Jack Humphreville sent the following email blast out today to the five members of the City Council’s Budget and Finance who are meeting behind closed doors this afternoon at 2 PM to discuss the sale of the city parking facilities. He urges them to open the meeting and kill the deal and then follow up with public hearings on this and broader budget issues. If you want to join him in this plea, cut and paste their email addresses and the text and send it to them with your own message.
Bernard Parks <firstname.lastname@example.org>, Greig Smith <email@example.com>, Bill Rosendhal <firstname.lastname@example.org>, Paul Koretz <Paul.Koretz@lacity.org>, Jose Huizar <email@example.com>
Council Members Parks, Smith, Rosendahl, Koretz, and Huizar
Today, the Budget and Finance Committee is once again considering the sale or privatization of our parking facilities, but once again, behind closed doors.
This transaction lacks transparency. We have not been even been provided basic information by the CAO.
There is no information about the adverse impact of higher rates on the local community and employment.
Nor has the City had the common decency to reach out to the impacted communities.
It is poor fiscal policy to use the proceeds from the sale of revenue producing capital assets to pay every day operating expenses.
And billions (like $3.5 billion) will be sucked out of our economy because the city has not considered other viable alternatives. And all for $53 million that will be flushed in 6 months.
The mayor has issued misleading values of this transaction. The CAO and Controller have released memos outlining the dire consequences of the failure to sell our parking facilities. It is just a coordinated plan to steamroll the City Council. Not dissimilar to the ECAF Fiasco.
Say NO to this boneheaded deal. It is not in the best interests of Los Angeles.
Rather, you need to have open hearings to discuss the parking facilities, their economics, and alternatives. And your committee and the City Council need to address the chronic budget deficit by making the hard decisions involving programs, services, and staffing levels.
Here’s what I added to Humphreville’s message:
I can understand your desire to meet behind closed doors to discuss this, given what an embarrassment it is to have allowed the parking lots to be so poorly run and to have created such massive financial problems for the city.
But covering up the facts about the terms of this deal and discussing all that surrounds in private is a betrayal of the fundamental principles of democratic society.
This is too important matter with far-reaching implications to be handled this way.
It is one-time revenue that solves none of the problems, the least of which is cash flow for this year’s budget when such massive deficits loom in the years ahead.
You are all capable of better.
Here are some others emails to the Budget and Finance Committee:
Committee Members Parks, Smith, Rosendahl, Koretz, and Huizar:
I would respectfully urge all Councilmembers to reconsider any long-term/lease (which is an equivalent of a sale) of City-Owned assets, especially when the discussion is not transparent:
1. An honest/ethical government starts with openness and transparency. Any decision should be fully vetted and any elected official who votes in favor of a decision should be open to public review/scrutiny.
2. Follow prudent financial practices: Don’t use long-terms assets to solve short-term budget problems especially when the present value of such a sell will only address a 6-month period of budget deficit.
3. Look at past practices and use “lessons learned” from other big Cities such as Chicago. In addition to not really getting any “bang for the buck” vis-a-vis tax payers in this current proposal, a private operator would likely up the parking rates and hurt small businesses which are teetering on their very survival in this tough economy: http://www.associatedcontent.com/article/1866529/chicago_residents_outraged_over_mayors.html
Committee Members Parks, Smith, Rosendahl, Koretz, and Huizar:
I agree with Jack Humphreville. . . . Mr. Parks, just like with the full disclosure of the DWP prospectus, the public needs to know the details behind this transaction. You were with me on the idea of the DWP publishing its bond propsectus’ on the website. Please be with me on this. Presumably, this parking lot transaction will be syndicated. . . Presumably, there will be a prospectus. Please let the public in. . . on the front end. I would ask as well that the committee also please vote to waive the attorney-client privilege and let the details of this parking lot deal see the light of day. . . .
Other alternatives will present themselves. . . . .
This deal is horrible on so many levels. . . . Wall Street should not be let in the door to rape and pillage the City of Los Angeles. . . this is ‘crony-corporate-crisis capitalism’ at its bare bones worst. . . . and that’s apart from the appalling economics of this deal (to the extent we know it).
If this parking lot deal was being evaluated on its ‘business merits’, and the bond rating agencies were ‘rating’ it, can it be honestly and truly said that it would be viewed as enhancing the bond rating of the City? We are covering short-term expenses with long term debt obligations. . . This is bad business. . . only unlike Wall Street, the City does not have the Federal Government (be it Congress or the Fed) to bail it out. Help us either confirm whether this assumption is, in fact, correct.
To mortgage the future of our kids this way is poor public policy. . . .regardless.
Please let the public into this debate by giving us access to the details we need to make a constructive, competent contribution. As voters and as beneficiaries of this public trust known as the City of Los Angeles, we need this information in order to fully understand and appreciate the merits and demerits of this proposed transaction.
The idea that Wall Street ‘rapes us’ going in, and then in future years ends up lowering our bond rating anyway (citing this very transaction as evidence of the City’s poor administrative or ‘business’ practices), thereby ‘raping’ us again on the backside is not a pleasing vision. As public trustees of this public trust, please consider us as ‘beneficiaries’ of that trust who are your ‘partners’ rather than your adversaries. The City is not a ‘business’. . . and apart from the details of this deal, it sets a very poor precedent for the City to engage in transactions such as this Parking Lot deal.
Lastly, please consider directing the City Attorney to cease his conflicting representation of the Council and the City (the debtor), the GAO and Rec & Parks (Pershing Square) (the ‘owner’ of the property and grantors of the ‘business opportunity’ (whose value is. . . what?. . . do we have an appraisal of both the real estate and the ‘business opportunity’ which is the parking lot operations?), and the Pension Plans (the creditors). If this was your own business (or your own circumstance), would you allow your lawyer to represent both debtor and creditor? I would hope not. . . . This is so incredibly poor on so many levels. . . . It should not be done, and certainly not in the absence of full and open disclosure. The City Attorney needs to render a legal opinion on the legal efficacy of this transaction. How can he do so when burdened as he is with the conflicts of interest that inhabit this transaction. The City needs separate and independent counsel on this matter. . . Please consider hiring independent counsel and directing the Pension Plans, the GAO, and Rec and Parks (the owner of the Pershing Square lot) to do the same.
Please keep in mind also that your committee has subpoena power under Section 217 of the Charter. I ask you all to please make use of that power to bring in other experts who can publicly opine on the economic, legal, and practical bona-fides of this transaction. . . while at the same time offering alternatives. The reason I suggest the use of subpoena power is because it is possible that the Wall Street ‘cronies’ will not voluntarily cooperate with the public’s need to know and might, therefore, need the ‘cover’ of a subpoena to provide you and to provide us with critically important information needed to objectively and competently evaluate this deal. If there’s one thing we should have learned from the last Wall Street crisis is that the incentives on Wall Street are perverse. . . and what’s good for Wall Street is most definitely not good for the people of Los Angeles or the people of the United States.
Please do not do this deal. . . . Please give the public a seat at the table. . . . please get independent legal counsel. . . . . please waive the attorney-client privilege. . . and please use the committee’s subpoena power to get at relevant documents and details that are currently being hidden from the public.
Thank you for your consideration of these ideas. . . . The specter of the billboard deal (done in secret to everyone’s regret with the benefit of hindsight) hangs over this situation. If there ever was a need for openness and transparency, it is here and it is now. . . on this parking lot transaction.