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What the Hell Is Going On at City Hall?

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LA WATCHDOG-The City is projecting record revenues of almost $4.9 billion for the fiscal year beginning July 1, 2014.  This 14% higher than fiscal 2009-10 revenues and 32% more than fiscal year 2004-05 revenues, the year Antonio Villaraigosa began his financially disastrous reign as Mayor.  

Yet despite this massive inflow of new cash, the City expects that next year’s budget deficit will be $242 million, or 5% of general fund revenues. This assumes that the City will not be able to implement the wishful Villaraigosa budget assumptions that called for civilian workers to forego a contracted 5.5% raise on January 1 and to contribute 10% to the cost of their very generous health care benefit. 

Over the next four years, the cumulative deficit will exceed $700 million. This assumes that there will be no additional raises over the next three years for any labor group, including the cops and firefighters. 

As in the past, the culprit is the out of control escalation in personnel expense.  Over the next four years, increases in salaries, benefits, and pension contributions of over $530 million will exceed the growth in revenues by almost $120 million. Once again, this assumes that the City’s docile union leaders will agree to no compensation bumps for any City employees. 

While the City has implemented changes in the compensation and pension plans for new employees, increased the employee contributions for their retiree health benefits, and reduced staffing by 5,300 positions, these steps have not been enough to stop the march towards financial ruin. 

The Mayor, the Herb Wesson led City Council, and its Budget and Finance Committee chaired by Paul Krekorian have demonstrated that they do not have the will power or capability to stop the City from living way beyond its means, in large part because they are in cahoots with the campaign funding leadership of the City’s public unions, real estate developers, and the special interest lobbyists that roam City Hall.  

We must demand a charter amendment that requires the City to LIVE WITHIN ITS MEANS.  This would mandate that the City develop and adhere to a Five Year Financial Plan, pass two year balanced budgets based on Generally Accepted Accounting Principles, and over the next ten to fifteen years, fix our streets and the rest of our failing infrastructure and fully fund our pension plans that are $11.5 billion underwater.. 

Incidentally, the funding level of our City’s pension plans was rated the fifth worst in the country by Moody’s Investor Service, one of the three major bond rating companies, because our unfunded pension liabilities were 3.25 times operating revenues.  

Importantly, this charter amendment does not limit the Mayor and the City Council from implementing any new programs.  Nor does it stop the Mayor and the City Council from eliminating the $450 million business tax over the next 15 years.  The only requirement is that they balance the damn budget. 

Now is the time for Mayor Eric Garcetti to show his leadership chops by endorsing the LIVE WITHIN ITS MEANS charter amendment.  Without strong charter provisions that protect the City’s financial condition and its ability to deliver its core services, our City will not have the resources to grow its economy and employment opportunities, a major Garcetti goal.

 

(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]. Hear Jack every Tuesday morning at 6:20 on McIntyre in the Morning, KABC Radio 790.) 
-cw

 

 

CityWatch

Vol 11 Issue 86

Pub: Oct 25, 2013

 

 

 

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