Flush With Cash, LA Approves 'Boring' $9.86 Billion Spending Plan

LOS ANGELES, CA — The Los Angeles City Council Monday unanimously approved adjustments to Mayor Eric Garcetti's proposed 2018-19 budget, cruising through the debate with no disagreements about the $9.86 billion spending plan.

The quick and efficient deliberations were a byproduct of the record level of funds available, with the council agreeing to all of the mayor's major proposals with relatively minor changes or adjustments in a vote that appeared to make everyone happy.

"I told you it was boring," said City Councilman Paul Krekorian just before the council voted on the spending plan. Krekorian chairs the Budget and Finance Committee, which spent 33 hours in meetings over several weeks dissecting the proposed budget.

"During other years we had plenty of excitement, but none of it was good," Krekorian told City News Service. "It was during the worst parts of the Great Recession when we were facing massive cuts to services. We're at a point now where through hard work over the last decade, we've recovered and maintained financial discipline over the taxpayers' money so that we are now at a place where we have a comfortable budget that's beginning to restore services that have been cut."

General fund revenues for 2018-19 are projected to be $6.17 billion, an increase of $339.5 million, or 5.8 percent, from the 2017-18 budget. The additional money is due to an increase in revenue, including from the transient occupancy tax, property taxes, business taxes and sales tax receipts.

The budget sets aside enough funds to maintain the police force above its current level of at least 10,000 sworn officers, and additional money to hire more civilian staff that Krekorian said would help get more officers out from behind desks and on patrol. It also provides enough to hire 200 firefighters, and includes $41 million for sidewalk repairs, an increase of $10 million.

Krekorian also noted the importance of the amount dedicated to reserves, which totals 7.4 percent of the general fund between the reserve fund and the budget stabilization fund. The amount is "the most that we have ever had in the city's history set aside for economic downturns or other challenges that we may face," Krekorian said.

The council also approved $20 million Garcetti earmarked to build temporary shelters for the homeless for his "A Bridge Home" program, which is one of the mayor's signature proposals for the new fiscal year. In his recent State of the City speech, he labeled homelessness as the central issue facing the city.

The number of homeless in Los Angeles spiked in 2017 by 20 percent to over 34,000, according to the results of the Greater Los Angeles Homeless Count, although the Los Angeles Homeless Services Authority recently said the numbers in the county were inflated by 2,746, and it is not yet clear how many of those were within the city of Los Angeles. Tom Waldman, a spokesman for LAHSA, told CNS the organization is still trying to recalculate the numbers for the city.

The spending plan for the 2017-18 year includes a record level of funds for homelessness programs, from the current year's $178.5 million to around $440 million. More than half of the new homeless spending would use funds from Measure HHH. The bond measure, which Garcetti helped convince city voters to approve in 2016, is expected to raise $1.2 billion over 10 years for permanent supportive housing construction.

"This budget includes, as you know, the city's largest-ever investment in the most pressing problem we face, our fight to end homelessness on the streets of Los Angeles," Garcetti said during a news conference at City Hall.

The spending plan includes an additional $10 million for homeless services related to the shelter plan or other homeless programs on top of the $20 million Garcetti sought. The $10 million has been set aside in the unappropriated balance and would require additional council action to be approved. The council listed several possibilities for the funds, including for setting up more shelters or costs associated with them.

Councilman Jose Huizar, who represents the Skid Row area where an estimated 2,000 homeless people are located, had asked the Budget and Finance Committee for $20 million just for temporary shelters for that neighborhood. Although the approved budget does not include what Huizar sought, millions of dollars in state budget surplus money for homeless programs is expected to be forthcoming, and Garcetti said he wants some it to help fulfill Huizar's wish.

"I was very sympathetic when Mr. Huizar said we could spend all $20 million just in Skid Row alone. Awesome. Let's do it. And now, it looks like with the state, if we keep the pressure up, will be adding some dollars," Garcetti said.

Before the vote, Krekorian did warn the council that stormy days could be in the future. Among possible challenges are increased workforce costs, pension liabilities, the cost of police overtime and a downturn in the national economy, he said.

"These are unquestionably challenges that we will still need to face, so I just urge members to be cautious about being too confident in the fact that we have positive trajectories. We have to be prudent about those risks going forward in the future," he said.

Krekorian is not alone in raising concerns over the city's pension liabilities, which total about $1.177 billion and make up 19 percent of the budget, as well as the fact that some key contracts with city employee unions are up for renewal this year. Members of the city's neighborhood councils, who are on a budget advisory committee, pointed to pensions and city contracts as problem areas of the budget during a City Council meeting on Friday.

"We have concerns that the budget isn't in fact balanced, (but) rather is trying to hide the concerns that the city is engaged in intergenerational theft while the city is dumping billions of dollars in debt on the next two generations of Angelenos," said Jack Humphreville of the Greater Wilshire Neighborhood Council. "The proposed budget does not take into account raises for the civilian workers, which we have been told will be about $40 million."

But Garcetti argued that the budget strikes the right balance, aggressively attacking the issues that need additional investment such as homelessness, while also holding back reserve funds.

"This is rooted in our commitment to always being fiscally prudent and economically conservative. That is the sort of work that has driven the city's economic turnaround," Garcetti said.

Although the City Council approved all of the adjustments it made to the mayor's proposed budget, the official vote won't happen for a week or so while city staff drafts the adjustments and sends a complete 2018-19 budget back the council for a final vote.

City News Service; Photo: Shutterstock