LA WATCHDOG--The City Administrative Officer’s Third Financial Status Report dated March 16 paints a bleak picture of the City’s finances, including the previous sacrosanct Reserve Fund.  

For the current year, the City is looking at a $57 million deficit.  But this does not take into consideration the strong probability of lower revenues from property and sales taxes, taxes on DWP Ratepayers (the 10% Utility Users’ Tax and the illegal 8% Transfer Tax), departmental fees from the City’s proprietary departments and special funds, parking fines, and franchise fees.  These dings more than offset the growth in the hotel tax and the documentary transfer tax. 

The Report also indicates that next year’s budget gap is anticipated to be $224 million.  But even this projection for the fiscal year beginning on July 1 may be understated because of lower than anticipated revenues and the demand for increased services.  

One of the culprits in this year’s deficit is the explosion in legal liabilities as the City is anticipating spending $147 million in settlements and judgments, almost $80 million more than the budgeted liability of $68 million.  To cover these higher than anticipated losses, the City is hitting up the Reserve Fund for over $60 million. 

Unfortunately, the Reserve Fund no longer has a surplus that can be tapped unless it is a true emergency.  As of January 31, the Reserve Fund had dipped slightly below the minimum threshold of $279 million, an amount equal to 5% of General Fund revenues of $5.576 billion. 

To replenish the Reserve Fund, the City is pursuing the issuance of $70 million of Judgment Obligation Bonds.  But ev en with this infusion, the Reserve Fund may not be able to absorb this year’s losses, especially if revenues are lower than budgeted.  

This will also preclude the Mayor and the City Council from raiding the Reserve Fund.  

Over the last three years, the Mayor and the City Council have siphoned off $213 million from the Reserve Fund without blinking an eye.  

But were these financial transactions necessary given that City revenues have increased by $900 million over the last four years? 

Why did the Budget and Finance Committee chaired by Paul Krekorian permit this transfer from the Reserve Fund?  

Why did the Budget and Finance Committee allocate only $68 million for legal liabilities when the City Administrative Officer recommended a significantly higher amount? 

If the Reserve Fund had the $213 million that was drained from its accounts, the balance of our rainy-day fund would be almost $500 million, or 8.8% of the General Fund revenues. 

And if you toss in the Budget Stabilization Fund of $94 million, total reserves increase to $585 million, or a very healthy 10.5% of General Fund revenues, exceeding the 10% level recommended by Miguel Santana, our previous CAO.  

This is another case where the politically motivated spending policies of our Elected Elite trumped the long-term interests of the City.  This is reminiscent of their failure to fund the repair and maintenance of our lunar cratered streets, our broken sidewalks, and the rest of our deteriorating infrastructure; their unwillingness to engage in real pension reform; and their approval of budget busting labor contracts. 

We cannot trust Mayor Garcetti, the City Council, and the Budget and Finance Committee with our money.  

We need an independent Office of Transparency and Accountability to oversee the City’s finances and protect us from the Mayor and the City Council pursuing short term political goals that are not in the best long-term interests of the City and all Angelenos.

(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:  lajack@gmail.com.)

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LA WATCHDOG--Mayor Eric Garcetti is proposing to close part of the City’s $250 million budget gap for next year by using an estimated $50 million of Local Return money from Measure M, the permanent half cent increase in our sales tax that was approved by 71% of voters in November

While the bulk of the proceeds of this new tax are to be used to finance Metro’s ambitious capital expenditure program and its money losing operations, 17% of the proceeds are designated for “Local Return.” Under this program, funds are returned to the cities based on their population for the communities’ “eligible transportation related uses.”  These transportation needs include “transit, streets and roads, storm drains, Green Streets, Active Transportation Projects, Complete Streets, public transit access to recreational facilities, Transit Oriented Community Investments, and other unmet transit needs.” 

Importantly, these Local Return funds are meant to supplement existing programs and not to free up money for the General Fund and other programs. In other words, they are not to be used for deficit reduction. 

In recent interviews and during the campaign to pass Measure M, Garcetti said that these Measure M Local Return funds were to be used to fix, pave, or repair our streets.  

In the upcoming year, the Local Return from Measure M is expected to be about $50 million.  And over the next 40 years, the total haul is projected to be in the range of $5 billion based on Metro’s projections. 

