LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?
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).
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).
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.
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.)
LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?
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.”
LA WATCHDOG--Liability claims against the City of Los Angeles have caused continuing nightmares for the City’s budget mavens.
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.
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.
LA WATCHDOG--Charter Amendment B: Shall the City Charter be amended to allow the City to establish a municipal financial institution or bank?
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”).
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.
LA WATCHDOG--“I’m mad as hell and I’m not going to take this anymore.” Howard Beale (Network, 1976)
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.
LA WATCHDOG--On November 6, the voters of California will be asked to support or oppose three propositions (see below) that will authorize the issuance of $14.4 billion of additional bonded debt.
LA WATCHDOG-The People’s Republic of Santa Monica is showing its fiscal responsibility by seeking to hire an independent consultant to review and analyze its unfunded pension liability of $461 million and develop alternative solutions on how to eliminate this “debt” over the next decade.
LA WATCHDOG--Even though the City is looking at a deficit of more than $250 million this year and a Structural Deficit of $4 billion over the following four years, the City Council is considering tax breaks of more than $100 million for two hotels that are not within walking distance of the Convention Center.
LA WATCHDOG--On Tuesday, the City Council passed a Herb Wesson sponsored motion, without any discussion, that requested “the City Attorney, with the assistance of the Chief Legislative Analyst, to prepare and present the documents necessary to place on the November 2018 Ballot the necessary amendment to Section 104(g) of the City Charter to authorize the City to form a municipal bank.”
LA WATCHDOG--The City of Los Angeles has very ambitious plans for the Civic Center, the area surrounding City Hall. According to the City’s Information Statement, the City is “considering major improvements to its Civic Center, with estimates ranging from $730 million to $760 million for the first of multiple phases of its Civic Center Master Development Plan.”
LA WATCHDOG--On June 5, 57% of the California’s voters approved Proposition 68, a measure that authorized the issuance of $4.1 billion of bonds to fund “parks, natural resources protection, climate adaptation, water quality and supply, and flood protection.”
LA WATCHDOG--Anschutz Entertainment Group’s proposal to invest $1.25 billion in the expansion of the Los Angeles Convention Center and the development of a convention hotel will create significant controversy.
LA WATCHDOG--Despite a 36%, $1.6 billion increase in revenues since Eric Garcetti was elected the Mayor of Los Angeles in 2013, the City still has an unbalanced budget for the fiscal year beginning on July 1, 2018 and a Structural Deficit that will total more than $4 billion over the following four years.
LA WATCHDOG--When the political establishment, the public sector unions, the environmental community, the building trade unions, and the business community support a ballot measure that involves our money, rest assured that the ballot measure is not in our best interests as this cabal, once again, wants to pick our pockets clean of our hard earned cash.
LA WATCHDOG--Mayor Eric Garcetti and members of the Herb Wesson led City Council are less than transparent as they continue to duck questions that may expose their lack of respect for the taxpayers and their failure to manage the financial affairs of the City in a prudent manner.
LA WATCHDOG--The Metropolitan Transportation Authority (“Metro”) is considering retaining CH2M Hill, a full-service design, construction, and program management firm with close ties to City Hall, as the prime contractor for environmental and design work for an eight mile bike path along the Los Angeles River.
LA WATCHDOG--While the State of California is rolling in the dough with an $8 billion surplus as a result of increases in the State Budget to $200 billion, the spendthrift politicians in Sacramento are asking us to approve a $4.1 billion ballot measure that will help the State “protect our water, parks, and natural resources” from the impact of “severe droughts, wildfires, and climate change.”
LA WATCHDOG--Mayor Eric Garcetti and Councilman Paul Krekorian, the chairman of the Budget and Finance Committee, have touted the strength of the City’s Reserve Fund and its Budget Stabilization Fund as an example of their prudent management of the City’s finances.
LA WATCHDOG--Proposition 68 (Authorizes bonds funding parks, natural resources protection, climate adaptation, water quality and supply, and flood protection) represents an excellent opportunity to send our less than transparent Elected Elite a loud and clear message that we are not their ATM. And furthermore, a NO vote will also send the message that we do not trust our State, County, and City officials to be prudent stewards of our hard earned money.
