Archive for June, 2011

Wendy Greuel’s report of May 19 addressing shortcomings in the parking citation collection process also exposes inadequate procedures within her own department – the Office of the City Controller.

The Department of Transportation had at least $270 million in delinquent accounts over five years old, but never written off.

She downplayed the impact of the delinquencies because citations over five years old are kept in DOT’s inactive files and not included in the city’s official financial statements. However, what Greuel does not disclose is that this means the controller’s office is not performing an accounts receivable rollforward, which is an important standard operating procedure in any well run organization, and in quite a few poorly run ones as well. It provides an excellent test of the balances’s reasonableness.

For the non accountants out there, here is how it works (the amounts are examples only):

The Ending Receivable Balance from the prior year………$ 1,000,000

New billings (citations in the case of the city)………………………200,000

Less: amount collected in the year………………………………………(300,000)

Less: Reserve for uncollectible citations…………………………….(   50,000)

Ending Balance……………………………………………………………………..$ 850,000

Given that uncollectible activity was not being reported or disclosed, the rollforward would have produced an expected balance of $900,000 , but DOT would have reported the receivable balance net, or $850,000. The difference of $50,000 would have been evident and served as a red flag for the controller’s staff to determine why it existed.

Evidently, the internal controls and procedures are weak when a simple analysis that would have warned of a problem – especially one for $270 million – was not performed. Greuel is simply taking departmental numbers without testing them for reasonableness.

We cannot keep electing politicians who have zero knowledge of financial management to a post as important as City Controller.

You have to wonder what else is being overlooked.

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Governor Brown did the only thing he could do when he was presented with a frivolous budget bill from the legislature: he vetoed it.

I do not envy Brown’s position at all.  He is squeezed between the proverbial rock and a hard place, but he can only blame himself for his predicament.

The Governor must make meaningful concessions on a spending cap and pension reform to win over enough Republican votes to construct a budget that can pass the smell test..and then some.

But how will he do that?

If it were just a spending cap, a reasonable compromise would be attainable.  There would be give and take and no one will be truly happy, but that is what compromise is all about. He only needs to deal with the leadership of both parties to reach an agreement on a cap.

Pension reform is another matter.  The unions will become an uncontrollable party to the negotiations. Brown’s political career is largely attributable to broad union support.  To offer the pension reforms many in the state would like to have, but especially the Republican leadership, he will  alienate his union connections. He will also alienate the Democrats who control the legislature.

The outcome from redistricting is a factor Brown must consider, too.  There are enough fiscally conservative Democrats who will be less likely to support their party in the post redistricting Assembly and Senate races if they believe Brown and the Democratic leadership did not do enough to rein in state employee benefits.

The Governor’s situation is more like being caught between an avalanche and a chasm.

It is the job he chose; he has to deal with it.

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Paul Koretz, in an article published by Citywatch, made a case for the importance of deliberation.  He was referring to his role as a City Council Member, but his remarks apply equally well to neighborhood councils.

Concerning the debate in his district over mansionization, he stated:

I could have unilaterally sought changes to zoning rules in this neighborhood — the law and City Council system certainly allow me to do so — but I did not. That’s because I firmly believe in dialoging and working with constituents and constituent organizations in order to maximize public input and grassroots involvement.

In other words, I am a proponent of having a process in which people from the community are invited to participate and be heard. The fact is public-participation leads to better proposals and better results.

Neighborhood councils are regularly approached by groups representing various causes. In many cases, presentations are made with the goal of informing  board members about specific issues.  The input is welcome and, if appropriate, considered at a later date when or if action is required.

Sometimes, a motion has to be expedited.  That was the case with Measure B.  The City Council rushed it to the ballot leaving the neighborhood councils little time to act.

Occasionally, though, some groups push for a motion right then and there even when there is no immediate need for one. It is as if no other side should be heard and nothing else matters.

I already discussed the Sierra Club’s attempt to have Neighborhood Council Valley Village push a motion through in support of no coal by 2020. The presenter cited the opinion of a consulting group engaged by the Sierra Club that claimed the city could transition completely away from coal by that year without a measurable rate impact on DWP’s customers. 

One must take the claims made by consultants engaged by interest groups with a healthy dose of skepticism, as we did with the research results of scientists hired by tobacco companies claiming second-hand smoke was harmless.

If getting off coal by 2020 could be accomplished with little or no effect on rates, there would be little or no opposition to the objective.  However, no one really knows the answer at this point. It makes no sense to buy into a long-term strategy when there is little certainty as to the cost. 

Besides, coal is not the only utility related issue on our plate. A 9% sewer rate increase is being sought for each of the next ten years.  There are valid reasons why the charges should increase, but are you willing to support giving the Bureau of Sanitation carte blanche for that large an increase, year after year?

