The Los Angeles County civil grand jury got a well-deserved thrashing last week from local officials for its dumbfounding end-of-the-year report on the financial health of the county’s 88 cities — a report that made Glendale, Burbank and Pasadena seem more like bankrupt Stockton and San Bernardino than the prosperous suburbs they are.
It wasn’t the first shot the 23 civic-minded citizens who volunteered for the job took at Glendale.
You might remember that just before Glendale’s election last April, the grand jury dropped a bombshell report that called into question the legality of the city’s transfer of $21 million in “surplus” electricity revenue to the General Fund and cast doubt on the competence of city officials in putting a Charter amendment on the ballot that didn’t clear up the issue by replacing the transfer with a straight-out tax.
It was an unprecedented interference into a local election by the grand jury and it had an impact, helping to defeat the ballot measure.
“If anyone in the city had done that, they would probably be prosecuted,” Glendale Councilman Ara Najarian said at last Tuesday’s City Council meeting, where an official repudiation was made of the grand jury’s year-end report on the most critical local issue of our time, the financial health of the cities.
“The (year-end) report tells a story and that story is failure of a process,” he said.
It’s clear a lot of time and money was spent gathering data, but the astonishing conclusions reached obscured the value of the statistics.
On the upside, you can see for yourself why cities have problems in the fact that there are 772 fat cats on city payrolls making more than $200,000 — two-thirds of them working for fire departments or municipal utilities.
More than half — 411 — are on the payroll of Los Angeles. Locally, Glendale has 15 and Pasadena has eight, while Burbank has 14, although it isn’t in the same league with Beverly Hills, a third its size, 1/100th the size of L.A., with 64 fat cats.
Where the report goes astray is in leaping to conclusions solely on the basis of comparing raw financial data without a deeper understanding of the details — or explaining why cities with the best financial practices often are ranked lower than those with the worst practices.
For instance, how come South Pasadena jumped from 82nd to 32nd place for financial health while ranking 55th for following best financial practices? Or how come Cudahy, ranked worst in the county for financial best practices, was given an average fiscal-health ranking as fiscally healthier than Glendale (57), Burbank (57) or Pasadena (45), soaring 21 places to 34th place?
Maybe corruption is good for a city’s financial health; federal investigators have exposed “a long list of people” involved in bribery and extortion in Cudahy.
Najarian offered an explanation for what was wrong that called into question the entire civil grand jury system.
“The process is collecting volunteers from the community, lay volunteers, volunteers who know nothing about finance or municipal government or municipal finance in general, to pass judgment on our city and other cities,” he said. “Now these jurors, many of them retired from all walks of life, have no requirement for any experience or training or education in these fields and they are led along … very much led by County Counsel, who may or may not have an agenda.”
At that point, Najarian reached for the Fitch Ratings report released on Monday. It affirmed Glendale’s “AA+” credit rating, much as Standard & Poor’s had previously affirmed both Glendale and Burbank’s “AAA” rating, the highest.
“Sound reserve levels, good liquidity, satisfactory financial performance and prudent financial policies and budgeting practices,” Fitch said.
“Glendale is a safe-and-sound city with excellent financial practices,” Najarian added. “To me, we can take that grand jury report and build a bonfire with it to keep us warm in the upcoming winter months.”
Added City Manager Scott Ochoa, “This is a very simple case of garbage in, garbage out … in my professional opinion.”
Ochoa pointed out that the Tri-Cities, each with its own utility system, got dinged for transferring “surplus” electricity revenue to their general funds and got further punished for their past reliance on the now-defunct community redevelopment funding mechanism that left them dangling in the wind over when, and how much, of redevelopment loan repayments will be approved by the state.
The County Counsel offered no explanation for how this kind of meaningless nonsense could be disseminated as if it had significance, citing attorney-client privilege protecting disclosure of what legal advice was given and noting the grand jury does what it wants.
It is time to take a hard look at whether the civil grand jury itself is a relic of the past and no longer relevant.
The 23 grand jurors included 21 retired people; 16 men, seven women; four blacks, two Latinos, 16 whites and one person who was classified as “other.” Not very representative of L.A. County, to be sure. But what can you expect when 320 of the 396 original candidates were retired, with only 10 under age 35, and men far outnumbering women?
Back in March and the effort to scuttle the Glendale election, grand jury Foreman Frederick Piltz warned that passage of a Charter amendment clarifying the language allowing the revenue transfer “might” lead someday to violations of Propositions 26 and 218, so the “maximum utility of this investigation would best be served by publishing this investigation at this time.”
The report expressed concern the city was “erroneously interpreting” the law and then misstated the upshot of a legal case that the Howard Jarvis Taxpayer Assn. won to block transfer of water revenue as a violation of the state Constitution — a protection that did not apply to electricity.
This is all very discouraging to someone like me who believes in government of, for and by the people, and who thinks the answer to the selling out of the public interest at all levels by professional politicians is devolution of power closer to the people.
Certainly, something has to change, or nothing the new grand jury does will be taken any more seriously than the actions of the last one.