Angeles

LA WATCHDOG-Mayor Eric Garcetti delivered his 4,500 word State of the City on Monday afternoon to a large gathering at Cal State Northridge.  He opened by saying that our City has turned the corner, “leaving the Recession in the rearview mirror.” He then focused on his many “Back to Basics” initiatives and programs that are helping grow our economy, create jobs, and make LA a great city that works for all Angelenos. 

Early on in his address, Garcetti pledged, “As long as I’m your Mayor, I won’t duck bad news.  I’m going to own it and I’m going to attack it.” 

Yet Garcetti failed to mention the City’s flawed finances that are characterized by a Structural Deficit where expenditures increase faster than revenues, a $700 million cumulative deficit over the next four years, and more than $25 billion in unfunded pensions and in deferred maintenance on our streets, sidewalks, and the rest of our deteriorating infrastructure. 

Nor did Garcetti discuss our Department of Water and Power and the proposed five year, $1 to $2 billion increase in our water and power rates.  The announcement of these massive rate hikes has been delayed by City Hall politics as our Elected Elite are concerned about the negative reaction of Ratepayers to this huge hit to their wallets. This is compounded by the adverse publicity surrounding the whereabouts of over $40 million of Ratepayer money that was funneled to the Joint Safety and Training Institutes that are under the thumb of IBEW Union Bo$$ d’Arcy and the botched introduction of the $160 million (and counting) Customer Information System.  

There is reason for optimism on the part of the Mayor and the City Council as the upcoming budget that will be announced on Monday will benefit from an extra $150 million (or more) in revenue and pension savings thanks to an improved economy and a record stock market.  But does that mean City Hall can go hog wild with new spending programs, the hiring of new employees, or wage increases.  

For example, the City’s civilian employees have been without a contract since July 1 and are threatening to strike if their salary and benefit demands are not met.  Unfortunately, the City cannot afford these budget busting raises or the very generous benefits as it is facing a $165 million budget deficit next year.    

But there is no need to cry for our City employees as the average cost per City employee has increased 50% over the last nine years, from $96,000 to almost $145,000.  At the same time, total employee related costs have increased by almost $1 billion (33%) despite 11% (4,000) fewer workers.    

Garcetti’s most ambitious goal is to build 100,000 units of housing by 2021 as LA is reportedly the least affordable housing market in the country.  Left unsaid, however, is that this is a $20 billion program that will require a huge investment by the City even though the State and Federal governments will be asked to supply a significant portion of the money. 

Before the City embarks on any new programs or approves any wage increases, it needs to develop a comprehensive plan to repair and maintain our streets and sidewalks, our parks, and the rest of our deteriorating infrastructure, including its information technology and management information systems.  

The City must also confront the $12 billion unfunded pension liability that threatens the City’s ability to deliver services, especially if the stock market tanks. 

On Monday, Mayor Garcetti will release to the public his budget for the fiscal year beginning on July 1, 2015.  

Will he present a plan to repair and maintain our streets and sidewalks?  Will he endorse pension reform?  Or will it be business as usual? 

It is time for Garcetti to honor his word.  No more ducking bad news.  It is time to attack the problem of our City’s busted finances and inefficient operations.  To paraphrase his words, it is time for the City work for us, not against us. 

 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, The Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at:  [email protected]) 
-cw

 

 

CityWatch

Vol 13 Issue 32

Pub: Apr 17, 2015