One neighborhood council did just that after hearing a presentation by the BOS staff. Even though a motion was not requested, the NC passed one. Thank goodness that council’s board members do not negotiate rates with the DWP.

For the record, Jack Humphreville and I listened to the presentation in a meeting we had with key staff members of the bureau.  Kudos to them for a very informative session, but buying into a ten-year plan will require vigorous public debate.

There will also be pressure to increase water rates to support important reclamation efforts.

The size of our utility bills might eventually make the mortgage crisis tame by comparison.  It does not do much good to make your house payment if you cannot afford the utilities.

You cannot take utility components as one-off issues.  They are all important and must be considered as a whole.  Flushing the toilet and drawing water are as important as reducing reliance on coal. Ratepayers must be protected from a perfect storm of across-the-board increases, whatever the reasons. Compromises must be made and priorities set…and re-set as conditions change over time.

It is pretentious of certain groups to assume their goals override all others.

It’s not just utilities; it can be any issue.

Neighborhood councils should avoid jumping on bandwagons and passing feel-good motions. Be wary of pleas from influential activists, official representatives or lobbyists who would rather have us throw caution to the wind and sidestep sensible due diligence.

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The late Howard Cosell coined the term “jockocracy” to describe the erosion of ethics created by loading up the broadcast booth with ex-professional players. Because they are part of a close-knit group of sports alumni, former pros could be more likely to pull their punches when describing or commenting on events on the field.

It’s part of everyday life and we accept it.  It is relatively easy for all but the most fanatic team loyalists to filter through the hype, exaggerations and oversights perpetrated by those who spent their careers competing in front of large audiences; enduring the “thrill of victory or the agony of defeat,” a phrase memorialized by broadcasting legend Jim McKay.

So when Vincent Bonsignore, the assistant sports editor of the Los Angeles Daily News, editorialized in favor of constructing a new stadium in downtown, I had to don my reality filter and sift through the hype he could only have picked up from AEG press releases.

It is not as if Bonsignore has devoted his relatively short media career to covering local politics and the city’s financial disaster. His perspective is that of a sports journalist who will only benefit from the addition of a football franchise, not only in terms of writing additional stories, but free admission to NFL games at the proposed venue in the due course of performing his job.

It has to be an exciting thought and I can understand his enthusiasm.

All of us would be excited, too, if the city were not on the line for even a penny of the project, as Bonsignore, the mayor, AEG and some members of the City Council would like us to believe.

Bonsignore seems to be clueless why the prospect of $350 million in debt issued by the city “freaks the people out.”  What’s the worry when the new tax revenue from the stadium’s operating receipts covers the debt payments, he concludes. AEG will make up the difference if taxes fall short.

Perhaps he should stick to covering sports and not city finances.

You see, the city of Los Angeles has a structural deficit problem that will last for years to come.  It would not be as bad if City Hall came to grips with the realities of pension and healthcare reform, but I don’t see any will on the part of our electeds to deal with it.

Therefore, we need every dollar of new taxes generated by the stadium to flow into the general fund.  Using it to pay off the $350 million in debt is using our own money to make the payments. I’d rather see the additional monies used to support core services, which will also include additional demands created by events held at Farmers Field.

The debt would be used to finance the reconstruction of part of the convention center, connecting it with the stadium.  Bonsignore suggests that would attract new business to the convention center, which does not even rank in the nation’s top fifteen.

A new stadium without a reconstructed convention center connected to it is bound to realize more business based on new sporting events alone, especially considering the mild climate that is the norm during most of the year. What’s the marginal revenue associated with the reconstruction versus what we’d expect from making less costly improvements to the convention center?

These are important details that have not surfaced, or at least not to a truly independent set of eyes.  These are also details one hopes will be tested without the threat of a deadline issued by AEG hanging over the city’s head.

When someone is telling you to commit by a certain date, or else, it is time for the radar to go up.

We are not playing penny ante poker.

And we don’t have a rich uncle bankrolling us at the table. We are the bankroll and the stakes are high.

Bonsignore is out-of-bounds on this issue.  At least the Daily News kept his editorial on the sports page.

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By a vote of 13-7,  a motion calling for eliminating coal power as an energy source by 2020 in Los Angeles was not passed by the Valley Alliance of Neighborhood Councils.

Overall, there were about fifty people in attendance at VANC’s monthly meeting; each neighborhood council is allowed one vote.

A representative of the No Coal by 2020 movement made a presentation and claimed transitioning off of coal by 2020 would be feasible, without significant costs to the ratepayers.

In the discussion that followed, his claims concerning the cost impact were largely met by healthy skepticism.  The general concern was that the objective is so large in scope and must compete with the DWP’s need to replace infrastructure, that no reasonable assurances could be made to shield the ratepayers from even higher rate hikes.

