LA WATCHDOG - The most pressing issue facing the City is its very solvency.
Yet the two remaining candidates for Mayor, City Hall veterans Eric Garcetti and Wendy Greuel, have failed to give us any concrete plans on how to save our City from going broke and to prevent our children and grandchildren from being saddled with over $30 billion in debt, unfunded pension liabilities, and deferred maintenance on our lunar cratered streets and the rest of our failing infrastructure.
Next year, the City is projecting a budget deficit of $216 million, although post-election revelations by our ethically challenged mayor indicate that the deficit may be more in the range of $100 million.
However, Miguel Santana, the City Administrative Officer, estimates the current deficit to be in the range of $150 to $165 million.
But we have not heard any specific solutions from either Garcetti or Greuel about how to balance the next year’s budget.
Wendy’s “waste, fraud, and abuse” and Eric’s more “good green jobs” do not pass muster.
Do they support the recommendations of the CAO to reduce or maintain current employee compensation levels; to reduce or maintain current employee healthcare costs; or to mitigate the future and on-going cost of living increases?
Do they support the establishment of public private partnerships for the Zoo, the Convention Center, the golf courses, selected animal shelters, and the operation of the City parking facilities?
Do they support requiring that all City employees contribute at least 10% to the cost of their very generous healthcare plans, saving the City $40 to $50 million a year?
Over the next four years, the City is projecting a cumulative deficit of $1.1 billion.
But we have not heard any specifics on how Garcetti or Greuel would eliminate this budget gap.
Nor have they shared with us how they will address the Structural Deficit, where the escalation in labor costs of $750 million will outstrip the growth in revenues by almost $300 million.
Nor have we heard Garcetti or Greuel calling for labor negotiations to be conducted in an open and transparent manner as opposed to the current rigged system where labor contracts are cooked up behind closed doors by the Executive Employee Relations Committee whose members (Villaraigosa, Wesson, Reyes, Koretz, and Krekorian) have inherent conflicts of interest because they are beholden to the campaign funding union leadership.
More importantly, neither of these two professional politicians has endorsed placing the LIVE WITHIN ITS MEANS charter amendment on the ballot for the voters to consider.
Ironically, the Herb Wesson controlled City Council had no problem rushing Proposition A, the permanent half cent increase in our sales tax, onto the ballot in two short weeks without any hearings.
If approved by the voters, the City would be required to develop and adhere to a Five Year Financial Plan, approve two year balanced budgets based on Generally Accepted Accounting Principles, and, over the next ten years, fix our lunar cratered streets (and the rest of our deteriorating infrastructure) and fully fund the City’s pension plans that are $11.5 billion underwater.
This charter amendment does not specify how the City Council should allocate the City’s resources other than it requires the City to pay down the implicit, high cost debt associated with the unfunded pension liabilities (7.75%) and the additional costs associated with the further deterioration of our streets and the rest of our infrastructure.
Nor does this charter amendment have any restrictions on the growth in expenditures or reduction in taxes, other than they have to be fully funded.
As it is, the City Charter does not explicitly require that the City’s budget be truly balanced.
Otherwise, how would the City have been able to engage in Enron like accounting by deferring civilian raises, banking police overtime, and gaming the assumptions underlying the pension plan contributions?
We cannot afford a spineless City Council that is unwilling to make the tough calls on budget, pension, and work place reform.
Over the last seven years, labor costs have increased by more than $1.4 billion, $575 million more than the growth in revenues. And this differential is expected to increase another $300 million over the next four years to an 11 year total exceeding $850 million as a result of the Villaraigosa financial ineptitude.
Furthermore, the City will not be able to grow itself out of this mess unless the growth in revenues is twice the projected increases.
Over the next ten weeks, voters and the media will have the opportunity to demand answers from these two professional politicians as to how they intend to balance the budget over the next four years, whether they support charter reform of our busted financial system, and how they intend to eliminate the $30 billion burden on our children and grandchildren.
The vote of the “fiscally sane,” whether they are left, right or center, is up for grabs.
Eric and Wendy, we need answers. Many of us will be voting to save our City.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 11 Issue 21
Pub: Mar 12, 2013
