The Los Angeles City Council’s plan to resolve its dispute over auditing the controversial non-profit trusts gives away the most important element of accountability – independence.

The foundation of good government and good management is a system of checks and balances.

Among other things, the Council’s proposed settlement, which stills needs to be reviewed by IBEW Local 18 (God knows what modifications they will suggest), will force Mayor Garcetti to withdraw his appointments to the boards of the Joint Institutes of Training and Safety and allow the union to have a say in the selection of external auditors to perform future audits.

The mayor’s board appointees are Michael Fleming, who serves on the DWP Commission, and Richard Llewellyn, the mayor’s chief legal adviser. The IBEW has refused to seat them; as a result, the trust boards have not held a meeting since Garcetti announced the appointments last February.

Union boss Brian D’Arcy claims the two would have a conflict of interest owing to their relationship with the mayor – as if the union board appointees are independent?

Los Angeles Superior Court Judge Michael Linfield backed Garcetti in a court ruling in July. He denied the union’s request for arbitration and issued a preliminary injunction allowing Fleming and Llewellyn to be seated. Basically, the mayor and his allies’ interests were compatible with the responsibilities of the non-profit boards.

Now the City Council appears to be willing to give D’Arcy veto power over board appointments. That does not foster independence and transparency.

But wait! D’Arcy will allow the new General Manager of the DWP and another executive of the utility to serve instead.

Well, that’s been a winning combination over the last ten years.

A succession of DWP managers have sat on the boards since the trusts were created.

How much disclosure was provided in that time span?

Virtually zero.

DWP managers are too involved in ongoing affairs with the IBEW to be truly independent. They have to look at D’Arcy’s mug regularly and endure his power-hungry ambitions. They will simply be worn down and cowed into acquiescing with the Boss.

Allowing the union to have a say in the selection of an external auditor also runs counter to independence and transparency. It will mean D’Arcy will influence the scope of the examinations. Unlike publicly traded corporations who must undergo rigorous audits, more so in the post-Enron era, in the case of the DWP non profits the objectives of an external examination may be more of a review and less of an audit. It is a matter of negotiation. D’Arcy will want it to cover the bare minimum…..and he just might be able to get his way, as he does in many negotiations.

If the City Council caves and pushes this dubious plan forward, a plan that will undoubtedly be watered down in its final version, they will set up the proverbial fox guarding the hen-house scenario.

For D’Arcy, it will taste like chicken.

“What I said and stand behind is, war is hell and unfortunately civilians are victims of political conflicts.”

Those words were from the mouth of none other than commedienne Joan Rivers as she made her way through LAX the other day. She was referring to the tragedy unfolding in the Gaza Strip.

That’s right, the same Joan whose is best known for her commentary about red carpet events in Hollywood. I would scarcely pay attention to her on any subject, but she caught my attention this time.

Her words were harsh, but ring truth if you filter out the emotional elements of the subject.

“War is hell” was first spoken by General William T. Sherman, who was best known for his controversial, but effective, tactics in the American Civil War. He also said he would “make Georgia howl” before he embarked on his destructive march to the sea. He understood the concept of total war and its importance in vanquishing a dangerous enemy.

He spoke often about war. “War is hell” happens to be the most remembered of his statements. However, another is more meaningful: “War is cruelty. You can’t refine it.”

I believe we here in the United States and the industrialized world in general developed unrealistic expectations regarding the effects of war. You can partly blame that on the First Gulf War fought in 1991.

We became accustomed to smart bombs and laser-guided ordnance. The large Iraqi army was dispatched quickly, with very light casualties incurred by the Allies.

Events moved rapidly for a conflict of that scale – ground operations lasted only 100 days. The world was so mesmerized by the effectiveness of the General Schwarzkoph’s strategy that there was little time to dwell on the pain suffered by the civilian population of the region.

No official tally of civilian losses was ever released. To my knowledge, there was no serious tabulation attempted. One estimate claims about 13,000 civilian deaths as a direct result of Allied attacks, mostly attributed to the bombing of select facilities in Baghdad and other cities.

By contrast, about 40,000 Iraqi soldiers lost their lives.

The ratio of military to civilian casualties reflected the nature of the combat. Most of it was over open terrain and away from population centers.