While a couple of individuals tried to paint taking a position of non support as anti-green, that was clearly not the intent of the thirteen neighborhood councils who voted it down.  I am familiar with most of those who rejected the motion and can safely say they want to transition to alternative energy, but without a specific time mandate.

Stephen Box, who strongly objected to NC Valley Village’s earlier decision not to introduce a motion of its own, made a plea for the group to view the motion as a “vision” rather than a firm policy statement.

What Box does not realize, and he should know better since he’s been around the block, is that a motion can be hijacked by our electeds to support their views in a manner that may go beyond the intent that led to its passage.  To assume our politicians won’t differentiate between a vision versus a commitment and, instead, spin the message as a mandate to do what they please, regardless of the cost, is naive.

If you don’t believe that, just remember how the trash fee hike was subverted and applied to other uses other than hiring the additional cops the mayor promised.

Getting off of coal by any year is not a simple or predictable proposition.  We must insist that our officials balance cost with environmental needs. This is not a one-off decision to be made in a vacuum.  There are competing needs for our rate dollars including water conservation strategies and efficient delivery systems.

By holding to a specific deadline, we are guaranteeing spurious decision-making, much like city departments rushing to spend their budgets before the fiscal year ends.  It will be the same helter-skelter process that is already developing for the high-speed rail project.

Let’s proceed cautiously with weaning ourselves from coal, always respectful of the cost to the ratepayers.

Let’s also not forget conservation either.  If city residents can decrease their water usage by 30%, why can’t we make a sizeable reduction in electricity usage, too?

Conservation may not get us all the way, but it could lessen the pain.

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Leonard Stern, the creator of Mad Libs and several classic TV sitcoms passed away.

I thought I would honor him with this tribute:

LOS ANGELES (Hollywood Reporter) – Leonard B. Stern, the (insert adjective) writer and (noun) whose credits included (insert titles) and the word game “Mad Libs,” died Tuesday of heart failure at Cedars-Sinai Medical Center in Los Angeles. He was 87.

The three-time (insert name of an award) winner also created “(celebrity name) and Wife,” the (adjective) drama starring Rock (last name of a congressman dominating the news ) and (name of Las Vegas blackjack dealer) that aired on (media network names).

Stern (verb) “Honeymooners” sketches for the variety show and the (noun) it spawned.

“It’s funny, and it deals with( insert a City Hall decision),” Stern said of ‘The Honeymooners’ in an interview with the (name of an obscure sect).

Stern also was involved in (an activity). “Mad Libs” — a game in which one player prompts another for a list of words to substitute for blanks in a story, hopefully with funny results — was invented in 1953 by Stern and Roger Price.

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If anyone had any doubts about the clubishness of City Hall, all they had to do was read about Councilman Dennis Zine’s almost certain decision to run for City Controller.

Rick Orlov reported that Zine checked in with Wendy Greuel to confirm if she was committed to running for mayor. If so, that would clear the way for his candidacy.

Greuel affirmed what everyone already knows: she will run for mayor.

Why should an open seat make a difference to Zine?

Sure, running against an incumbent is a challenge, but if he truly believes he can deliver in that position, it shouldn’t matter.  Besides, Zine has name recognition, can raise sufficient money and he is serving his third and last term on the City Council.  So, he should just go for it regardless of Greuel’s plans.

What this appears to suggest is the existence of a career network in City Hall.  Our elected officials are more interested in facilitating the personal advancement of their peers than in representing the best interests of the public.

This is not exactly breaking news to anyone following the comings and goings of our representatives. However, it is a practice designed to crowd out potential opposition to incumbents.

If Greuel decided to run for re-election as Controller, would Zine stay out of the race so as not to interfere with her career plans?  If that were the case, what would he get in return from Greuel?

I don’t know if Zine is qualified to serve as the city’s financial watchdog, although I’d hazard a guess he would be better than Greuel – that’s not a very high bar, though.

I will be taking a closer look at Zine’s background in the months to come.  I certainly have one major concern which I will cover in a later post.  However, that concern is not unique to Zine.

I am more concerned that he will run unopposed.  That would deny us the opportunity of a meaningful debate over his credentials and vision for the office.

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The Neighborhood Council Valley Village has enjoyed an excellent working relationship with Colfax Charter Elementary School since the council was formed.

The school serves as our primary public meeting venue.  The logistics provided by the school’s staff is unsurpassed.

It is an honor for NCVV to conduct outreach at the school’s annual fair. 

I will be anxious to learn what the attendance was for this year’s event, which was held June 4th.  All of our board members who participated in manning our booth, along with making and serving popcorn, were taken by surprise at the turnout.

It was nearly impossible to keep more than a few bags of popcorn in reserve.  More often than not, people had to wait until a fresh batch was prepared. Unlike prior years, there was no time for a break.

