Archive for May, 2012

Up until about two weeks ago, there were two candidates for the mayor of Los Angeles willing to talk frankly about the sorry state of our city.

After Austin Beutner dropped out of the race, that left Kevin James as the only voice with the backbone to discuss the serious challenges facing Los Angeles.

But what about Jan Perry?

On occasion, she has been openly critical of the city’s direction, especially on DWP matters.  I was pleased when she challenged the shabby treatment she received at the hands of the Villaraigosa faction in charge of the redistricting committee.

So, I was anxious to hear what she had to say when she appeared at a candidate forum held at CSUN.  I listened to it in entirety, courtesy of a video posted at the Studio City Patch web site.

The event was moderated by none other than Chris Essel, former candidate for the CD2, and most recently the head of the Community Redevelopment Agency.

To be clear, it was a forum and not a debate. The questions were screened in advance.

To my great disappointment, it was more like watching Kathy Lee and Hoda (watch the SNL version.   It isn’t much different from the actual program).

Essel and Perry did not hesitate to pat each other on the back. At least they acknowledged their long-time friendship early in the program.  To that extent, credit them for full disclosure.  The content that followed wasn’t much of an improvement.

The closest Perry came to talking straight was when she described the city as being in a “fragile” state. 

If that’s the strongest term she could muster, then  the Council Member either does not fully understand the seriousness of the financial debacle facing us, or she is in denial.

Water mains will be replaced by the DWP on average every 200 years (the average age of existing mains is close to 100 years).  Fragile?

The current general fund deficit is $200 million, even after several years of cuts, with more of the same in the years to come.  Fragile?

Emergency response times increasing – fragile?

Fragile might be a more appropriate term for goods sold in a china shop.  I have news for Perry – the bull has already visited LA’s china shop. There’s nothing left but to sweep up the broken pieces.

She said she would support a less generous benefit tier for new employees to help rein in retirement and health costs.

That’s the absolute minimum needed to restore financial health.  The current plans will continue to absorb an increasing share of the general fund – no signal from Perry to deal with them.

She did spend about fifteen minutes (roughly one-fourth of the forum’s time) on the demise of the south central community garden, including a ten-minute video on the subject.  I realize the garden was important to some, but hardly a key issue in relation to all the others facing the city.

Los Angeles is a city living on borrowed time.  Perry, Garcetti and Greuel are not addressing the structural nature of the deficit.  No one expects anyone to offer perfect solutions, but all of the candidates have an obligation to educate the public about the dangers of not dealing with it.

Perry will appear at Valley Vote on May 21.  Let’s hope she has more to offer.

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Total eclipse

Sometimes I’m in the wrong place at the wrong time, as I was in Virginia last August when the earthquake struck just ten miles from my client’s office.

Sometimes I am in the right place at the right time.  That was the case today.

Lake Tahoe was in the direct path of the total eclipse that traversed the southwestern states.

This was my second total eclipse, the last one was back in 1970. I was visiting Virginia Beach at the time.  That one was more pronounced because the moon was closer to the earth, blotting out more of the sun.  It grew dark enough for the crickets to chirp at noon.

This picture was taken with my camera phone using a piece of undeveloped 35mm film over the lens, which accounts for the orange tint.

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Every career politician currently serving in City Hall will deny that bankruptcy is an option.

Don’t get me wrong – bankruptcy is something I would like to see the city avoid, but if our present officials do not deal with growing cost of retirement and health benefits, we will head down that path.

The problem is that the city council and mayor live in a virtual reality where public employee unions rule at any cost.

Many experts talk about the unfunded pension liability of public retirement plans and how it will bring municipalities down.  They are correct.  Unfortunately, the solid math behind these calculations is enough to make your eyes glaze over. If you ever want to get rid of houseguests who have overstayed their welcome, just talk about unfunded liabilities and they will be out the door within five minutes. I can offer a few other accounting subjects if you are interested, or just invite me over for dinner and I will guarantee that the evening will end by 9 PM.

Unfortunately, most registered voters in Los Angeles react with the same disinterest when it comes to this complex subject.  They don’t realize it is no different from the negative amortization that was at the root of much of the nation’s mortgage crisis. You can’t keep piling on accrued debt and expect to pay the bill.

The city does not have the power to create money as the federal government does. If it does not restructure its labor contracts (either through bankruptcy or renegotiation) the only choices left are to pass these costs on to the residents in one of two ways:  higher taxes and/or fewer services.

Since higher taxes are a hard sell (and who could blame taxpayers for their reluctance to pay more for incompetence), our elected officials are committed to reducing services.

The city’s Chief Administrative Officer, Miguel Santana, projects that retirement benefits will consume over 30% of the general fund within a few short years – that’s up from 20% today. That is a 50% increase in retirement costs with no services to show for the added drain on the city’s treasury. That is a ratio the public can understand, but it under-reported in the local media and rarely discussed in town hall meetings with city officials.

That’s unfortunate.

As long as they can turn the lights on, take a shower, flush the toilet and drive on the streets, residents will not care if city employee compensation is strangling the general fund. They will not notice that services and quality of life are slowly but steadily eroding.

It is what I refer to as virtual bankruptcy.  It is an insidious process that strips away expectations by gradually lowering the bar of service.  Our leaders know that and are counting on us to not compare performance levels from year to year. For example, how frequently does the average person call for assistance from the fire department?  Not very often. For most of us, we cannot recall how long it took for emergency services to respond to our last 911 call. There is no frame of reference.

Eventually, a tipping point will be reached.  It will be similar to what many of us experience around early September. After over two months of diminishing daylight we suddenly realize that the days have become shorter – no more time for an evening walk after a hard day’s work; night closes in earlier; we hunker down by 7 PM and watch one-sided cable news shows to ward off the gloom. And just like in the Direct TV commercials, we will get mad.  We will pick up the phone and call our city council members and give them an earful.  They might finally listen because our support will no longer be a given.

So, the question is, when will night fall on the City of Los Angeles?

Will it be too late before we notice?

Will we all end up in anger management?

Will our officials be tarred and feathered?

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