The Gaza Strip, on the other hand, provides a completely different backdrop. It is a conflict where Sherman’s definition particularly holds true – it is cruel and cannot be refined. It has also been going on for decades at varying levels of violence

The high ratio of civilian deaths to combatants in Gaza is a direct result of population density and the determination of Hamas to fight in close proximity to nonmilitary facilities. It is a situation that, to some extent, cannot be avoided. It is similar to what has occurred in countless wars. For example, some 50,000 French civilians perished in the combat activities leading up to and through the Allied invasion of Normandy in World War 2. Undoubtedly, a significant share of the casualties was attributable to Allied bombing and shelling.

Few faulted the Allies from doing what had to be done to eliminate the cancer of Nazism, as painful as it was to innocent civilians.

Hamas is a cancer, too….a cancer that wants to spread beyond its present infestation.

Hamas cannot be ignored, especially by Israel who has endured many thousands of rocket attacks. These attacks would have been more deadly had it not been for Israel’s sophisticated Iron Dome missile defense system and the technologically primitive design of the incoming rockets.

It is a costly way to fight a determined enemy hellbent on delivering unending salvos of rockets that are intended to terrorize and kill Jews. President Obama just recently authorized $225 million to bolster and replenish the Iron Dome.

Israel manages the system to minimize the costs. According to an analysis published by the Christian Science Monitor, “Iron Dome doesn’t target all rockets fired towards Israel. Since each interceptor costs around $60,000 and many of the crude rockets fired by Hamas and others from Gaza cost as little as $1,000, that would be a quick way to go bankrupt. Instead, radar picks up the trajectory of rockets, and only fires at ones headed for population centers.”

Still, the economics of dealing with Hamas terrorists is high. Think of the financial aid that could go to develop the Gaza Strip were it not for the relentless attacks on Israel perpetuated by a terrorist regime, one that was popularly elected by the Palestinians themselves.

If Israel were deliberately targeting civilians, the death count among the general population would be many times higher. Every shell fired or bomb dropped would kill many dozens of civilians.

If Israel does nothing but target incoming rockets, it will resign itself to endure decades of terrorism. A lifting of the embargo against Gaza will guarantee an unimpeded inflow of rockets and even deadlier arms from countries and factions whose goal is to wipe Israel off the map.

I am afraid the only solution to this ongoing crisis is to make the Palestinians howl, as Sherman would have put it; howl loudly enough to throw Hamas out and install a sensible government willing to work with Israel and the West to develop the nation’s resources.

I visited the local hardware store on Saturday to purchase a roll of duct tape.

“Sorry,” the clerk said.

“That stuff just flew off the shelf on Friday.”

Undeterred, I shlepped to Home Depot.

The shelve space for the product was empty.

I managed to flag down an employee (they were about as hard to find as missing duct tape).

He, too, expressed dismay and referred me to the manager.

The manager at least offered a clue: “One customer cleaned us out on Friday. Don’t bother checking the other stores. Same thing happened.”

The manager excused himself before I could ask who the customer was.

By chance, the dots started to connect. A reader of my blog on the Westside called to report unusual truck traffic on Sunset Boulevard.

I didn’t think anything of it because of the repair work to the ruptured water main, but then a light bulb went on. OK, a dim light bulb.

I staked out a discrete location on Sunset just east of the repair crews. What I saw made my jaw drop.

Dozens of trucks from Home Depot, Do-It Center, Lowes and other stores were arriving at a rate of one every five minutes.

My eyes spotted a DWP worker sitting on the side of the road eating lunch. I asked him what all the hardware store deliveries were about.

He ignored me, at least until I pulled a Ben Franklin from my wallet.

“Duct tape,” he replied. “If you want more information, it will cost you.”

Given that my Starbucks money for the month was now gone, I pursued another line.

I called on a friend who is a brilliant chemist. He gave me permission to use his name – Walter White.

Walter did some quick calculations and determined that a triple layer of duct tape would resist pressure and leakage. Even more if it were applied along an extended length of pipe.

“How long would it last?”

Walter replied, “300 years, with a 99.5% certainty. Definitely blue level grade.”

Just long enough to fit the DWP’s strategic plan for water main replacement.

A coincidence?

Maybe, but given the brains running the city, it’s as good a plan as we will get.

Hit the Road

Kevin James appeared in front of a packed house at the Los Angeles Neighborhood Council Coalition. I give Kevin, with whom I am well acquainted and respect, points for facing the public soon after the release of an audit report that would have made any other Los Angeles city executive run for cover.

