LA WATCHDOG--On September 28, Mayor Eric Garcetti issued his Fiscal Year 2017-18 Budget Policy and Goals to all of the General Managers of All City Departments. The goals include closing a projected $85 million deficit for the fiscal year beginning July 1, 2017, identifying over $40 million in new general funds to maintain the City’s current commitment to the homeless, and hiring 5,000 new employees by June 30, 2018 to restore services and replace retiring workers.
This missive is focused on next year’s budget and does not address the long term reforms that are desperately needed to tackle the City’s Structural Deficit (where the growth in personnel costs exceeds the increase in revenues), the massive unfunded liabilities of its two unsustainable pension plans (estimated to be in the range of $15 billion based on a more realistic investment rate assumption), and the deferred maintenance on its infrastructure (estimated to be north of $10 billion).
On October 4, the Neighborhood Council Budget Advocates (“NCBAs”)* delivered the following recommendation to Mayor Garcetti and the City Council.
Early White Paper Recommendation
The Neighborhood Council Budget Advocates (the “NCBAs”) urge the City Council and Mayor Eric Garcetti to implement the following recommendations of the LA 2020 Commission as part of its budget for the 2017-18 fiscal year:
- Create an independent “Office of Transparency and Accountability” to analyze and report on the City’s budget, evaluate new legislation, examine existing issues and service standards, and increase accountability.
- Adopt a “Truth in Budgeting” ordinance that requires the City to develop a three year budget and a three year baseline budget with the goal to understand the longer-term consequences of its policies and legislation. (Council File 14-1184-S2)
- Be honest about the cost of future promises by adopting a discount rate and pension earnings assumptions similar to those used by Warren Buffett.
- Establish a “Commission for Retirement Security” to review the City's retirement obligations in order to promote an accurate understanding of the facts.
We request that the Budget and Finance Committee assign a Council File for each of the recommendations and agendize each of these items for its next meeting on October 17, 2016.
The implementation of these recommendations will be the first step in addressing the City’s Structural Deficit, the massive unfunded liabilities of its two unsustainable pension plans, and the deferred maintenance on its infrastructure.
The adoption of the recommendations of the LA 2020 Commission will result in increased transparency into the City’s complex operations and finances and begin the process of restoring Angelenos’ trust and confidence in City Hall and its elected officials.
The NCBAs are making these recommendations prior to the 2017 Neighborhood Council Budget Advocates White Paper so that they will be an integral part of the upcoming fiscal year’s budget process.
The NCBAs look forward to a timely response.
Stay tuned to see if Mayor Garcetti and the City Council are willing to implement meaningful reform or will it be business as usual, kicking the can down the road and dumping tens of billions in unfunded obligations on the next generation of Angelenos.
NEED TO KNOW
*The Neighborhood Council Budget Advocates are the elected to represent the charter authorized Neighborhood Councils. Their role is to explore, research, study, seek input, prepare and present the concerns and interests of the communities of the City of Los Angeles ("City") about the use of City funds, City revenue collection, City budget and budget allocations, efficiency of City government, City finances, City financial obligations and other such concerns and related to financial matters of the City to the Mayor and City Council.
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(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. Jack is affiliated with Recycler Classifieds -- www.recycler.com. He can be reached at: firstname.lastname@example.org.) – cw