Archive for April, 2011

The bi-state North Lake Tahoe Regional Planning Authority (TRPA) approved the development of an upscale resort in Crystal Bay, Nevada, within walking distance of the California state line.

The project, named Boulder Bay, has been hotly debated for years.  Significant concessions were made by the developers and it appears to be on its way to fruition despite the possibility of lawsuits.

Boulder Bay


The vote was 12-2 in favor and may represent the last major decision of the controversial agency charged with controlling development in the Lake Tahoe basin.  It appears all but certain Nevada is pulling out of the compact that was formed with bi-partisan cooperation during Governor Reagan’s administration.

California and Nevada will each have its own agency to assure protection of their respective shorelines and watersheds.

The TRPA’s decision begs the question: what will be the fate of the dated Cal Neva Hotel across the road from Boulder Bay?
The Cal Neva was in its heyday when Frank Sinatra owned a fifty percent interest in the days of the Rat Pack, but it is an aging and poorly maintained relic today.  I walked around the property last year with some friends from the area and was appalled by the deterioration. 
Amazingly, the hotel experienced some spurts of activity in 2010, including a News Years Eve event that attracted 1,500 guests.
Nevertheless, it appears some group will have to invest serious cash to make a going concern of the historic casino resort.  Perhaps the older casino section can be salvaged and restored, but the high-rise hotel may not be worth saving.  It won’t come close to matching the ambiance of Boulder Bay.
Old Blue Eyes would be shedding a tear or two if he knew.

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The budding porn film careers of two Los Angeles traffic officers could launch a series worthy of pitching on a late night cable or satellite channel near you, right after the ShamWow commercial. 

If the mayor were smart, he’d sign a deal with Joe Francis for distribution rights for the recently surfaced videos of the two traffic officers combining duty with booty.

The DVD sales in Los Angeles could raise enough tax revenue to close the city’s deficit.  Villaraigosa’s “Shop LA” program could become a serious marketing strategy rather than the baseless hype it is today, and actually put those sales tax dollars to work restoring services.

As one who recently received a ticket for parking during street cleaning hours, I’d like to know how long the officers’ vehicles were parked while they issued or received a few violations of their own making.

I hoped they asked for the IDs of the performers to assure they were of age.  That would have been the responsible thing to do.

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The city may be best known for shady deals, but this one is not only benevolent, it’s good for the kids.

Valley Village Park, which many residents in Valley Village consider the crown jewel of the community, has been on the short end when it comes to shade – worse off now than in the past when towering Eucalyptus trees graced the park.  Unfortunately, many of these trees were claimed by disease years ago and had to be removed for safety reasons.

The lack of shade not only makes the playground and picnic areas of the park uncomfortable to use during the hotter months, there could be detrimental health effects – especially for anyone with sensitive skin.  Even with the use of sunscreen, prolonged playtime for kids may not be advisable.

If our local families had the freedom to limit their visits to morning or late afternoon hours, perhaps this would not be that big a deal.  However, lifestyles being what they are, many parents do not have the luxury of scheduling play time for their children during the most comfortable parts of the day.

I recall  my childhood days when I lived in the Bronx – it really wasn’t all that long ago….in geologic time.  Playing on the concrete sidewalks from 11 AM to about 3 PM was not an option.  The nearest shady park was quite a distance, and even there the playground equipment was not covered.  You needed a NASA spacesuit to play on the equipment or you risked receiving burns.

A subcommittee of Neighborhood Council Valley Village has been hard at work creating a new plan for the park.  Shade is just one component of the larger picture.  The plan has been discussed in public subcommittee meetings and was presented to the entire NCVV Board at its regularly scheduled monthly meeting held on April 27 at the Colfax Charter School auditorium. 

The funding for the project comes from the city’s Quimby Fund; use is restricted to park upgrades – not maintenance. The source  for the Fund comes from developer fees. 

Laura Chick audited the fund back in 2008 and found it underutilized, which may have been partly due to lack of administrative support from Recreation and Parks.

Regardless, the Recreation and Parks Department has been most cooperative in working with NCVV since the inception of the project and a plan is ready for immediate implementation. I personally sensed the commitment of the department’s staff member assigned to us when she appeared before the NCVV Board this week.

