“Today we are facing the consequences of the city’s failure to enact the
necessary rate increases with Fitch Ratings, a major credit rating
agency, withdrawing the DWP’s AA- bond rating, thereby costing the
ratepayers more in the long run.” — Mayor Antonio Villaraigosa on blaming the City Council for possible downgrading of DWP bonds..
“It seems they are holding the whole city of Los Angeles hostage because
of their inability to hold up to their word.” — Council President Eric
Garcetti on DWP’s refusal to turn over $73 million in surplus power revenue to the general fund.
”We have two weeks to address this crisis, which is why you must act
immediately. I cannot be more clear that urgent action is needed.” — Controller Wendy Greuel on discovering the city will run out of cash May 5.
Leave it to our city leaders to point fingers at each other and act like they suddenly awakened to find that thieves had looted the city treasury and left it broke.
They are all to blame. They are the thieves who looted the treasury and bankrupted the city. They must be held accountable or our collective guilt over having elected them in the first place will become our collective responsibility for the destruction of our city.
This is an artificial crisis over the $73 million the DWP promised the city. It was engineered by the mayor more than month ago as part of his strategy to win approval for an endless series of huge electricity rate hikes to force the City Council to approve his green energy scheme to enrich his friends, appease IBEW boss Brian D’Arcy and fund a “job buying” plan.
The real crisis occurred 18 months ago when the mayor and Council were told by city financial analysts that they were on the road to bankruptcy and must act urgently.
A year ago, they were told the city’s financial situation had gotten worse and this year and every year after for the foreseeable future would be even worse. They did nothing.
Six months ago, they knew they would run out of cash by May unless they took drastic action. What little they did was worse than doing nothing. They papered over the problem by transferring money and workers from one fund to another, approving plans to borrow to the hilt and sell off valuable revenue-generating assets.
Most of all, they talked about laying off 4,000 workers and slashing services and imposing backdoor taxes but it was all just talk that achieved nothing except to expose how badly they had managed the city, how little they knew about the havoc and inefficiency their policies had caused in virtually every department.
This is no longer a political machine feeding itself and special interests at the public’s expense. It is a chaos machine cannibalizing itself and the lives of the four million people who call it home.
The mayor has conducted a pogrom against our democratic institutions, politicizing every member of every commission, people who are supposed to be citizen watchdogs protecting the public interest, and every top manager of every department, people who are supposed to be the public’s servants.
It’s clear that commissioners and bureaucrats alike will be fired for even the slightest hint of disobedience to mayoral orders that are ill-conceived or even corrupt.
It’s easier to understand why people who are paid will knuckle under than to understand why reputable people with private lives and incomes would be part of this, yet only Nick Patsaouras and Jane Usher showed the moral courage to resign in protest.
It is going to take a massive uprising by the public to turn LA around. It won’t be done by the politicians or civic leaders, by the business community or by labor.
To do nothing now is to be the moral equivalent of a ‘good German,’ complicit by passivity. There is no time to waste.
Today, the DWP Commission will approve spending hundreds of millions of dollars despite its fantasy financial crisis, some of which will be payback to AECON Corp. for helping to fund Deputy Mayor Austin Beutner’s “job-buying” program, the greatest achievement of which is giving away $6 million to buy 30 sweatshop jobs. The DWP can afford to spend so casually because it has $1 billion in cash lying around.
Today, the Council will take steps to eliminate virtually all of the public’s protections against destructive development projects and will give final approval to massive expansion of Playa Vista to enrich Goldman Sachs in gratitude for its help in funding Beutner’s efforts.
And they will sit around the horseshoe at City Council as they run through their agenda and blame the mayor for all that has gone wrong even as they put the bureaucrats once again through the fires of inquisition over why they have to cut services just because they are losing 30 or 40 percent of their staffs.
This would all be the stuff of comedy and farce if the consequences to kids and families, to businesses and workers, to health and public safety, to the future of the city were not so great.
