LA WATCHDOG--The recent reports of rats, fleas, and vermin in City Hall have gone viral, eliciting comments from around the world.  This includes an appropriately titled, front page article in The Wall Street Journal, “Politics is a Dirty Business – Starting with the Rats at Los Angeles City Hall.” 

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LA WATCHDOG--The process for developing and approving the City’s annual budget is not transparent because it does not allow Angelenos to have any meaningful input on how the City will spend our hard-earned money. Nor does it allow us time to review, analyze, and comment on the operational, financial, and policy issues that are contained in over 1,500 pages of mind-numbing figures.  

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LA WATCHDOG--“This is the eradication of congestion.” Phillip A. Washington, Metro Chief Executive. 

The Metropolitan Transportation Authority is considering congestion pricing which, if approved by the voters, would charge motorists to drive on our freeways and streets.  This new tax is intended ease traffic on our roadways and reduce the County’s carbon foot print by cutting down on the emission of greenhouse gases that fuel climate change.

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LA WATCHDOG--The Editorial Board of the Los Angeles Times believes that Mayor Eric Garcetti made the right decision in not running for President of the United States, stating that “Los Angeles is a big, complicated [see below] city with serious challenges and tremendous opportunities. It’s a city that needs a full-time, fully invested mayor.

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LA WATCHDOG--More money will not solve the problems of the Los Angeles Unified School District because Angelenos do not trust the system to properly educate their children. 

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LA WATCHDOG--The management of the Los Angeles Unified School District and the representatives of the striking United Teachers Los Angeles have been meeting behind closed doors for almost a week, trying to come to an agreement over salaries, class size, fully staffed schools (librarians nurses, counselors), the reorganization of the District into 32 districts, and a limit on charter and magnet schools. 

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LA WATCHDOG--United Teachers Los Angeles and its President, Alex Caputo-Pearl, are asking the Los Angeles Unified School District for salary increases for its members, smaller class sizes, and fully staffed schools.

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LA WATCHDOG--The Los Angeles Unified School District is closed for business because United Teachers Los Angeles and its over 30,000 members are striking for higher wages, fully staffed schools, and the curtailment, if not the elimination, of charter and magnet schools.

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LA WATCHDOG--One of the consequences of the strike action against the Los Angeles Unified School by United Teachers Los Angeles will be the demand for a tax increase to finance the District’s inefficient operations. 

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LA WATCHDOG--The Los Angeles Times 2019 Wish List for 2019 listed 25 changes they would like see, of which only one involved City Hall. 

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LA WATCHDOG--Despite a booming economy and record revenues, our City’s finances are a mess.  

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LA WATCHDOG--In 2001, the voters of Los Angeles overwhelmingly approved Charter Amendment 2, the Modification to Fire and Police Plans.  

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LA WATCHDOG-The California Public Employees’ Retirement System (CalPERS) reported that its investment portfolio lost 1.9% for the first five months of its fiscal year (July to November). 

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LA WATCHDOG--You would think that the Budget and Finance Committee of the Los Angeles City Council would be doing everything possible to eliminate the projected $84 million budget deficit that was discussed in the Second Financial Status Report issued on December 6 by the City Administrative Officer. 

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LA WATCHDOG--The Second Financial Status Report issued on December 6 by the City Administrative Officer (“CAO”) said that the “currently projected expenditure imbalance of $83.9 million is still at a significant level.”  

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LA WATCHDOG--For true blue Dodger fans, the off season is one of great anticipation. The team is building its roster for the upcoming season to make another run at the elusive goal of winning the World Series. 

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LA WATCHDOG--The $8.1 million Silver Lake Reservoir Stormwater Capture Project is designed to capture 159 acre feet of stormwater (52 million gallons) from 171 acres surrounding the lake and to divert the cleaned up (but not drinkable) water into the out of service Silver Lake and Ivanhoe Reservoirs. 

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LA WATCHDOG--On Monday, about to be termed out City Council President Herb Wesson announced that he is entering the race to succeed Mark Ridley-Thomas, a long time County Supervisor who is also termed out in 2020. 

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LA WATCHDOG--On Saturday, the Los Angeles Neighborhood Council Coalition (“LANCC”) passed the following motion demanding that embattled Councilman Jose Huizar resign from the City Council. 

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LA WATCHDOG--Over the past two years, our DWP bills have soared beyond anyone’s expectations, significantly higher than was projected in the 2016 rate case. 

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LA WATCHDOG--Where there is smoke, there is fire, especially when it involves City Councilman Jose Huizar. 

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LA WATCHDOG--On March 3, 2020, a little more than 15 months away, in 67 weeks from now, and in 469 days from Tuesday, we will once again go to the polls as California will hold its Presidential Primary.  

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LA WATCHDOG--The City’s two pension plans had a 9.75% return on its investment portfolio of $36 billion for the fiscal year ending June 30, 2018 according to the recently released actuarial reports.  This is 2.5% higher than the targeted rate of return of 7.25%. 

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LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?  

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LA WATCHDOG--While Eric Garcetti has been prancing around the country promoting his presidential pedigree, the City of Los Angeles is experiencing “over expenditures” of almost $100 million for the first two months of its fiscal year, blowing a hole in the City’s supposedly balanced budget. 

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LA WATCHDOG--When you oppose a new tax such as the State’s Gas Tax or the County’s Rain Tax, the all-knowing political establishment, the leaders of the campaign funding public sector unions, and many other bottom feeders go ballistic, claiming that you are clueless, ill informed, and mean spirited, and do not understand the big picture and the nuances of the budget and government finance. 

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LA WATCHDOG--We are being bombarded by so many political ads that we are having a difficult time sifting through all the clutter, trying to separate fact from fiction, so that we can make a rational decision on how to vote on eleven State propositions, one County measure, and three City charter amendments. 

