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Mayor: Revenues up, full-time city services OK

April 8, 2010 12:00:00 AM PDT
Mayor Antonio Villaraigosa said Thursday an unexpected increase in revenue has alleviated what he perceived as a need to shut down parks, libraries and other city agencies two days a week. "We're hoping the added revenues will put us in a position where we don't run out of cash," he said. "(Still), we're developing contingencies to make sure that in the event that we do, that we have the wherewithal to make the cuts that are necessary."

Villaraigosa made the comments a day after the city's chief legislative analyst said the mayor did not have the power to shut down agencies without the concurrence of the City Council.

Villaraigosa did not provide an estimate of how much the city's revenues had exceeded projections, but he said the city remains deep in the red and still needs $73.5 million that was expected to be transferred to the General Fund by the Department of Water and Power. The DWP has since announced that it would not be providing the money.

"I can't direct (DWP) to do something that in any way violates their fiduciary responsibilities, but I certainly would like to see a transfer as well," Villaraigosa said.

The City Council's ranking members issued a letter to DWP Interim General Manager S. David Freeman today, demanding the money.

The letter signed by City Council President Eric Garcetti, President Pro- Tempore Jan Perry, Assistant President Pro-Tempore Dennis Zine and Budget and Finance Committee Chairman Bernard Parks states, "It seems that the (DWP) is holding the city taxpayers hostage in asserting that fulfilling your commitment to the city (remitting the $73.5 million) will assuredly result in a bond rating downgrade."

"This is not a foregone conclusion and as the leader of the utility, you should be making every effort to mitigate, rather than exacerbate, the uncertainties surrounding your financial situation," the letter states. "A majority of the council has made it clear that it will support an immediate rate increase and future rate increases that are well-justified and transparent, and nothing in the council's actions should lead you or the rating agencies to conclude otherwise." The letter added, "The council is fully committed to aggressively pursuing a cleaner, greener and more efficient department and will be your partners in the future in making sure that the people of Los Angeles are well served, both environmentally and fiscally.

"The council also stands ready to commit to the department the funding necessary to achieve its mission, but will continue to do what we are elected to do, ensure that the ratepayers and owners of the department are protected and that the rates they must pay to receive service from the utility that they own are transparent and justified."

Villaraigosa asked the DWP on Thursday to remit $20 million generated through cost-cutting measures.

"(DWP) can find up to $20 million in efficiencies and I'm requesting that -- at the minimum," he said.

Garcetti said that aside from an increase in revenue, "belt- tightening" measures have resulted in a "more robust" fiscal situation for the city.

"We need to be ready for any contingency but right now, it doesn't look like we have to do two days a week (of shutting down certain city services)," Garcetti said.

Over the last several months, the city has cut costs by laying off at least 43 workers, granting another 2,400 workers early retirement, increasing debt collection and negotiating lower costs for its contracts.

When the DWP vowed to withhold the $73.5 million because the council rejected its application for 5.7 percent increase in electricity rates, Villaraigosa on Tuesday called for shutting down non-revenue generating services, which would essentially furlough thousands of employees.

The city's Chief Legislative Analyst Gerry Miller said on Wednesday, however, that the mayor cannot take such action unilaterally.

Villaraigosa and the council leadership met behind closed doors this morning, and later tried to downplay the dispute.

"We all agree we need to put together the necessary changes to our emergency declaration to give us the latitude and flexibility to prepare for contingencies," he said.

"My hope is that we won't need to go two days or even one day a week (of shutting down city services), but we all agree, we need to be prepared," he said.

The city's budget analysts were expected to release the official Financial Status Report this week.

Meanwhile, the Los Angeles Protective Protective League warned that budget cuts were forcing police officers to forgo overtime and take on desk jobs normally performed by civilians.

The union's president, Paul Weber, said police deployment throughout the city is suffering because civilian employees are being subjected to furloughs or being offered early retirement, and the police department cannot replace them because of a hiring freeze.

"The impacts are very real, as officers are forced to stay at home because of overtime concerns and fill in for furloughed civilians or vacant civilian jobs," Weber said. "City officials need to carefully consider the impacts of budget cuts and realize the consequences to public safety of any actions that increase police response time and decrease patrols in our city."

LAPPL estimated that between June 2009 and June 2010, the number of civilian employees at the LAPD is expected to drop by 1,000 to about 2,900. Weber said they perform duties crucial to effective law enforcement, such as taking 911 calls, warrant processing, data entry for suspect booking, grant writing and crime statistics analysis.

At present, more than 200 "full-time or able-bodied" police officers are working in civilian jobs on a daily basis, LAPPL spokesman Eric Rose said.

He said this "threatens to reverse LAPD's historic crime reductions in recent years" and called for the civilian positions to be reinstated.