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Archive for March, 2010

A good article from the LA Weekly covering how LA dug itself into a hole.

One of the points was of particular interest to me.  The city has had four Chief Administrative Officers in five years.  This is an important position, perhaps the only position in the city that runs the numbers and prepares financial forecasts.  Pushing CAOs through a revolving door is no way to build consistency or familiarity.  Unfortunately, it appears that this position has become a parking place for political pals.

The latest to exit (if just for a temporary absence), Miguel Santana, was not a heavyweight in finance.  His interim replacement is former acting CAO Ray Ciranna.  Mr. Ciranna has been frank in some of his communication with the City Council.

Daily News editorial was highly critical of the lack of progress in closing the city’s budget gap and called the Mayor’s Carbon Surcharge proposal a money grab to fill the general fund – in other words, a tax.

There are only three months left in the fiscal year and little has been done to close the budget gap for this year, much less next.  The proposed layoffs are bogged down by the arcane bumping based on employee seniority.  There is no talk of asking the unions to contribute more to their pension plans. 

In other words, no sustainable plan has been suggested.

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This article includes some eyewitness observations of Aaron Corp’s performance in spring practice.

It also contains some interesting insight on the role of football in any school’s general admissions.  While a successful season or program might increase the number of applicants, the quality of the applicant pool does not improve.  It seems logical to me.

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While anticipated, this is still disturbing.  The City Council passed a compromise rate increase motion.  How the Council and the Mayor allowed lucrative raises to the IBEW and now slapped the ratepayers with the first of what might be several rate increases is unconscionable.

As I noted in an earlier post, the DA needs to investigate the DWP for possible gross or criminal negligence, possibly fraud.  Were the Mayor and Freeman withholding adverse financial information when they recommended the labor package last December?  How much did Nahai know before he was forced out?

The City Council and the citizens have been played like a violin.  What will it take to get us angry?

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The Richmond Spiders will play its annual intra-squad scrimmage on April 10th at UR’s new on-campus stadium.

Former USC Trojan quarterback Aaron Corp will get an opportunity to show his stuff.

According to observers, Corp has been throwing the ball well – quick release and nice tight spirals.  Although the offensive line carries less experience into this season than last year’s group did in 2009, the pass protection and blocking should still be good.  The returning receivers are excellent.

Corp’s strategy of switching from a BCS to a FCS program may have been based on Joe Flacco’s success.  Flacco played at Pittsburgh but transferred to Delaware where he became a star.  He was drafted by the Ravens and has become one of the top NFL quarterbacks.

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A very brief appearance in this clip.  Watch for my name – about 50+ seconds into the video.

It concerned subway security in the wake of the Moscow bombings.

http://www.washingtonpost.com/wp-dyn/content/video/2010/03/29/VI2010032902541.html?sid=ST2010032900773

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I have heard a number of people grumble “recall the Mayor.”

Purportedly, there is a recall petition in the works, but it lacks leadership and organization.  The likelihood of securing the 250,000 plus signatures comes down to two chances – slim and none.

Just as well because there are much better objectives for local activists.  Try targeting a couple of City Council seats in next year’s municipal election instead.  That’s where most of the power resides.

Villariagosa is a weak Mayor who can no longer count on the City Council for support.  Besides, even if he could be driven from office, who will replace him?  Garcetti is next in line unless there is a special election.  Midshipman Garcetti has been instrumental in grounding the good ship Los Angeles on a reef.  Do we really need more of his leadership?

A special election would take months to organize and dollars the city does not have.  What crop of candidates would step forward to fill what might be only two years left in a term, especially when it appears the city has already passed the point of no return on the road to failure?  Who wants to be captain of the Titanic?  It will make sense for a credible candidate to run in 2013, after the city has sunk beneath the waves.  Running the salvage operation will be both challenging and rewarding.

I also have a cynical reason for not wanting to recall the Mayor.  When the city either slips into bankruptcy or becomes a provider of phantom services because of gutting its core operations, I want Villaraigosa to be in at the end.  I want people to remember him as the Mayor that crushed Los Angeles as ably as Godzilla flattened Tokyo. The only job he should qualify for after 2013 is Al Gore’s towel boy. Al likes the Mayor’s “stick-it-to-the ratepayer” plan so much, he would probably allow Antonio to sleep in the cabana by his heated pool.

You don’t want an incompetent loser to escape the consequences of utter failure.  It would be as if the Indians allowed the 7th Cavalry to replace General Custer  before the Battle of the Little Big Horn ended.  Custer was the golden boy of his age and some claimed he had Presidential aspirations.  He was also reckless, vain and foolhardy. He will always be remembered for his failure that cost the lives of the 200 troopers who rode with him. He would have been scarcely remembered at all had the event gone down in history as Major Reno’s Last Stand.

So let’s allow Antonio to die with his boots on and go down in our city’s history as a testament to failure.

In the meantime, let us start planning the revival of a great city.

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The DWP’s Chief Opearting Officer sent a politely worded memo to the Energy and Environment committee of the City Council today.

As polite as it was, in no uncertain terms, he stated that the credit rating of the DWP would be adversely affected if the proposed rate increases were not approved. He added: “…it (DWP) will not be in a financial position to recommend that…they (the DWP Board) make a further surplus distribution.”

That’s $73.5 million the General Fund will not receive.

You can read the memo and attachments here.

https://phinvv.files.wordpress.com/2010/03/mayors-rate-memo1.pdf

In my view, this is the straw that will break the back of the city’s reserve fund.  It might even be the tipping point in the direction of bankruptcy. 

I know that will come as no surprise to anyone who has followed the fiscal slide of the city.

What is more disturbing  is how the case presented by the Mayor and DWP Board for the increase has morphed from a green energy campaign to the financial health of the DWP and the financial survival of the city.

Financial reporting should not be a mystery novel with twists and turns in the plot that keep the readers turning the pages.  That’s fine for works of fiction;  however, it is fraud when it comes to public disclosure of financial condition.

There is enough information to conclude the management of the utility and the Mayor must have been aware of the fragile nature of the credit rating long before the proposed rate increases were on the table.  If they deliberately hid or suppressed this information from the E&E Committee, it amounts to at least negligence – perhaps even criminal negligence – or fraud.

It is time for the County District Attorney to step in – I assume this matter would not fall under the authority of the City Attorney.

We deserve answers ……..and justice.

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