As he pointed out, the audit of the Bureau of Street Services (BSS) covered a period from FY 2011 through FY 2013 – before Kevin was appointed by Mayor Garcetti, a fact not highlighted in Galperin’s report. For that matter, the period fell squarely under the regime of former mayor Antonio Villaraigosa. Villaraigosa’s idea of a good Public Works Board appointment was none other than Andrea Alarcon who served from 2009 through 2012 as the board’s vice president and later president.

Kevin came prepared as a lawyer would for a court appearance. That’s good, and he is an attorney after all. We should expect the same of all officials.

City Controller Galperin’s audit report struck not only at the heart of the problems at the Bureau of Street Services, but it exposed a problem that is probably prevalent throughout the city bureaucracy.

Without competent managers and reliable data, it is impossible to run an efficient operation.

A few years back, former City Controller Wendy Greuel was gung ho about performance-based budgeting. Greuel viewed it as an end in itself; that implementing a system designed to capture metrics and using it to develop financial and operational plans was a panacea for managing the city’s deficient financial performance. It was good press release stuff, but Greuel was, in the words of Mayor Garcetti, the press release controller.

Well, rolling out performance-based budgeting in an organization insulated from modern conventions is as effective as allowing a caveman to drive a car (although I often wonder about some of the drivers on our roads).

I think we have had cavepeople at the steering wheel of BSS for way too long, Ms. Alarcon being one of them.

Nazario Sauceda, Director of BSS, an affable individual who has reached out to the Neighborhood Councils, knows about pavement, but his management skills are suspect. For example, it appears he is incapable of performing a simple make-or-buy calculation. BSS was contemplating investing $18-million to upgrade its asphalt production facility.

What was the benefit?


At best, the city might come close to matching the production cost of the outside vendors who already provide most of the material to the city today.

Sauceda could have penciled the numbers on a cocktail napkin and concluded it would not be worth the investment under any scenario, and especially so if the city could have sold or leased the land underneath the plant.

Allow me to digress, but Mayor Garcetti should take note: his back to basics agenda should rule out in-house production when reasonably priced sources are available elsewhere.

Kevin strongly disagreed with this finding. His logic was sound, but he failed to view the investment in the greater context of capital budgeting. The city has limited funds – we can go on forever why that is the case – and must ration major improvements. That means even some economically viable projects will not be approved.

Kevin made a good point about the importance of having alternate supply sources and the difficulty of obtaining permits for asphalt production facilities. But do we really want to have city employees with some of the highest fringe benefit loads in the country producing asphalt?

What about licensing the production? Perhaps wrapping it with a sale-leaseback where the proceeds would help fund the reconstruction some of the F-rated streets. Don’t forget, a reconstructed road would have a long useful life which could match the term of the sale-leaseback.

Personnel management isn’t one of Sauceda’s strong suits either. Direct salary cost as a percentage of total salaries for FY 2012-13 is not only very low – 56% compared with 70-80% other cities – but the ratio is worsening. It was over 58% in FY 2010-11. Is Sauceda’s annual bonus increasing?

Kevin challenged this finding as well. What was the basis of Galperin’s conparisons? How did the auditors determine what was direct vs. indirect?

Long Beach and Tacoma, mentioned as examples in the audit report, are not in the same league as Los Angeles, according to Kevin. True, but scales are relative.

The other point regarding delineation of costs is a far more valid issue. The operations do not line up well from city to city. Galperin should disclose how he arrived at them.

The audit also criticized BSS for unsubstantiated performance statistics. Good luck in preparing a strategic plan when you can’t rely on your core statistics. One metric that is highly questionable is for potholes. Potholes come in such a variety of shapes and sizes that BSS may as well be counting almonds, plums and oranges. In would be more meaningful and easier to report the amount of asphalt used to repair potholes rather than the quantity filled. BSS could also measure the repair expense more accurately.

One very disturbing observation made by Galperin’s staff had to do with the overall condition of LA’s streets versus other cities. Los Angeles came in at 64% in poor condition. For that matter, the three worst in the sample of 12 cities were all in California – with San Francisco and San Diego running close behind at 60% and 55%, respectively. Even more perplexing, snowbelt cities such as Chicago, New York and DC were in far better shape. I haven’t seen any snowplows on Sunset Boulevard lately, although one might come in handy about now.