The infusion of these Local Return funds represents an excellent opportunity to jump start the development and implementation of a comprehensive plan to repair and maintain our 28,000 lane miles of streets, considered to some of the worst in the country, and 900 miles of alleys.  A well-conceived long term plan will also go a long way in relieving congestion, the worst in the developed world per a recent article in The New York Times. 

The City’s current street repair program, dubbed the pothole patrol plan, is not working.  While City Hall tells us that the status of our streets has improved slightly because Street Services is budgeted to pave or repair 2,400 miles of roads this year, most Angelenos believe, based on experience, especially after the rains, that our streets have continued to deteriorate.  Furthermore, the pothole patrol plan neglects the more than one third of our streets that are rated D and F, meaning that they need to be either resurfaced or reconstructed, all at great expense. 

If the City combines the resources of the Local Return funds with the current expenditures of the Street Services and Transportation devoted to our roads, it can develop and implement a street repair program that over the next twenty years will make our streets some of the best in the nation.  

Now that is Back to Basics. Forget the photo-ops. Keep your promises. Fix LA’s streets!

(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:  lajack@gmail.com.)

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LA WATCHDOG--One of the Priority Outcomes of Mayor Eric Garcetti s Back to Basics agenda was that the City of Los Angeles would “live within its financial means.” 

But this is not the case. 

The City is grappling with a potential deficit of $245 million for this fiscal year that ends on June 30 and a budget gap of at least $250 million for the fiscal year that begins on July 1.  This is despite revenues being up over $1 billion since Garcetti became Mayor. 

These deficits are understated.  They do not include adequate funds to repair and maintain our streets, sidewalks, parks, and the rest of our deteriorating infrastructure.  They lowball the pension contributions that are determined using an overly optimistic investment rate assumption that “save” the City an estimated $500 million a year.  

The impact of these deferrals is to dump an even larger financial burden on the next generation of Angelenos.  

Projections for the next four years do take into consideration future salary increases for the police, civilian employees, and the firefighters. 

It is not a pretty picture.  

On March 8, the Budget Advocates, a volunteer group of citizens representing the charter authorized Neighborhood Councils, met with Mayor Garcetti and members of his budget team to discuss their annual White Paper and their “Back to Basics” Plan which includes the following recommendations. 

  • Develop and implement a seven-year operating and financial plan for the City.  This is standard operating procedure for an enterprise with revenues of over $8 billion a year and 32,000 civilian and sworn employees. 
  • Address the Structural Deficit (where expenditures increase faster than revenues) by refraining from entering into any labor agreement or approving any new programs or initiatives that will result in future budget deficits. 
  • Require that ALL projects take into account the costs and savings over the entire life of the project, including ancillary costs and savings incurred by other City entities and stakeholders. 
  • Develop and implement a long-term plan to fix our streets along the lines of the Save Our Streets LA Measure that was proposed in April 2014. 
  • Implement a long-range plan to grow the City’s economy by developing new business friendly policies that encourage employers to move to LA or to remain and invest in LA. 
  • Benchmark the efficiency of the City’s departments and services and consider outsourcing projects to independent contractors. 
  • Appoint an experienced Chief Operating Officer/City Manager to oversee and coordinate the management of the City’s many departments and to improve their operating efficiency.    

In addition, the Budget Advocates once again urged the Mayor and the City Council to implement the following excellent budget recommendations of the LA 2020 Commission that were endorsed by City Council President Herb Wesson at a well-attended press conference on April 9, 2014 at the California Endowment. 

  • 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 of understanding the longer-term consequences of its policies and legislation.  
  • Establish a “Commission for Retirement Security” to review the City's retirement obligations to promote an accurate understanding of the facts and develop concrete recommendations on how to achieve equilibrium on retirement costs within five years.  This Commission will also address the Buffett Rule and the investment rate assumptions of the pension plans. 

Unfortunately, these recommendations that were designed to shine the sun on the City’s finances and operations have never seen the light of day. 

In addition, the Budget Advocates have developed a list of revenue producing ideas for the General Fund.  This resulted in a discussion about the specific suggestions and the City’s need for additional revenue to address our infrastructure, service levels, affordable housing, and services to the homeless.  

