In LA, It is Back to Basics

Jack Humphreville
LA Watchdog writer for CityWatch, President of the DWP Advocacy Committee, Ratepayer Advocate for the Greater Wilshire Neighborhood Council, and Publisher of the Recycler

Despite record revenues that are expected to exceed $5 billion, the City Council is considering a $4.5 billion tax increase over the next 30 years to fund the repair of our lunar cratered streets because of its inability to control ever escalating salaries, benefits, and pension contributions.

But the failure of the City Council to balance the budget despite record revenues is compounded by its unwillingness to endorse Mayor Garcetti’s “Back to Basics” priorities by “making government more efficient and effective.”

For example, if the City were to sell the Convention Center, it would eliminate over $400 million in debt and increase the City’s cash flow by $60 to $80 million a year.  More than likely, the sale price of this 870,000 square foot white elephant would be considerably more than the debt, generating additional cash to reduce the City’s outstanding debt, fund the repair of a portion of our streets, or finance the revitalization of the Los Angeles River.

As part of any sale, the buyer would be required to develop a world class facility that would attract top of the line conventions to the City, generating huge increases in hotel and sales tax revenues for the City’s treasury.

Furthermore, the development of the 54 acre Convention Center site by a well healed buyer would create a boat load of additional revenue for the City through development fees and higher property taxes, and, at the same time, create thousands of construction and full time jobs that would revitalize DTLA and stimulate our lack luster economy.

The City has also given lip service to “performance based budgeting.” However, the administration has not made any effort to “benchmark” its operations or any of it compensation and benefit policies with those of other governments or alternative providers.  This was a key recommendation to our Department of Water and Power by PA Consulting in its August 2012 report.  The City should also consider “outsourcing” noncore services to more efficient vendors, another common sense recommendation of PA Consulting.

Back to Basics Mayor Eric Garcetti and the City Council appear to be unwilling to endorse The Pension Reform Act of 2014 that is being sponsored by Chuck Reed, the Democratic mayor of San Jose, as well as the Democratic mayors of Santa Ana and bankrupt San Bernardino. If this measure is placed on the ballot and approved by the voters of California in November of 2014, the City of Los Angeles will be able to negotiate – through the collective bargaining process – a reduction in very generous and financially unsustainable future retirement benefits of current City employees.  Importantly, retirement benefits that have already been earned are vested and cannot be altered.

The sale and subsequent development of the Convention Center, the implementation of benchmarking and outsourcing policies, and meaningful pension reform, coupled with financial discipline in future labor negotiations, will result in savings of hundreds of millions of dollars a year.

These Back to Basic policies will allow the City to live within its means and to retain and restore core services, repair our streets, fund other worthwhile projects such as the revitalization of the LA River and the purchase of new black and whites and fire engines, and achieve Eric’s Back to Basic goals of a building a great city with a strong economy, safe streets, and a sustainable environment.

What we do not need is another brutal election where the occupants of City Hall, the less than honest sponsors of Proposition A (the permanent half cent increase in our sales tax that was rejected by 55% of the voters), and their special interest cronies hold our streets hostage for a $4.5 billion ransom.

Eric, the ball is you court.  Before City Hall tries to pick our pockets, you need to restore our trust and confidence in City Hall by going “Back to Basics” – as promised.

Cross-posted at City Watch LA.

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