LA WATCHDOG--Despite record tax revenues, Mayor Eric Garcetti and his budget team are planning to increase the Street Damage Restoration Fee by over eight times, from a budgeted amount of $8.3 million this year to $70 million for the fiscal year beginning July 1, 2018.
LA WATCHDOG--Many knowledgeable people believe that the Los Angeles Unified School District (“LAUSD”) will declare bankruptcy within three years unless it takes drastic action to restructure its finances.
LA WATCHDOG--Despite a very healthy $340 million (5.6%) increase in General Fund revenues, the proposed $6.2 billion budget for the fiscal year beginning July 1, 2018 is not balanced or fiscally responsible, contrary to pronouncements by Mayor Eric Garcetti.
LA WATCHDOG--Mayor Eric Garcetti’s 60 minute, 8,000 word State of the City address was long on the City’s accomplishments, ranging from being selected to host the 2028 Olympics, the expansion of our subway system, the authorization of the $5 billion people mover system at LAX, lower crime rates, the taking of guns off our streets, the paving of 11,000 miles of streets, and the creation of over 150,000 jobs.
LA WATCHDOG--“As long as I’m your Mayor, I won’t duck bad news. I am going to own it and I’m going to attack it.” – Mayor Eric Garcetti, April 2015
LA WATCHDOG-APRIL 1, 2018--According to a secret memo prepared by the office of Mayor Eric Garcetti, Amazon has reached a preliminary agreement with the City, the County, and the State to locate its second corporate headquarters (“HQ2”) in the city of Los Angeles, primarily in the area surrounding the Union Station transportation hub and the nearby Los Angeles River.
LA WATCHDOG--“Resilience is a value that guides everything we do in Los Angeles, because we know that the decisions we make today will shape the future our children and grandchildren will inherit. The Resilient Los Angeles plan will help us strengthen our infrastructure, protect our economy, make our institutions more inclusive, and create safer neighborhoods.” - Mayor Eric Garcetti
LA WATCHDOG -“What you find is there’s never just one cockroach in the kitchen when your start looking around.”- Warren Buffett
LA WATCHDOG BRIEFLY PUT--You have to wonder how our City survives given all the shenanigans and mismanagement by the Mayor and the members of the City Council, whether it be bribery (excuse me, campaign contributions), the Exclusive Trash Franchise (the “Trashopoly”), the City’s $15 billion unfunded pension liability, or sexual harassment.
Today, we will comment briefly on each of these subjects in an attempt to ruin your weekend.
LA WATCHDOG--As a result of an excellent investigative report by Los Angeles Times reporters David Zahniser and Emily Alpert Reyes (A $72 Million Apartment Project. Top Politicians. Unlikely Donors) in October 2016, District Attorney Jackie Lacey has filed felony charges against real estate developer Samuel Leong for laundering campaign contributions and attempted bribery in connection with the successful “up zoning” of his five acre industrial property to accommodate a $72 million development of a 352 unit apartment complex in the Harbor Gateway area of the City of Los Angeles.
LA WATCHDOG--The City of Los Angeles is hemorrhaging cash. So why are Mayor Eric Garcetti and the City Council entering into deals that are providing almost $1 billion of tax breaks for projects that already have excellent rates of return for their deep pocketed investors?
LA WATCHDOG--One of Mayor Eric Garcetti’s Back to Basics Priority Outcomes was the repair our streets. But after almost five years as Mayor, very little progress has been made as “nearly 40% of our City streets have a D or F rating and more than 8,700 miles of streets in the City need rehabilitation” according to a recent motion filed by Councilmen Mitch Englander and Joe Buscaino.
LA WATCHDOG--At the conclusion of a six hour meeting of the City Council’s Energy, Climate Change, and Environment Committee (formerly known as the Energy and Environment Committee) to discuss the City’s botched rollout of the monopolistic Exclusive Trash Franchise system, most came away with the impression that little had been accomplished other than letting the Committee members blow off a lot steam.
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