The Budget Advocates also submitted reports on 26 of the City’s departments.  They were based on numerous in person meetings with department heads that allowed the Budget Advocates to gain a better understanding of the departments and the overall operations of the City.  These reports also contain recommendations specific to the departments. 

The Mayor, recognizing the time, effort, and dedication of the Budget Advocates, will ask the City Administrative Officer and his budget team to report back on the White Paper and its findings and recommendations.  Hopefully, this response will be shortly after the release of next year’s budget on April 20 so that Budget Advocates have ample time to prepare for the Budget and Finance Committee hearings on the budget.  

The development of and the adherence to a long term operating and financial plan, the implementation of a Back to Basics Plan, the adoption of the recommendations of the LA 2020 Commission, the develop of new sources of revenue, and an improved business and investment environment will result in increased revenues for the City that will allow it to eliminate the Structural Deficit, to address its infrastructure needs, and to begin the proper funding of its pensions. 

By increasing the transparency onto the City’s complex operations and finances and by implementing policies that require the City to “live within its means,” City Hall will begin the process of restoring Angelenos’ trust and confidence in its elected officials.

 (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:  lajack@gmail.com.)

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LA WATCHDOG--We have numerous reasons to vote against all the fat cat incumbents running for reelection to the Los Angeles City Council.  And they all add up to a City that does not work for us Angelenos, the folks footing the bill so that the 1% who occupies City Hall and their cronies can feast at our expense. 

Our City’s finances are a mess.  

The City is projecting a budget deficit next year of at least $250 million.  Union leaders want more money that will only add to the deficit.  The City’s two pension plans are a train wreck, underfunded by $22 billion and threaten the City’s ability to deliver services.  And our lunar cratered streets, our broken sidewalks, and the rest of deteriorating infrastructure are in need of at least $10 billion of repairs. 

But the City’s viability is not an issue for six members of our City Council who are seeking reelection.  After all, they have raised over $5.5 million from their cronies and special interests to buy their reelection. 

But hopefully Angelenos will wake up and send these politicians packing. 

At the top of the list is Paul Koretz, a professional politician who has never met a tax hike, a rate increase, a union contract, or campaign contribution from a real estate developer he didn’t like.   

Koretz is a member of the Executive Employee Relations Committee that negotiates the City’s labor agreements.  This includes the budget busting contract with the City’s civilian unions that took a $68 million surplus to a $101 million deficit in 2020.  That may explain why the unions have contributed $217,000 to an “independent” expenditure committee to support his reelection to augment the $440,000 war chest that he raised from the usual favor seeking suspects.  

His key opponent is Jesse Creed, a young talented lawyer who received excellent reviews for his work on behalf of veterans involving the West LA property.  While Creed lacks experience, he is independent, his own person who is not owned by the unions and real estate developers.    

Mitch O’Farrell should also be shown the door as he betrayed his constituents by selling out to real estate developers who view Hollywood, Silver Lake, Atwater Village, Echo Park, and Elysian Valley as areas primed for highly profitable development, the neighborhoods be damned.  

O’Farrell has raised over $400,000, where almost half of the usual favor seeking suspects maxed out.  He is also the beneficiary of a $102,000 “independent” expenditure committee funded by real estate interests, unions, and Chevron Corporation, one of the world’s largest oil companies. 

In the effort to Ditch Mitch, the goal is to force a runoff with one of the other viable candidates.  This includes Doug Haines who has been endorsed by Mayor Richard Riordan because of his real estate expertise and his efforts in overturning the Hollywood Community Plan that was based on flawed assumptions.  He also was instrumental in halting other illegal developments that had the support of developer owned O’Farrell. 

Gil Cedillo should also be sent packing as he has supported the development of luxury housing that is inappropriate for many of the District’s neighborhoods.  This has accelerated residential and commercial gentrification and dislocated long-time residents.  He has also reneged on several campaign promises. 

Cedillo was expecting to steamroll his opponents as he has raised $375,000 from the usual favor seeking suspects, 75% of which maxed out, and has the support of an “independent” expenditure committee that has also been funded primarily by Chevron. 

However, much to Cedillo’s surprise and chagrin, the Los Angeles Times endorsed Joe Ali-Bray, a small businessman and bike enthusiast who, according to The Times, has an impressive understanding of land use policies.  

