GPW: Self-Tempered Anarchy since 2009

Your GPW Editor-on-Occasion is Petra Fried in the City.
Send us your stories, ideas, and information. Insiders welcome - confidentiality guaranteed.

stories along The Way

Thursday, January 21, 2010

B-Word no longer 'that which shall not be spoken' *

bankruptcy bankruptcy bankruptcy

Suddenly it's okay to say The B Word at City Hall if recent reporting by D-Zahn is any indication. Let me say that again: BANK-RUPT-CY!

whew! That feels better ... in a perverted sort of way.

I was saying this when it wasn't popular, thinking out loud during my tenure on Mayor Sam that April 2010 might be the month the City is forced to file Chapter Nine. I know - noone cares. Yeah, but it's now January and we now have a public - if leaked - revelation that City tax revenues are well below the magic $100 million threshold that triggers more possible layoffs whether the unions like it or not.

If Tony and his Fifteen Fiefs do engage in the kind of layoffs threatened in that leaked memo (see below), City employees will be hit hard. But the hardest hit will be we citizens who won't have any City services remaining.

Forget the layoffs, Mayor V and chums. Go Chapter 9 and let a real professional who has a fiscal clue - unlike you - reorganize with proper financial planning that includes reasonable benefits for public employees, and keeps what's left of our City services working for us taxpayers.

You've effed it up too bad to repair. Only an idiot talks about selling off revenue-making services like golf courses and parking structures. For this, you shouldn't even still be in office, sir. Much less telling the LA Times how great your wonderful life is. Insensitive jerk.

Embrace the infamous B-Word. You too, Paul K. And Paul H.

Try not to cry or scream as you read the following two feel-good stories from D-Zahn and friends at the LA Times.

Aside - someone please tell Meg Whitman to STFU on KNX. Six-seven ads an hour and people will start campaigning against you just because. (....since KFWB changed programming, KNX is the only pure news game in town. )

More grim budget news for L.A.: Tax revenue falls short by $186 million

January 21, 2010 | 9:23

The bad financial news just keeps coming at Los Angeles City Hall, where the top budget analyst reported this morning that tax revenue has come in at $186 million below estimates for the current year The report from City Administrative Officer Miguel Santana comes one day after The Times reported that Mayor Antonio Villaraigosa and City Council leaders want to deal with the budget crisis by eliminating at least 1,000 jobs.Sales tax revenue declined by 16% last summer, instead of the 6% drop expected by city budget officials, the report states. And overall tax revenue has declined by double digits for four quarters straight, Santana said in an e-mail to The Times
“The city hasn’t seen this since the Great Depression,” he wrote. With a new fiscal year – and another budget shortfall -- only five months away, the city’s elected leaders have been scrambling to come up with a new plan for closing this year’s gap. Villaraigosa and five council members circulated a letter calling on Santana to prepare for layoffs and come up with a plan to offer 364 workers retirement up to five years early.

The city has already agreed to give early retirement to 2,400 city employees, some of whom have already left. One labor leader has voiced opposition to more job cuts. The letter also called on Santana to speed up plans for leasing city parking structures, giving him a deadline of Sept. 30. And it broached the subject of privatizing the Los Angeles Zoo and municipal airports in Van Nuys and Ontario, asking him to look at the concept.

-- David Zahniser at Los Angeles City Hall

Letter reveals L.A.'s plans for more layoffs

A decline in revenues may mean that at least 1,000 jobs are eliminated, according to the letter, which is being circulated among city leaders.

By David Zahniser and Phil Willon
January 20, 2010 | 8:44 p.m.

Los Angeles Mayor Antonio Villaraigosa and City Council leaders have begun laying the groundwork for the elimination of 1,000 more jobs by July 1 in an attempt to eradicate a budget shortfall that has now ballooned to nearly $200 million. Only one month after 2,400 city employees were offered early retirement to help patch a budget gap, the mayor and five council members are scheduled to instruct their budget analysts as early as today to prepare for layoffs and look at privatizing city-owned parking garages, golf courses and airports in Van Nuys and Ontario. "Revenues are significantly lower than original projections and we are prepared to make tough decisions, including layoffs and cuts in less-essential city services to our constituents," states a letter being circulated among city leaders. A draft copy was obtained by The Times. "We will consider the elimination, consolidation, or outsourcing of city assets and services, furloughs and layoffs where permissible, continued managed hiring with consideration of a hard hiring freeze and public-private partnerships that will generate revenue."

Three council members -- Bernard C. Parks, Jan Perry and Dennis Zine -- confirmed that they had signed the letter but declined to discuss its contents. Villaraigosa Deputy Chief of Staff Matt Szabo said late Wednesday that the letter was not ready for release. The proposals are a sharp reaction to word -- still unofficial -- that city tax revenues have continued a dramatic decline over the last three months. Villaraigosa and the council have already tried to close this year's budget gap by imposing furloughs, rolling back salaries and cutting some city services. Since then, the budget crisis has moved into even more treacherous territory, with officials openly worrying about their ability to pay normal operating expenses over the rest of the year. Without any cuts, the deficit is expected to grow to $1 billion by 2013-14, according to official projections. "The threat of bankruptcy is real," said Parks, who heads the council's Budget and Finance Committee. "How likely it is depends on how well we manage things over the next few months."

When the Coalition of L.A. City Unions agreed to an early retirement program months ago, its leaders secured a pledge of no layoffs and furloughs over the next two years. But that promise left the layoff door open if tax revenues dropped by $100 million in a single year. That threshold has now been crossed, council members said Wednesday. Coalition spokeswoman Barbara Maynard said city leaders should not demand another round of salary negotiations until they have tried alternatives that have already been offered by her group, which represents 22,000 city employees. Maynard said 3,000 city workers applied for early retirement but only 400 have yet left the payroll. "They are exacerbating their budget problem by not moving their people out quickly," said Maynard, adding: "The city bureaucracy has been very slow in implementing these savings."

The draft letter obtained by The Times calls on City Administrative Officer Miguel Santana to look at a number of ways to reduce salaries and retirement costs. It also urges him to prepare for "no less than 1,000" job cuts and to plan for offering early retirement to an additional 300 employees. The city's mechanism for imposing layoffs is slow and byzantine -- unless officials decide to target only those workers who have been recently hired and are at the bottom tier of the workforce. A seniority system allows older employees to bump younger one out of their jobs, a process -- known as cascading -- that can take months. To get through the next 5 1/2 months, Villaraigosa and council leaders will probably need to tap the city's emergency reserve to close such a large shortfall. Yet if they do, Wall Street could downgrade the city's already weakened credit rating, a move that would increase the cost of borrowing necessary to keep paying the city's bills. "Depleting the reserve fund is a huge problem," City Controller Wendy Greuel said.

(Looking forward to your new news blog in 2010, D!)