11 Apr 2014
- Written by Jack Humphreville
LA WATCHDOG-A Time for Action, the April 10 report by the LA 2020 Commission, focused its 13 recommendations and solutions on three areas: increased accountability and transparency for the City’s finances and operations, the City’s fiscal stability, and job creation.
The report did not address big picture issues such as the City’s failure to create jobs, poverty, traffic and congestion, and the crisis involving public education because the Commission did not have the staff, resources, or time to address these very complicated and contentious issues.
Importantly, all twelve members of this Downtown centric commission signed the report, including three labor leaders and a number of prominent officials representing many different constituencies.
In addition, Maria Elena Durazo of the Los Angeles County of Labor, AFL-CIO and Gary Toebben of the Los Angeles Chamber of Commerce both supported the report, stating while they do not support all of the recommendations, it is a “starting point for the necessary steps our community must take to better the lives of all Angelenos.”
This report was criticized for being “disappointing in that its modest recommendations do not offer City leaders a persuasive plan to reverse the City’s decline.”
But its very modesty is why it is an effective document because the concise recommendations are easy for even our elected officials to understand and therefore actionable by the City Council and Mayor Garcetti without months or years of delay.
While the LA 2020 Commission did not recommend a charter amendment that would require the City to Live Within its Means, it did propose the establishment of an Office of Transparency and Accountability to review and analyze the City’s budget, finances, operations, and legislative initiatives, similar to the New York City’s Independent Budget Office, the California Legislative Analyst Office, and the Congressional Budget Office.
This Office, to be overseen by five commissioners appointed by the Mayor, City Council, and the Controller to four year staggered terms, would consist of an Executive Director and approximately ten professionals who would be charged with providing objective information and analysis to not only City officials, but to the media, voters, and other interested parties.
The LA 2020 Commission recommended that City adopt a “Truth in Budgeting” ordinance which would require the Mayor to develop a three year budget along with an explanation of new programs, initiatives, taxes, and labor contracts and how they would impact the “baseline” budget.
The LA 2020 Commission also called for the establishment of a “Commission for Retirement Security” to “review the City’s retirement obligations in order to promote an accurate understanding of the facts.” This five member commission would be appointed by the Mayor, the City Council, and Controller; would be provided with a budget to hire outside experts that would have access to all City records and contracts; and be required to report back within 120 days with its findings and recommendations.
While another damn commission may seem like overkill or more “kicking the can down the road,” the members of the understaffed Commission could not agree on the facts involving the City’s two pension plans that are underfunded by 26%, or $10 billion.
So rather than punting, the Commission recommended a detailed fact finding analysis of City’s retirement obligations, including the impact of lowering the investment rate assumption from an overly optimistic 7.75% to a more realistic 6%, a rate recommended by Warren Buffett and substantially higher than the rate used in the private sector.
While there were other recommendations involving the oversight of our Department of Water and Power, the merger of the Ports of Los Angeles and Long Beach (fat chance), the updating of community plans, and the development of economic clusters to generate jobs, the establishment of an Office of Transparency and Accountability, the passage of a “Truth in Budgeting” ordinance, and the establishment of the Commission for Retirement Security appear to be no brainers that will start the City on the road to fiscal sustainability.
The timely implementation of these simple fiscally oriented reforms by the City Council and Mayor Garcetti will also be a start to restoring the voters’ trust and confidence in City Hall. But it is long journey, where fiscal reforms including balanced budgets, fully funded pension plans, and good streets and sidewalks trump hot air from City Hall.
The Time for Action is NOW.
. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.)
Vol 12 Issue 30
Pub: Apr 11, 2014