EDITOR’S NOTE: After a long and tortured debate, the City Council voted 9-3 (Garcetti, Alarcon and Reyes opposed) to let the CRA die without the city becoming the successor agency burdened with its huge administrative costs and liabilities.
“O death where is thy
sting, O grave where is thy victory.” – 1Corinthians 15:55
There is a certain
sadistic pleasure in watching the contortions that LA city officials are going
through during these last days of the Community Redevelopment Agency.
The anger over abuses carried out under eminent domain
has given way to the pleasure of seeing the CRA’s imminent demise.
No longer will they be able to take endless millions of
taxpayer dollars intended to remove blight and help the poor and use the money instead
to build a garage for a billionaire’s personal art museum or an office building
for a profiteer in runaway film production or subsidize luxury hotels and
The City Council has until Friday to decide whether it
will take on the unbelievable costs of staff and the enormous risks of massive
lawsuits that are likely with the dissolution of what amounted to the greatest
slush fund for redistributing the city’s wealth from taxpayers to wealthy
corporations and individuals.
A report Tuesday from the City Administrative Officer and
Chief Legislative Analyst left no doubt that it would be indefensible to
perpetuate the CRA fraud on the public any longer in no small part because of
the spectacular gravy train that the CRA’s 192 employees have been riding for
pension and benefits are significantly better than those currently provided to
most City employees (average City salary: $72,000; average CRA/LA salary:
$109,524),” the report says.
Say what? Average city salaries of $72,000? And the CRA
is even 50 percent higher?
It doesn’t stop there.
“Unlike City employees, CRA/LA employees pay Social
Security taxes (6%) and the CRA/LA pays the employer share (7.25%) In addition, CRA/LA employees are provided a CAL
PERS pension. The current MOU’s provide that CRAIlA pays the employer share of the CAL
PERS pension (15.89%) and also picks
up the employee’s share (7%). In total, CRA/LA is funding employee related
retirement only costs at almost 30 percent. For comparison, LACERS
funding is at 27 percent, but that also includes retiree health which is not included in the CRA/LA 30 percent…
“In addition, CRA/LA MOU‘s provides retiree health benefits that are funded on a
pay-as-you-go basis and provide for different vesting schedules and higher maximum dollar contributions than those provided to current City employees. CRA/LA employees do not contribute any
monies to pay for the costs of retiree health. Given the escalation of health care costs, should the
City become the successor agency. it will inherit a substantial unfunded liability.”
The outrageous deals given to CRA employees parallelling those given to developers ought to have been evidence enough to justify killing the agency with its total disregard for the public’s money — money that was taken from the schools, from the police, from paving streets and sidewalks.
The bottom line is that the city would face $j109 million in new costs when it already is running a deficit of at least $72 million and a shortfall for next year of over $200 million.
“The funding that the state allows doesn’t come close to what the costs
are,” CAO Miguel Santana said Tuesday. “We can’t afford it.”
The mayor agreed and the Council, taking up the issue today, will certainly go along and refuse to become the successor agency to the CRA and put the city at further financial risk although some like Jan Perry, the queen of CRA largess to friendly developers, has qualms.
is in chaos right now,” said Perry, who wants to be mayor.
“We’re getting calls from developers every day, saying what’s going to
happen to my project? We need to answer them and quickly.”
Going forward what really matters is the fact that economic development in the future will have to be done in the daylight out of the general fund instead of hidden in the darkness of CRA operations and the tax increments it kept to spend so freely. It will be much harder to take taxpayer money and give to the wealthy in the future with making a compelling case for substantial benefits to the public.
The politicians fought the CRA abolition and still hope to revive in some form because there was no accountability for the deals they cut with contributors and friends.