We need new leadership. LA needs you. We need to fight them on every destructive act they attempt to make. We need credible new leaders to step forward and run for the seven Council seats on the ballot next March
If the mayor or Council members had a shred of common decency left, they would call together civic, business, labor and community leaders from across the city and start to go to work on how to rebuild LA together.
It’s not a mystery. It means real power sharing, complete transparency and accountability, a balance of competing interests and a commitment to the greater good of the greatest number.
If you won’t do the right thing now, it won’t make any difference later.
It’s easier to understand why people who are paid will knuckle under than to understand why reputable people with private lives and incomes would be part of this, yet only Nick Patsaouras and Jane Usher showed the moral courage to resign in protest.
Not sure about Usher, but it was pretty obvious back then that Patsaouras left the commission because he had to in order to run for City Controller. Protest had nothing to do with it.
Ron –
Terrific essay, as usual.
I disagree with you, however, on one point. This problem didn’t begin 18 months ago. It began no later than October 2005. That is when the City Administrative Officer (CAO) started issuing written warnings to Villaraigosa that he was overspending by hundreds of millions of dollar per year.
I wrote about it back in May 2008. Here’s my essay with quotations from the CAO memos:
http://web.me.com/waltermoore/WalterMooreForMayor/Essays/Entries/2008/5/24_Villaraigosa_Goes_All_Sargeant_Schultze_On_The_Budget.html
I agree with Walter this financial mess started a couple of years ago and city council knew it was coming and sat and did nothing. Even Bitter Bernie has been making the rounds in the city telling people “the city didn’t act”. Parks also has said council was afraid to layoff employees because of the backlash and as we know how many are running???? Hellooooo he’s Chair of Budget & Finance and his committee approved tons of money motions for stupid crap like studies costing over $200,000. One has to ask if the city is in such dire crisis why in the hell is the Mayor continuing to hire more people on his staff. I was told the Mayor has hired more people since Jan of this year. We need to do a public document file to see how many people the Mayor has hired. Phil, LA Times did a good piece on Sunday but it doesn’t list the new staffers in 2010?
WTF???? Los Angeles Mayor Antonio Villaraigosa called Tuesday for all city agencies — except for police, other public safety and revenue-generating departments — to close for two days a week starting April 12 because of the city’s continuing budget crisis.
“We have to act, and we have to act quickly,” Villaraigosa said at a press conference.
Dip shit should have down more a long time ago. I hope this means his DEPUTY MAYORS all get to stay home as well on these two days and not get paid.
Why are there no layoffs. Most departments are bloated with little output.
Staff of these agencies will take a pay cut of 40% as I calculate it… and the city council won’t give up one cent of their comp… or release the balance of their special funds?
To quote George W Bush:
“This is a five-spiral crash, boys.”
From LAist:
Panel Charged with Overseeing City Investments Hasn’t Met for 2 Years
As the city of Los Angeles comes close to running out of money, City Controller Wendy Greuel today released her annual report on all city funds in the City Treasury through June 30th of 2009. Basically, everything was in compliance with state codes. However, Greuel did point out some “troubling” findings. The Treasurer’s Investment Advisory Committee (IAC), which is supposed to provide oversight as to how the City’s funds are invested, hasn’t met in more than two years. Greuel also says there is a potential for a conflict of interest because the City Treasurer recommended not necessarily including key city budget officials on the panel. “We must guarantee that there is total transparency when it comes to the investment of the City’s funds,” she said.
LAURA CHICK!!!!!!! SHE left this city in a financial mess as well. She didn’t collect the over $100 million in over due business taxes nor did she collect the millions in parking fee structures. Watching city council today was like Barnum and Bailey circus with everyone pointing fingers and that old timer David Freeman sitting through it all and now lying saying DWP never intended on transferring the money because now they are in a deficit. That’s bullshit. They are the largest dept. in the city with billions.
OMG, the City is dying. Closing for two days a week! Hard to believe. For how long are we going to take it from this Mayor? He just placed the City in the ICU.
Can the city council simply cut 72 million from the DWP budget and let the DWP figure out how to deal with their own self inflicted wound?