Recently, a group of stakeholders has proposed another concept for dealing with the shade (the group is otherwise in full agreement with the rest of the plan).

While the group’s participation is a welcome development (there should be such involvement in everything the Board considers), their concept comes so late in the process that I fear it could delay the implementation of an already well vetted plan.

In the past, such a delay would have been a minor consideration, but times are different now.  As one who has followed the angst and turmoil created by the city’s budget crisis ( and covered in this blog in great depth), I fear any delay may put us at risk of losing our place in line for use of Quimby Fund dollars.

All projects affecting city property requires administrative support from the city – even when fully funded as this one is.  Although I am not a fan of the administrative capabilities of the city as a whole, the local Recreation and Parks people have proven themselves to be a true partner in this endeavor.

The design differences between the existing and proposed shade concepts are immaterial in my view – certainly not worth delaying the implementation and incurring the risks associated with it. 

I recognize there are a wide range of tastes and preferences.  There will rarely be unanimity among individuals or groups.  However, we are united in our commitment to make Valley Village the gold standard of urban neighborhoods.

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One of my least favorite expressions is “kick the can down the road.”

I dislike it almost as much as “six of one, a half-dozen of the other.”  I only utter that one in conversations with my daughter when I want to annoy her.  She detests the saying  as much as I do.

It is not as if these metaphors lack substance; it’s just that they have been so overused that their impact has become diluted.  Fortunately, the latter of the two is rarely used now, but the other rings in my ears like an empty can rolling down a staircase – whether it was kicked or not.

Almost all politicians, candidates, journalists and activists make “kick the can” their mantra when discussing local, state or federal budgets.

It came as no surprise, then, when City Controller Wendy Greuel characterized the mayor’s proposed budget as kicking the can down the road.  What is really sad is that her statement represents the extent of her efforts to publicize just how serious the problem is.

Greuel’s role in dealing with the city’s fiscal crisis has been as ineffective as the metaphor has become.  What’s more,  she helped create the “can” in the first place!

While serving as a member of the city’s finance and budget committee, she never once considered applying the brakes to the growth in spending even after the real estate bubble burst, much less propose cuts.  

One of her last votes as a council member was in favor of the Early Retirement Incentive Program, which offered generous payouts for employees to retire early  (by the way, the city will be  borrowing to keep those inflated promises).  She characterized the program as the “most humane … way”  to deal with staff reductions.  If only she had been humane to the taxpayers by supporting outright layoffs without the bonuses, but we have always been low in the pecking order at City Hall.

As City Controller, she has avoided the deficit at almost every turn.  As the official responsible for financial oversight, she has failed to inform the public about the consequences of the city’s fiscal negligence.  Performance audits are no substitute for sound advice on controlling spending in a weak economy, especially when most of those audits sit on the shelf in council chambers.  Greuel doesn’t even make a big deal about that, but why would she want to upset potential allies in her run for mayor?

Greuel’s one attempt at warning the public about the depth of the financial crisis turned out to be a “deer in the headlights” appearance on the Fox Business Report last year (OK, I just used a too often cited expression).  She offered no substantive plans for dealing with the city’s budget crisis and avoided taking a stand on meaningful pension reform.

But that was not the worst of it.

She waited until less than two months before the city would go broke before sounding a public warning! 

Los Angeles is a $6 billion operation, not the typical household budget where you might warn your spouse or significant other that paying next month’s Macy’s bill is going to be a stretch. You would assume the controller would be on top of the projected cash flow many months in advance and make it job one to keep the public engaged,not to mention pressuring other officials to take it seriously, even if it means casting them in a negative light.

That’s not Greuel’s style.  She shies from confrontation because her own political career is more important than the fiduciary duties that come with the office. 

The field for mayor is growing as expected.  Austin Beutner, Jan Perry and Kevin James are committed candidates, with others sure to follow.  Greuel has filed but has stopped short of making a formal announcement.  I hope she does run because she would, in all likelihood,  lose.  It would be the end of her career as an elected official in the city, a milestone that could represent her most worthwhile contribution to good government.

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For public pension boards living in the past standing behind the 8% earnings assumption currently propping up overstated plan funding levels, you are advised to read this outlook.