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LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank? 

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LA WATCHDOG--Despite record revenues, the State of California is asking us to approve $14 billion in bonds (Propositions 1, 3, and 4) while the County of Los Angeles wants the voters to bless the $300 million Rain Tax (Measure W).

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LA WATCHDOG--The City, the County, and the State are hauling in record revenues totaling almost $250 billion, including over $40 billion from the four million residents of the City of Los Angeles. But it is never enough as the State has placed on the ballot measures to authorize $14 billion in bonds while the County is asking us to approve the $300 million Rain Tax to fund stormwater projects (measure W). 

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LA WATCHDOG--We are being asked to repeal the regressive $5.2 billion gas tax that was approved in April 2017 by two thirds of the Legislature and the Governor, but only after much arm twisting and unsavory side deals to buy votes. 

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LA WATCHDOG--Mayor Eric Garcetti’s Budget and Policy Goals memo for Fiscal Year 2019-20 that was sent to the General Managers of the City Departments is using the homeless crisis to divert attention away from his fiscal mismanagement of the City’s finances despite record revenues from a robust economy. (See letter below.) 

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LA WATCHDOG--Everybody wants clean air, especially here in Los Angeles.

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LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank? 

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LA WATCHDOG--On August 24, Mayor Eric Garcetti issued a press release where he touted that the City and union leaders for the police and firefighters “reached an agreement to make the Deferred Option Retirement Plan (“DROP”) more effective and less susceptible to abuse.”  

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LA WATCHDOG--Liability claims against the City of Los Angeles have caused continuing nightmares for the City’s budget mavens.

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LA WATCHDOG--We have the bad news, the good news, and the even better news. 

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LA WATCHDOG--Investment Incentives, Controller Ron Galperin’s excellent report on Tax Abatements and Subvention Agreements, outlines the $1.3 billion in subsidies and giveaways for 11 DTLA hotels with 5,732 rooms that have been approved by Mayor Eric Garcetti and the Herb Wesson-led City Council or are in the pipeline waiting the pro forma blessing of City Hall.   

However, only about $500 million (38%) for two convention hotels with 1,850 rooms are legitimate subsidies. They have been developed or are being developed by the Anschutz Entertainment Group in connection with its pioneering $3 to $4 billion investment that revitalized the area north of the Convention Center and its proposed $1.25 billion investment to finance the long overdue expansion of the Convention Center and an adjacent four-star convention hotel with 850 rooms. 

The other nine hotels with almost 3,900 rooms were granted or are asking for giveaways of almost $800 million from the round heeled occupants of City Hall. However, preliminary due diligence confirms that the developers of these three-star hotels have above average returns on their investments without the benefit of the City’s giveaways because of the positive impact of the AEG investment in the LA Live and the Convention Center.  

Galperin made several reasonable, easy to implement recommendations, including one that the City develop a comprehensive economic development plan that incorporates the use of incentives, including those for hotels that are within walking distance of the Convention Center.  

He also recommended that the City hire experienced professionals who have a thorough understanding of the hotel business; are able to do an in-depth business and financial analysis of the transaction and the need for, if any, incentives; develop reasonable alternatives; and negotiate favorable deals for the City. 

Finally, Galperin recommended that the City develop a process to review the individual transactions after their completion to see if the deals are meeting expectations.  This post completion review would allow for “clawback” provisions if the developer fails to honor his commitments.  

[I would add that if the deal exceeds expectations, the City should be entitled to the return of its subsidy, interest on that subsidy, and a small equity kicker, similar to what occurs in the private sector.]  

The implicit message is that the City should not participate in any more giveaways for service hotels, especially those sponsored by Councilmen Herb Wesson and Curren Price that are not within two miles of the Convention Center. 

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LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?  

The proponents of the November ballot measure that would allow the City of Los Angeles to establish a bank tell us that it would be an independent entity, free of political interference, because it would be “managed by a civilian commission made up of Los Angeles residents from every council district.”   

But this claim is nothing but campaign rhetoric and empty promises as the Bank of Los Angeles will be controlled by Mayor Eric Garcetti and the Herb Wesson led City Council, the same fiscally irresponsible crew that is responsible for the City’s budget deficit, its $15 billion unfunded pension liability, our lunar cratered streets, and the Structural Deficit that is in the range of $1 billion a year. 

[See - LA’s Unbalanced Budget: City Hall Stealing from Our Kids! 

The civilian commission will be appointed by the Mayor, subject to the approval of the City Council.

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LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank? 

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LA WATCHDOG--On November 6, the politicians who occupy the Sacramento Capitol and their special interest cronies are asking us to approve $14.4 billion in bonds to finance the State’s water infrastructure ($8.9 billion), its affordable housing program ($4 billion), and children’s hospitals ($1.5 billion). At the same time, the County’s Board of Supervisors are looking for us to bless a $300 million a year forever tax to fund its yet to-be-developed stormwater program (the “Rain Tax”). 

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LA WATCHDOG--You would never know that the City of Los Angeles is in the midst of an ever-growing pension crisis if you attended or listened to a meeting of the Board of Administration of the Los Angeles City Employees’ Retirement System (“LACERS”), the $16 billion pension plan for the City’s civilian employees. 

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LA WATCHDOG--“I’m mad as hell and I’m not going to take this anymore.”  Howard Beale (Network, 1976) 

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LA WATCHDOG--“God gave us rain and you figured out how to tax it.” 

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LA WATCHDOG--Beginning on Friday, July 5, many Angelenos were without power for 72 hours because of the record demand for power during the unprecedented “heat storm” that overwhelmed the Power System’s outdated infrastructure. 

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