I strongly agree with Kevin’s position on fees charged to utilities who must break through street surfaces to repair their infrastructure. Fees largely transfer funds from one pocket to another and the consumers/taxpayers are ultimately charged indirectly. It is a waste of resources to collect and account for them. However, the BSS budget should include an allowance for this type of work, which is a certain to occur as a water main break. BSS must be fully empowered to coordinate the work of the various utilities.

Overall, the residents owe Ron Galperin and his staff a solid vote of confidence. James should also be grateful….and I believe he is. Galperin has exposed the skeletons before they can jump out and bite the Public Works President. He can now work on solutions, although the road to change will be difficult given the degree of political meddling by the City Council.

Controller Galperin has also committed to revisiting BSS in one year.

Mayor Garcetti and Kevin James should put Sauceda on notice to make substantial improvements. Certainly, BSS, Garcetti and James should reach a consensus as to the specific goals. That’s not really process for an auditor – Galperin has no control over budgets and city operations – but he needs to be informed.

As an appointed commissioner, James will take responsibility for future performance. He is not one to duck them. Sauceda earns $199,000 per year of our tax money. It is reasonable for Kevin to hold his feet to the fire.

The most important takeaway from this audit is it represents a wake-up call to the residents. The front page coverage will increase awareness about city governance and its failure to prioritize.

Expensive to fix

The recent water main break on Sunset should remind us how costly Los Angeles is – and will be – to maintain.

The main was 93 years old. Some connections and valves might be just as old.

The repairs to the infrastructure and the surrounding properties will run well into the millions. I would not be surprised if the repair cost for Pauley Pavilion could amount to one-fourth the $136-million renovation price tag in 2012. If you factor in loss of use and revenue, the vehicles in the garages, my guess may be in the ballpark, or at least the basketball court.

It was if the Los Angeles River was restored to its natural and wild state, but right through Westwood.

Someone is going to pay, and it won’t be Brian D’Arcy and his well-compensated IBEW brethren.

Even if the city’s insurance covers most of the repairs for UCLA and Westwood, just think of what it will do to future risk premiums.

If this were a one-time event, we would suck it up and move on.

But how many such potential disasters lurk?

What if the Red Line tunnel was inundated? A parking garage in Century City? Another fire truck in Valley Village?

The liability associated with the city’s aging infrastructure is not just about the materials and labor required to replace water mains and power lines; the cost for personal property damage and possible loss of life could easily dwarf that of all other components.

If you consider the costs of repairing streets and sidewalks, upgrading public transportation and paying for the ever-growing retirement benefits of city employees, Los Angeles might become too expensive for the average resident in the not too distant future.

To be fair, Los Angeles is not the only city in the nation facing this problem, but there is little solace in that fact.

Think of it as living in the same house for many years. You go through a long period with little in the way of replacement costs, but eventually age catches up. You procrastinate on major repairs, perhaps squeezing more life out of the roof. Then a 50-year storm hits and it collapses.

Many cities are well past the low maintenance portion of their lives; Los Angeles is one of them.

How many residents will opt to move outside the city limits, if not the state, rather than bear the costs?

The Orange Line busway has been a huge success, especially when you consider the comparatively low construction costs versus what was incurred for light rail systems serving the region.

Ridership tripled to 22,000 per weekday in its first year of operation in 2005. Weekday boardings are currently at 25,873, down about 2,000 from a year ago, but still impressive.

I have ridden the Orange Line between North Hollywood and Woodland Hills on a few occasions. It was comfortable, reliable, affordable and beat driving on the 101.

But its capacity is also getting maxed out.

Despite the slight drop in ridership, the buses are crowded most of the time. Waves of riders exit at the North Hollywood station and swarm the Red Line platform for the connection to downtown. I might add that the Red Line fills up quickly during the morning rush.

Upgrading to higher passenger capacity light rail makes sense, then, but not without modifications to the right-of-way and the parking facilities serving the passengers.

At-grade crossings are the bane of any railroad. The potential for collisions between trains and vehicles is ever-present; therefore, the trains (or buses, in the case of the Orange Line) must decelerate when approaching an intersection between the tracks and a street. That’s time lost. On a system with many stops, it adds up to several minutes which can make the difference in making a more timely connection. Let’s face it, a very important consideration in deciding to use public transportation is timeliness and trip duration. That’s why regular buses will never be an attractive alternative for commuters.

