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.
According to the First Financial Status Report prepared by the City Administrative Officer, the main culprit of this overspending is $51 million of Police Department overtime followed by $22 million of Fire Department overspending and $6 million of other departmental expenses. The balance of $20 million is related to Non-Departmental expenses.
This is obviously unacceptable as the annualized Departmental over expenditures of almost $80 million would result in a hit of close to $500 million a year.
But rather than acting with a degree of urgency, and recognizing that this is not the first time that Police overtime has been an issue, the City Council requested that the Sworn Overtime Task Force (consisting of representatives of the LAPD, the CAO, the Chief Legislative Analyst, and the Mayor’s office) report back in 45 days with its recommendations.
Give me a break.
The Mayor’s office should have a Chief Operating Officer who has the authority to act to cure this problem without having to consult with the City Council or the Mayor and his staff. As it is, none of these political operatives have any meaningful management or organizational experience, especially as it relates to a complex enterprise like the City with over 30,000 employees.
Unfortunately, Mayor Garcetti has dismissed the recommendations of the Neighborhood Council Budget Advocates to hire an experienced Chief Operating Officer to oversee the City’s operations, administration, and finances. This would improve the efficiency, accountability, and transparency of the City’s sprawling bureaucracy, a policy that is not in the Mayor’s playbook despite his “Back to Basics” pledge.
The City does not have the financial flexibility to absorb these “over expenditures” because its budget is hardly balanced, contrary to what the Mayor and City Council are telling us.
The current budget fails to take into consideration raises of an estimated $40 million for the City’s 20,000 civilian workers who have been without a contract since June 30. Furthermore, City Hall is raiding its rainy-day funds for about $90 million, relying on unidentified efficiencies, and is underfunding the repair and maintenance of its infrastructure, including its streets, sidewalks, parks and their disgusting restrooms, trees, and street lights.
Overall, the City is facing a $200 million deficit this year.
Longer term, the CAO’s Four-Year Budget Outlook understates the Structural Deficit. While Garcetti is touting a $100 million surplus for the 2023 Fiscal Year, the deficit is almost $250 million when raises for the police, firefighters and civilian workers are included. And if you include proper funding for the repair and maintenance of the City’s infrastructure ($250 million) and increased pension contributions ($500 million) based on a more realistic, yet still optimistic 6.25% investment rate assumption, the annual short fall soars to $1 billion.
The First Financial Status Report is another red alert telling us that Mayor Garcetti needs to focus on the City’s finances, not only its yearly budget, but the Structural Deficit that is running at a rate of $1 billion a year, the City’s deferred maintenance budget of at least $10 billion, and the unfunded pension liability of $15 billion.
Of course, some would say we are better off with Garcetti out of town.
(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. He can be reached at: email@example.com.)