Curren Price was also surprised by The Times endorsement of Jorge Nuno.  Yet Price has the benefit of a $422,000 war chest and an “independent” expenditure committee that is ready to drop almost $150,000 to support his reelection. But will Price, an African-American, be able to buy the election in a district that is almost 80% Latino? 

Joe Buscaino has raised $369,000 and faces limited competition.  But he does not deserve to be reelected given the scandal where he took $94,500 of laundered campaign contributions and then approved the up zoning of the Sea Breeze residential development despite its rejection by the both the Area and City Planning Commissions. 

Mike Bonin appears to be headed towards reelection and is supported by a war chest of $432,000 raised from the usual favor seeking suspects and a $61,000 “independent’ expenditure committee funded by primarily by the unions representing the police and firefighters. But Bonin has been weak on fiscal responsibility and has approved mega real estate developments that will further clog the Westside. 

It is too much to expect all of the incumbents to lose, but success will be measured by ousting incumbents or forcing Council members into runoff elections on May 16, 2017.  If so, this will send a message to City Hall that we are not happy campers and it is time to address the serious economic problems facing our City. 

It is time for a change.

 

 (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:  lajack@gmail.com.)

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LA WATCHDOG--The City of Los Angeles is confronting a budget gap next year of “at least $250 million” based on Mayor Eric Garcetti’s comment to Larry Mantle, the host of KPCC’s (89.3) AirTalk.  

But this not very well publicized shortfall of at least $250 million may be optimistic. The City believes that the $245 million Power Revenue Transfer Tax (previously known as the 8% Transfer Fee) from the Department of Water and Power, which is the subject of a class action lawsuit, is legal and does not require voter approval pursuant to Proposition 26 (the Supermajority Vote to Pass New Fees and Taxes) that was approved by California voters in 2010.    

Garcetti did not offer any reasons for this staggering $250 million shortfall that exceeds the previously projected budget gap of $85 million.  Nor did he discuss any specific plans to reduce this gap other than to say that the City will rely on several new sources of revenue. 

But these new revenues are not for deficit reduction.  Rather, they are intended to augment existing programs.  This is certainly true for the $50 million of new “Local Return” money from Metro that is designated for the repair and maintenance of our lunar cratered streets. These kickback funds are the result of the passage of Measure M, the permanent half cent increase in our sales tax to fund Metro’s ambitious expansion plans and its ever-increasing operating deficits. 

He also said that he would not institute any new spending polices other than for the homeless, public safety, and the restoration of services.  But these new initiatives will cost north of $100 million.  So much for austerity.  

Underlying the $250 million budget gap is a significant increase in City’s legal liabilities and even greater shortfall in revenues.  Property and sales taxes are anticipated to be $50 million lower than expected while revenue from taxes on the DWP Ratepayers are off by approximately $75 million. 

There is something very fishy going on with the Power Revenue Transfer Tax because of the class action lawsuits that were filed in 2015. 

This year, the Power Revenue Transfer Tax was budgeted to be $291 million.  However, because DWP overestimated the Power System revenue by 10%, or $300 million, the Transfer Tax was only $264 million, a $27 million shortfall.  

For the upcoming year, the Transfer is projected to be $245 million (6.5% of Power System revenues), down from the previous projection of $300 million (8% of revenues).  This dip, despite DWP’s increase in revenues, gives credence to the scuttlebutt that City Hall has cut itself a sweet deal with the lawyers representing the plaintiffs in the class action lawsuit (Patrick Eck v. City of Los Angeles).    

Of course, the lawyers will make out like bandits. 

And the Ratepayers, rather than being reimbursed for over $1.5 billion in illegally collected taxes (not including interest) and abolishing the illegal Power Revenue Transfer Tax, will once again get the shaft as we will end up paying $245 million a year to the pay-to-play politicians who occupy City Hall. 

But this backroom settlement that was cut over two months ago may not pass legal muster.  Under Proposition 26, this so-called fee that is really a tax must be approved by the voters, a rumble that City Hall wants to avoid.  This may be the reason why the City has not announced this deal because they cannot figure out how to disenfranchise us by not placing this tax on the ballot for our rejection or approval. 

If this crooked deal does not pass the smell test, our friends that occupy City Hall will go ballistic as the projected budget deficit will balloon to $500 million.  