How do we deal with the at-grade crossings?

Grade separation, where either the roadways or the tracks are elevated or lowered at the crossings, is expensive in congested, residential or commercial areas. An excellent example of grade separation is where the Union Pacific tracks cross Van Nuys Boulevard. The roadway dips below the railroad right-of-way. When it was designed, there was ample real estate to work with. Try doing that today at, let’s say, Laurel Canyon in Valley Village where it crosses the busway. A big chunk of Valley Village’s commercial zone would cease to exist.

It would be impractical and chaotic to cut off certain north-south streets in the Valley to facilitate train speed.

Installing automatic crossing arms would be the safest approach, but I could just hear the howls of protests.

I suggest a warning light system which would start flashing many yards before the crossings. For example, lights would be placed on streets about a half-block before the tracks. They would begin flashing in advance of a train’s approach. Of course, the regular traffic lights would still exist and function as they do today. This system would not be 100% effective – you will always find those who attempt to run lights. You cannot fix stupid, but it would be safer than it is today and allow trains to maintain speeds without adding to the risk of accidents.

To increase ridership the MTA will need to add parking at the Orange Line stations, particularly the lot that serves the junction of the Red and Orange Lines in North Hollywood. Quite frankly, I grew tired of County Supervisor Zev Yaroslavsky’s unfulfilled promises to add parking in North Hollywood, but what does he care now.

Commuters will still depend on their cars (or, for a few, bikes) to reach the stations. They are not going to spend countless minutes waiting for a Metro bus that may never arrive anywhere close to schedule.

People will also need shuttle transportation when they exit the Orange Line, at least those not transferring to the Red Line. It’s not fun to walk a mile in sweltering heat or driving rain to reach your place of business, store, etc.

A fleet of courtesy buses needs to circulate regularly and often in the vicinity of the stops to deliver riders reasonably close to their intended destinations. This is true for all of MTA’s rail lines.

This will cost money, but unless these measures are taken, it does not pay to convert the busway to light rail. The ridership will not increase substantially.

It was not unusual for the most powerful or influential Russian czars to have a moniker: Catherine the Great, Peter the Great and Ivan the Terrible, to name a few.

Following in this tradition, Russia now has Putin the Sociopath.

If there were any doubts about V. Putin’s state of mind, the destruction of Malaysia Air Flight 17 over Eastern Ukraine should quash them. It is not just his outright denial of responsibility in the face of growing intelligence that he has armed pro-Russia rebels and provided technical training, stirred the pot by keeping a large force on the border with Ukraine and failed to dial down the rhetoric about a “fascist” government in Kiev, but he blames Ukraine for the tragedy that murdered 298 men, women, children and infants.

Mario Puzo’s Michael Corleone was a novice sociopath compared to the ex-KGB hack in the Kremlin. Although he lied about giving the order to kill his own brother-in-law and viewed the murder of his rivals as “strictly business,” at least the young Godfather did not kill innocent people.

Putin effectively pulled the trigger of the surface-to-air missile by encouraging the chaos and bloodshed that heretofore was primarily directed at combat units. Even if the Russian operatives on the ground did not intend to shoot down a civilian airliner – traveling at a non threatening altitude of 33,000 feet – Putin must answer for the deaths.

What is just as repulsive are those in the United States who actually admire this butcher.

Why do they?

For many of them it is about President Obama. Since Putin made him appear weak in the Syrian chemical weapon confrontation, he instantly became a hero in the eyes of the lunatic fringe. For what it is worth, Obama shot himself in the foot with his “red line” threat. Nevertheless, Putin has become a rock star in their eyes. These Americans are blinded by rage and hate.

President Obama’s international policies have been largely embarrassing over the last two years, but he has done a decent job of dealing with the crisis in Ukraine. He has been in no position to be too aggressive with sanctions because the EU countries, who rely heavily on Russia’s natural gas, have responded timidly lest they jeopardize their energy supplies. Without firm support from our major European allies, US sanctions will have little effect.

This may change. Europe cannot ignore the gravity of this senseless act and Putin’s attempt to cover up the role he played.

Putin must pay a price. The Russian people who support him must also feel pain. They keep this brute in power. Until they wake up and end his regime, they will also have blood on their hands.


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