As anyone knows, there is a strong correlation between popcorn consumption and attendance at events like these.  While economists may disagree about the meaning of the latest uptick in unemployment, or argue over the effect of federal debt ceiling level on long-term government bond yields, there is unanimity in interpreting the popcorn index.

Saturday’s traffic at the Colfax Fair indicates a need to increase the capacity of popcorn production at next year’s event.  That could have a ripple effect on the local economy.  It will also have to be considered in NCVV’s staffing model for its booth.  Regardless, Board Members cannot expect any executive bonuses for a continuation of growing sales, due to a 10% cut in our budget.

The Parents Association of Colfax Elementary, the parents and organizers outdid themselves as never before. 

Colfax is an outstanding example of academic achievement and campus life.  When parents, staff and neighbors cooperate, as they do at Colfax, almost any school can excel.

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I think it is safe to say no one will exceed the late James Arness’ continuity as an actor in the same show, playing the same character.

Certainly Lucille Ball’s TV career was longer, but there were breaks.

Kelsey Grammer matched Arness in playing the same character for twenty years, but his portrayal of Doctor Frasier Crane was split between two series. However, he may already own a record as the longest-lived recurring character as Sideshow Bob in the Simpsons.

My favorite Arness role was far removed from the Hollywood Western genre – the creature in The Thing. My choice should come as no surprise to anyone who knows me:  I am hooked on sci-fi classics.

One of the most memorable scenes involving Arness’ character in the 1951 feature was performed by a stunt double.  Here it is:

Rent it.  The movie has held up very well over the years.

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In his article in the June 3rd edition of Citywatch, Stephen Box described the Neighborhood Council Valley Village decision not to introduce a motion in support of a 2020 deadline for getting the city off of coal as an energy source as ” That moment of caution and the commitment to deliberation is what has brought out the worst in Los Angeles.”

He suggested that the NC’s decision not to entertain the motion ran contrary to JFK’s bold, audacious vision in 1961 to put a man on the moon before the end of the decade.

Aside from that comparison being a stretch – say about 238,857 miles, give or take a little – he equates audacity with strength and sound decision-making.

Audacity has a range of outcomes from success to utter failure, although the results tend to land at the extreme ends of the scale. For example, George Armstrong Custer was audacious. He did not heed the counsel of his Native American scouts and insisted on sweeping into the large Sioux and Cheyenne encampment before reinforcements arrived.  He ended up having a very bad day.

Julius Caesar was audacious (euphemistically referred to as ambitious by his former ally Brutus), and started Rome down the path to ruin.

Using Box’s example of JFK’s objective, while I was as proud as anyone of this nation’s achievement of landing a man on the moon in 1969, I have to wonder if our lives would have been better had we delayed the goal by another decade and focused on other segments of science instead. There is no clear answer, but the question is legitimate.

I don’t think Stephen Box intends to trade examples of where the “audacious power of strong vision coupled with an absolute deadline ” has either improved or detracted from our lives; so, let’s get back to the present.

It is baffling that Box, who opposed the City Council’s audacity of trying to push Measure B down our throats, would somehow have a problem with a neighborhood council wanting to adequately vet a complex and potentially costly objective before introducing and passing a motion in support.

This is not a debate over the desirability to break from coal power. It is whether we want to bear the possible adverse cost of doing it by a time certain. The ratepayers and stakeholders do not have bottomless pockets.  The sobering fact of life is the need to allocate scarce financial resources to achieve the optimal good. The more complex the decision, the more deliberation and debate is advisable.

By comparison, NC ValleyVillage refers property development proposals to its Planning and Land Use Committee.  A recent decision to approve shade devices for a sun-scorched section of Valley Village Park was debated and vetted through the City Services Committee.

The board members of NC Valley Village take our obligation to our stakeholders seriously. That can’t be said for some officials in City Hall.

There are always multiple sides to any issue.  For a lobbyist or other representative to make a presentation to a board and expect a motion of support based solely on their organization’s point of view is an affront to the community as a whole. Other opinions count. 

In the case of eliminating coal by 2020, the DWP Oversight Committee has raised concerns over the cost of transitioning by the target date.  This committee is composed of a cross-section of neighborhood council members, many of whom have devoted significant personal time to understanding the energy issues facing the city. At a minimum, their voices need to be heard.

Whether we eliminate coal by 2020, or years later, will play a miniscule role in cleaning up the environment as a whole as long as emerging economic powers keep stoking the coal furnaces for generations to come.  There will be adverse health consequences regardless of when we pull the trigger on the Arizona and Utah coal-fired plants.

It is highly desirable to transition to green energy – no one is disputing that, but we can’t risk breaking the bank in order to stubbornly cling to a mandated deadline.

To ignore reality and not allow alternative opinions to enter the debate – any debate –  is not in the best interests of our stakeholders.

While Box may refer to NCVV’s stand as timid, I think of it as responsible.

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