But this sea of red ink is not our fault as the Mayor and the City Council have racked up a $250 million budget gap despite an increase in General Fund revenues of $1 billion.  City Hall has also been on notice for years that the Power Revenue Transfer Tax is illegal, but failed to address the issue in a rational manner. 

City Hall will no doubt ask us to approve this tax.  But what do we get in return?  Maybe it is our turn to ask that in return for approving this new tax, the City will agree to place on the ballot a charter amendment that will finally require our City to go Back to Basics and Live Within Its Means. 

Hold on as we are in for a wild ride.  Budget Madness begins on April 20 when the Mayor presents his new budget to Angelenos. 

 (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:  lajack@gmail.com.)

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LA WATCHDOG--Money is the life blood of politics, especially for the politicians that occupy Los Angeles City Hall and the County Hall of Administration. 

So when our Elected Elite support or oppose a ballot measure, we need to follow the cash to determine their true motivations. This is especially true for Measure S, the Neighborhood Integrity Initiative, and Measure H, the quarter of a cent increase in our sales tax that will fund services to the homeless. 

Measure S requires that the City update the General Plan and its 35 Community Plans and assume the responsibility to oversee the development of Environmental Impact Reports and Traffic Studies.  Measure S also eliminates “spot zoning” and places a 24 month moratorium ONLY on “up zoned” projects that would have received lucrative zoning changes, courtesy of the City Council and Mayor Eric Garcetti. 

The delusional opponents claim that Measure S will make it impossible to build the affordable housing that LA desperately needs.  But the truth is that City Hall does not have a plan to build affordable housing or the necessary billions to fund such a plan.  

And now that the voters have approved JJJ, the Build Better LA ballot initiative, the cost of affordable units will increase by 46% according to Beacon Economics, the firm retained by the Los Angeles Chamber of Commerce, an ardent foe of Measure S. This massive cost increase will kill all residential development that needs a zoning change, whether it is luxury, market rate, or affordable.  

The real reason for the opposition of Garcetti and the City Council is that if Measure S passes, the gravy train that has resulted in more than $10 million in campaign contributions from real estate developers will come to a stretching halt as City Hall will no longer be able to grant lucrative zoning changes to billionaire developers who have no respect for our neighborhoods and our quality of life. 

With the passage of Measure S, the days where the real estate developers make billions, the City Hall politicians collect millions, and we get the shaft are over. 

We will finally get a say in the destiny and density of our City and our neighborhoods as Measure S will require the City Planning Department to hold hearings on weeknights and weekends in our neighborhoods.  No more schlepping downtown to City Hall during the day and only getting a minute to speak. 

Measure H, the County ballot initiative to increase our sales tax by one quarter of cent, will raise $350 million to fund services for the homeless.  While nobody denies that there is a homeless crisis, the County Supervisors have not made homelessness a budget priority, even after billions in new revenues swelled its total budget to $30 billion.  Instead, the Supervisors approved new budget busting labor contracts and funneled money to their pet projects. 

Homelessness only became a budget priority when they decided to pick our pockets for $4 billion over the next ten years. 

The Supervisors and Mayor Eric Garcetti have been telling us that without this $4 billion tax increase, the County will not be able to provide the necessary services to the homeless population.  But this sounds like the threats made in 2013 when Mayor Villaraigosa and LAPD Chief Charlie Beck told us that LA would be overrun by the Huns and Visigoths if we did not approve Proposition A, the half cent increase in our sales tax that was to be used to hire and retain more cops.    

But shortly after Proposition A was rejected by 55% of the voters, Mayor Villaraigosa miraculously discovered the necessary money to fund the Police Department. 

There is also the issue of trust.  

In November, voters approved Measure M, a permanent half cent increase in our sales tax to fund Metro’s ambitious expansion program and its money losing operations.  But the Supervisors and Mayor Garcetti were less than honest with us.  They waited until after the election to disclose the massive cost overruns involving the widening of the 405 through the Sepulveda Pass, the Downtown Regional Connector, and the Gold Line Foothill Extension.  And they failed to tell us about the decline in ridership. 