Ten years ago, the US economy was three times larger than China’s.  China is now projected to overtake us as the largest economy in the world by 2016.

That estimate could easily be off by a few years, but the momentum behind China’s economic growth will eventually leave the United States behind, even if China suffers a recession, which could very well happen.

The forecast does not mean doom and gloom for our nation or the rest of the world;  it does mean we must re-examine assumptions we use in all aspects of our financial planning.  More importantly, it means a reassessment of financial risk is in order.  Why?  Because no one really knows what’s over the horizon.  When you cannot project the future with confidence, you must be conservative with your assumptions.

Can the public unions continue to hold to 8% as the long-term risk-free earnings rate?  Leaders as naive as the SEIU’s Julie Butcher and Robert Schoonover think they can.  They and others in their camp assume there is clear sailing ahead without qualification.  Their outlook is similar to assuming the city will collect 100% of past due outstanding fees.

The rates used by LACERS and FPP are political benchmarks designed to head off a reckoning with defined pension plan funding levels.  Since the taxpayers are on the hook for investment risk, why should the public unions care?

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I’ve been hoping against all odds for meaningful pension reform in California.  When I say meaningful, I don’t consider the latest deal Los Angeles is offering the Coalition of City Unions as the standard. That proposal does little to resolve the structural problems associated with retiree healthcare and defined benefit plan retirement payments.

I want to see a hybrid plan where employees cover at least half of the retirement and one-third of the health costs, and that depends more on a 401K-style plan which includes modest employer matching contributions (say 50% of the first 6% contributed).

That’s why I was disappointed when the handful of Republicans who were negotiating with Governor Brown over extensions of temporary taxes did not make reform the benchmark of quid pro quo.

Discussions became murky and undefined when so many other issues were on the table.  As a result, no agreement was reached.

It appears that Brown will push ahead with a tax extension measure for the November ballot without one that reins in pension costs.

The Republicans lost whatever initiative they had.  Even if Brown was not going to agree to the level of reform the state needs, the GOP would have held the high ground by demonstrating that they gave it their best shot.

That was shoe number one.

Well, shoe number two fell the other day, but this time it was Brown who dropped it.

The Governor approved a pension deal with the Correctional Peace Officers Association that, among other things, would allow the guards to carry over and cash out unlimited vacation time upon retirement.  With eight weeks of vacation allowed per year, anyone can see that the potential cost is staggering.

These are the same prison guards who get paid for walking from the parking lot to their posts.  The same guards who deliver cell phones to inmates for a fee.

If you ever watch MSNBC’s Lockup, you’ll know the guards have to deal with society’s worst.  I understand the need for generous vacation benefits to escape the daily confrontations they face with sociopaths and psychotics.  But unused vacation must have tight caps.  Besides, their overall compensation and health benefits already make the cost of incarceration in California the highest in the nation.

If ever you could make a case for outsourcing, guarding convicts is as good a starting place as any.  There are states who will offer their services for less  – even other countries, although standards would have to be established for shipping prisoners overseas.

If Governor Brown had any hope of winning the voters’ support for a tax extension measure, it just evaporated.  He has handed his opponents weapons grade ammunition. They will wave the contract like a bloody shirt.

Even if the legislature fails to approve the deal – a distinct possibility since it will require four Republican votes – the stench of the attempted  payback for the $2 million in campaign support Brown received from the guards will cling to him.

Brown was elected for his extensive experience in state government and the wisdom that most expected came with it. If anyone was going to craft an acceptable compromise between taxes and pension reform, he was the one.

He’s had his successes and failures.  You would think he learned from them.

Maybe not.

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One of the worst tsunamis to strike California did not occur along the coast, but near the Nevada border at Lake Tahoe.
It was triggered my a massive landslide near present day Homewood (about midway on the West Shore) and sent water sloshing back and forth across the lake as if it were a bathtub.  The waves were hundreds of feet high.  McKinney Bay was created.
Follow this link for an excellent simulation of the event.
Although a repeat of the massive landslide that triggered the event is unlikely, a 7.0 earthquake could produce tsunami waves around thirty feet tall which would ravage properties along the beaches, obliterate Kings Beach on the North Shore and cause widespread damage to South Lake Tahoe.

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