As usual, the real issue gets sidetracked, done on purpose by the politicians to raise the public’s ire against a target other than themselves. What is 73 million in the overall budget. If transferred will the budget be made whole and the city resolve its finances? DWP moneys should be spent on infrastructure and those bursting pipes rather than supporting an unsustainable workforce, including DWP personnel. We are all tired of these political games and demand that the Mayor and Council resolve the real issues- actions to avert bankruptcy. All we have heard are excuses. The layoffs must start now. Start with the Mayor and Council staff that are under no union constraints.
As a council member stated its their own fault because they relied on that transfer money instead of being more responsible or words to that effect. City council went crazy spending millions on bullshit and now look at where we are today? If city council want people to take them seriously then I agree they need to start with their own offices. Start laying off field staffers, take away their city vehicles and blackberries, and make them stay home like the rest of the city depts. This will be a true testament to whether council is serious or will continue to be irresponsible. The illegal immigrants want to march on May 1st. I say HELL NO. This will cost the city thousands in permits to shut down a mile long streets, LA DOT, cops, fire dept. The Mayor better tell these fools NO. Last year they marched 8 times on our dime.
The real problem began with former Mayor Richard Riordan. While many praise him for being a “citizen Mayor” he was in fact one of the worst Mayors every. It was Riordan and his money that created term limits and charter “reform.” Both have shown their ugly faces these past few months. Putting all the potitical power in the hands of the Mayor who is in turn controlled wholly by his union cronies is coming home to bit everyone on the you know what. While not perfect, we had a better system of government when our council members were there for the long run and not looking to their next office. We had power spread among the 15 council members and the Mayor with none of them having the type of control our current Mayor has. This mess is Dick’s revenge….
The real problem began with former Mayor Richard Riordan. While many praise him for being a “citizen Mayor” he was in fact one of the worst Mayors ever. He knew little about goverment and less about the structure of Los Angeles. His missed opportunities at the port and airport will take decades to recover from.
But worse, it was Riordan and his money that paid for elections to enact term limits and charter “reform.”
Putting all the potitical power in the hands of the Mayor who is in turn controlled wholly by his union cronies is coming home to bit everyone on the you know what. While not perfect, we had a better system of government when our council members were there for the long run and not looking to their next office. We had power spread among the 15 council members and the Mayor with none of them having the type of control our current Mayor has. This mess is Dick’s revenge..And Antonio’s failed legacy.
And they named the Central library after him. I agree that these rich/corporate raiders they bring to government create a bigger mess than they find. That has not stopped Antonio from bringing in that clueless job czar who wants government to be like that shoe store zappos or whatever.
5:53/5:55 PM-I agree on some parts of the Charter Reform, but I’m curious why you think term limits are bad. Are you saying you’d like Tony to be in office for a third term?
6:53, I’m not 5:53 but I’ll tell you my thoughts.
Riordan’s biggest mistake was the charter reform that gave the mayor the power to fire GM’s without the council’s consent. This effectively turned the GM position in all city departments into a puppet position.
Every DWP GM that has failed to push or disagreed with the mayor’s agenda has been forced out or fired, starting with Freeman under Riordan. Add to this the fact the 5 member commission is also appointed by the mayor, you now have the 6 most powerful guys in the DWP with no power to do anything except push the mayor’s agenda. This makes Raman Raj the smartest guy there because he would rather remain COO than become GM. Besides him, the only guy with any power who can openly disagree with the mayor is D’Arcy.
Can the city council simply cut 72 million from the DWP budget and let the DWP figure out how to deal with their own self inflicted wound?
You’re acting like the council owns that money. It doesn’t. It’s basically part of a double tax: an “annual gift” the DWP gives to a city government that has been too stupid to figure out how to control it’s spending. The mayor, the commission, and Freeman/Raj know the council needs that money so they’re using the transfer as leverage order to get their rate hikes.
The mayor just escalated this little war by ordering ridiculous furloughs and has now framed the situation as something the council can easily fix by passing the rate hike. It’s a bluff. Both sides playing chicken.
