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Budget Advocate Jack Humphreville: “LA’s City Finances are a Mismanaged Mess”

TPR INTERVIEW-Only a few weeks following the arrest of LA City Councilmember Jose Huizar on charges of corruption, TPR interviewed Jack Humphreville,

a CityWatch columnist, a retired small business owner and President of the DWP Advocacy Committee and Co-Chair of the Neighborhood Council Budget Advocates, to ascertain his views on the Los Angeles City Council’s failure to address budget shortfalls stemming from budget-busting labor agreements and lack of leadership. Humphreville opines—given the lack of budget information being shared by L.A. City Hall during the pandemic—on the need for more transparency and accountability for the handling of public funds. Citing losses of $1 billion per fiscal year going forward, he asserts shortfall stems from misspending and lack of expert-guided fiscal decision making.

"We've been asking for an Office of Transparency and Accountability, similar to the LA2020 Commission did back in 2014—that would have the ability to oversee the city's finances and related matters, importantly in real time, not weeks or months after everything's happened." "Over the next four years, from 2022 to 2025, the city is projecting a budget shortfall of $765 million and that's under optimistic assumptions." —Jack Humphreville

Begin by sharing your longstanding concerns about the fiscal health of the city of Los Angeles. 

Jack Humphreville: It's sort of like pounding your head against the wall when you're dealing with these guys at LA City Hall. 

Since Eric Garcetti became mayor, we've had record revenues, and yet prior to the virus, we were talking about a deficit. Last fall, the City Council and the Mayor agreed to new labor agreements, which blew a massive hole—$1.5 to $2 billion—in the budget for the next 4 to 5 years. Prior to these labor agreements, we had a balanced budget, and for the following 4 years we had a $200 million surplus. We overcame the structural deficit, but as a result of the labor agreements, this year’s budget went from being balanced to being about $150-$200 million in the hole. The projected cumulative deficit over the next four years is about $1.2 billion. 

Now, the City Council is blaming everything on the virus, which is completely wrong. The problem is that we entered into these labor agreements. Paul Krekorian, chair of the Budget and Finance Committee, refuses to take responsibility for the Committee's malfeasance on the matter, and it's very frustrating.

They talk about how great the Reserve Fund is, but it should've been double the size given the city’s record revenues. We should have done something about pensions or fixed our infrastructure; we have some of the worst roads in the country. 

Elaborate on the transparency to the public of the City’s fiscal records?

I will give the City credit for the Council File Management System, which is a lot better than others—especially the County and the State. Once these documents are published, they’re easy to get ahold of them for the most part. The City Administrative Office does a pretty good job being open and transparent about what’s going on.

What is frustrating is that the decision-making process is all done behind closed doors. You only find out what's happened after it's happened, so we get very little input. 

How do they make decisions, especially when it comes to dealing with the public-sector labor unions who have a lot of sway because of their political clout? There's a basic conflict of interest here …  (Read the rest here.)

 

(For more than three decades, The Planning Report < https://www.planningreport.com/has been the preeminent trade publication where the region's leaders engage in substantive debate about urban planning, growth, design, and public infrastructure investment.

The opinions expressed by Jack Humphreville are his own and not those of any affiliated organization.)

-cw