The City, County, and State are also hatching more schemes to increase our taxes.  In addition to Measure H, the County is preparing another Rain Tax to fund its storm water capture plan.  The City is considering a multibillion street repair bond and a linkage fee on new developments.  The South Coast AQMD is talking about a Vehicle License Fee.  The State is considering a substantial bump in the gas tax and expanding the sales tax to cover services.  And billions in bonds are being contemplated for the UC system and the State’s deteriorating parks. 

The 2016 tax increases and the above contemplated taxes will cost the residents of the City of Los Angeles over $3 billion, the equivalent of raising our real estate taxes by over 60% or our sales tax by over 5%. 

Enough is enough.  

By voting YES on Measure S, the City will be required to update its General Plan and its 35 Community Plans in an open and transparent manner where we have a say in the future of our City.  And at the same time, put a stop to the corrupt pay-to-play culture that permeates City Hall. 

And by voting NO on Measure H, we can send to message to the pols that we are not their ATM. 

It is time for us to take control of our City and our County.

(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:  lajack@gmail.com.)

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LA WATCHDOG--The City of Los Angeles is drowning a sea of red ink. 

Its budget deficit for the upcoming fiscal year beginning July 1, 2017 is projected to be in the range of $200 to $250 million.  This is up from the $85 million shortfall that Mayor Eric Garcetti outlined in his “Fiscal Year 2017-18 Budget Policy and Goals” memo in September.  

There is also the real possibility that the cumulative budget gap for the next four years may soar to well over $750 million, up from the current estimate of $300 million.  

But Eric, how is this possible if City revenues are $1 billion higher than they were four years ago and collections are projected to increase by $600 million over the next four years? 

In January, the City Administrative Officer indicated that the City was looking at a potential budget deficit of $245 million for this fiscal year (2016-17).  This contrasts with the “balanced” budget only six months earlier.  

Expenditures rose by an unexpected $80 million over budget, primarily because of runaway legal settlements that will be in the range of $140 million (or more) this year.  This is more than double the budgeted liability of $68 million.  

Revenues were off by $165 million.  This shortfall included $90 million in lower collections from property taxes, sales taxes, and taxes on the revenues of our Department of Water and Power.  

These expenditure and revenue trends are expected to impact next year’s budget, increasing the September deficit of $85 million to $200 to $250 million. 

The deficit for the following year (2018-19) is expected to grow as new labor contracts for the police and civilian workers will go into effect, probably adding $50 to $100 million to the projected deficit.  

As if these deficits were not bad enough, the budget outlook does not include adequate funding to repair our lunar cratered streets and cracked sidewalks, despite an infusion of almost $50 million from the Local Return provisions of Measure M, the half cent increase in our sales tax that was approved by 71% of the voters in November.  

Nor do the projections include sufficient monies to offset the deferred maintenance on the City’s infrastructure, including our run down parks, our urban forest, its Stone Age management systems, and its aging buildings and facilities.  

The City’s Budget Outlook does not take into consideration higher pension contributions mandated by lower than anticipated returns on the investment portfolios of its two seriously underfunded pension plans and the impact of a lower investment rate assumption from the overly optimistic discount rate of 7½%.    

And what will happen if we hit another economic downturn that results in lower City revenues?  

With all this red ink and another budget crisis looming, why haven’t Mayor Garcetti and the Herb Wesson City Council adopted the four excellent budget recommendations of the LA 2020 Commission that were reiterated by the Neighborhood Council Budget Advocates in October? 

In 2014, one of pillars of Eric’s “Back to Basics” Priority Outcomes was that LA would “live within its financial means.”  But that is certainly not the case given the sea of red ink. 

The Neighborhood Council Budget Advocates are developing its own “Back to Basics” Plan that calls for, among other recommendations, long range planning; developing a plan to repair and maintain our streets, sidewalks and the rest of our infrastructure; refraining from entering into any labor contract that will result in future deficits; limiting the hiring of any new employees unless there is adequate funding; implementing pension reform; benchmarking the efficiency of the City’s workforce; and developing business friendly policies that will encourage employers to remain and invest in LA. 

The City’s impending financial fiasco has been kept under wraps so as not to endanger the reelection of Mayor Garcetti and seven members of the City Council.  Nevertheless, this mess will not go away, nor will the efforts to treat us like mushrooms, keeping us in the dark and dumping tons of ripe manure on our heads. 

(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:  lajack@gmail.com.)

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