I’ll also add, despite the praise the council has gotten on this blog, supposedly for standing up for the ratepayers, they have not done anything except say no and delay. They have not offered any alternatives. They have not done any work policy-wise to solve the situation. The original rate hikes (2 cents/KWH) were proposed over a year ago. The council said no and requesting a consulting assessment. PA consulting came in and found that a rate hike was needed and also found it should be higher (2.7 cents/KWH). During that period, the State also included municipal utilities in their RPS under penalty of fines that would have exceeded any rate hike proposed so far (5 cents/KWH). The council refused again. The mayor then proposed the hike should be a graduated rate hike. The council refused again.
No alternatives, nothing. All they did for the past year was delay the issue for a year by paying for an independent consultant whose findings they later ignored. Now instead of trying to fix this, all they’re doing is complaining about not getting money they shouldn’t be getting anyway.
Now more than ever, let’s let the San Fernando Valley secede! L.A.’s main problem is that it’s too big to pay attention to the needs of its many diverse communities and it has city halls in each community plus a second massive city hall downtown. That’s unnecesary duplication of services and all it does is let the big developers and billboard companies and cable TV monopolies run this town.
It seems like no matter how the Charter goes, the problem lies in campaign financing. Rearranging the existing power structure (old vs new Charter) is akin to rearranging the chairs on the Titanic.
I think city employees should call the mayor on his bluff by showing up to work and walking out at the same time. This would be effective if LAPD, LAFD, PUBLIC WORKS, CITY CLERK, CITY ATTORNEY’S OFFICE, LIBRARIES, DOT, REC & PARKS, ETC.
Let’s give this bad asp mayor what he wants and walk off on a day of our choice, at the same time. Let his jack asp pick up trash, service vehicles, arrest criminals, turn off the fires, fix the pothole, etc. He needs to walk the walk or just walk off the job and let us do our job.
He is the worst mayor in city history. Recall the mayor for playing too many games and rehaul city hall!
Oh and sell DWP and get rid of the disparity and Brian D’Farcy, IBEW
Recall the Mayor? Who would be the replacement? You have many councilmembers already planning on a run when this term runs out. A recall would just make these CMs begin a campaign sooner, neglect business, and deprive outsiders from this tea party from gearing up to put a proper campaign.
It would eat up money for campaigns that would be best handled at the end of the term. Tony is the worst mayor yet, but can you imagine the situations Garcetti would head us to? The little glimmers of their assorted ventures into leadership for the public still are inconsistent. Each CM has some history contrary to the public’s best interests and taking a stand now against rate hikes was only based on the AMOUNT of the hikes. Garcetti just about guaranteed a hike as Council proposed IF they get the $173 million transferred.
The idea of having a mayor with some authority was probably with the expectation that there woule be a responsible and competent person in that office. Tony showed what happens without possessing those qualities. Maybe he or any candidate for mayor should have been screened like the LAPD does, but how do you really address the situation to keep the city from being hijacked? And let’s not forget the council members who only now are trying cut some of the puppet strings. They enabled, sanctioned and voted approval of the mayor’s decisions uniformly.
I still suspect some of this as being staged and a stunt to get to the ultimate goals of Tony while making the council appear to be looking out for the public. It will not last.
Do the LA city council members really think the people of the city of Los Angeles are that stupid. In the midst of the so called city financial crisis, they voted themselves a 30% pay increase. This amounts to $50,000 or more per council member, not to mention all the other perks they get already. One third or even half of 73 million dollars would not be enough to keep all the city tax based departments afloat, but it would be just enough to insure the raise for all the council members. Oh and let’s not forget all the cost of living cuts city union employees took before all of this. Thanks alot city council members for working so diligently to run our great city into the ground.
The city council members and the mayor of the city of Los Angeles are liars and thieves robbing the citizens blind It needs to stop, they need to be held accountable. The city would be better served if their positions were changed to parttime and their salaries cut 50%. Also cut the number of council members 50%,since they cant mannage the city assets properly, the citizens will get by just fine with less politicians stealing from them. Then citizens should move on to the state,and federal levels of elected goverment, and do like wise.