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LA Times a Defender of Vernon? Editorial Argues Against $60 Million Payoff for Nearby Cities

It would be tough to argue that anyone has been as dogmatic and full of scrutiny as the LA Times in the past two years when it comes to covering local government scandals. The paper has been relentless in its coverage of compensation, Bell, Vernon, and Montebello, to name a few prominent examples. This year the involuntary disincorporation of the city of Vernon undoubtedly grabbed plenty of attention, and while the effort was strongly beaten back, receiving far less attention was a ransom payment of sorts from the city of Vernon. Officials in Vernon agreed to pay $60 million to fund community projects in neighboring cities as part of a deal in order to avoid disincorporation. The large sum of money has the city’s substantial business interests worried, as there are concerns about the sum of money Vernon has to dish out.

While Vernon agreed to the payment, is it fair for one city to pay so much to benefit the conditions of nearby cities? In an editorial, the LA Times argues no. State Sen. Kevin De Leon has posited the $60 million will mitigate years of pollution, traffic and other problems caused by Vernon's factories; however, the Times argues the following in an excerpt from its editorial:

“Though Vernon does welcome dirty industries, those businesses must abide by the same state and federal environmental measures as any other companies in California; if they fail to do so, neighboring cities have every right to call in the environmental cops. Similarly, if Vernon creates an illegal public nuisance in its region of southeastern Los Angeles County, other cities can seek redress in the courts.

Vernon is an easy city to dislike, incorporated from the start to draw industry and enrich the local landowners. But if it doesn't break the law, it doesn't owe its neighbors money and shouldn't have been singled out for disincorporation by legislative leaders.

Right now, Vernon's debts might make the $60-million difficult to pay. That's Vernon's problem; it agreed to the deal and must fulfill the terms. But as reviled as Vernon is, other California cities should be contemplating this situation with concern. If Vernon can be pushed into an expensive deal because it has money and tends to rile people, which city might be next?”

Good Signs: State’s Unemployment Rate Drops Again; New Labor Force Data

Inch-by-inch, economic reports on the state of California are improving—ever so slightly. The Employment Development Department has released its latest figures, which show 6,600 new jobs were added during the month of November. Consequently, the unemployment rate now stands at 11.3%, thereby making November the fourth straight month in which the jobless rate has declines. In October it was at 11.7%. The latest rate is the best the state has experienced since the worst of the recession dealt California (and the nation) a blow back in 2009 and now the country’s overall unemployment rate stands at 8.6 percent.

Since 2011, the state has added a total of 211,400 jobs. The LA Times reports on the following additional details about the report:

“Similar drops were registered in major regions: Los Angeles County is down to 11.9% from 13% a year ago; Riverside-San Bernardino counties to 12.5% from 14.5% a year ago; Orange County to 8.1% from 9.4% a year ago; and Ventura County to 9.5% from 10.9% a year ago. While economists caution that some of the improvement in the November numbers could be caused by people giving up on job searches, they point to the last two weeks' decline in the number of people putting in first-time claims for unemployment insurance benefits as a positive sign that a sustained recovery is underway.”

You can find unemployment rates and job figures for each of the state’s 58 counties on page 4 of this report.

Escondido City Council to Forego 15 Percent Pay Raise; To Pay Higher Pension Contributions

Escondido’s City Council recently rejected an opportunity to give itself a 15 percent pay raise in light of struggles associated with the city’s tight budget. The council agreed that it would continue to fall under the terms of a 3 percent compensation cut that the council voluntarily imposed over the summer.

The council will also lose the following benefit: a $300 yearly stipend for medical exams. In addition, council members will also pay the full portion of the employee contribution to their pension plans. Previously they were paying three percent of their salary toward benefits.

The council has brought down the hammer on cuts to keep things equal so that similar compensation reductions can be secured from city workers; however, so far a deal has not been reached with public safety officials.

Mayor Sam Abed commented, “We are trying to be in line with the rest of the city employees. We're treating ourselves the same as everyone else.”

The Escondido Council has not given itself a raise since 2008, which is why it was eligible for a 15 percent bump this December. Council members receive $27,663 per year and 9,000 per year for auto expenses. The North County Times points out that “Council members did agree to increase their base pay 6 percent, but said their overall compensation would not change,” as higher pension contributions will negate any increase.

Holding up the ‘Keep Out’ Signs: Health Nuts in Loma Linda Riled over McDonald’s Vote

Residents in the city of Loma Linda have made it clear that they don’t take too kindly to strangers in these parts—that is, strangers being defined as fast food restaurants that jeopardize the healthy lifestyle strongly cultivated by locals.

Caught in the middle is the city council. Budget woes and difficulty attracting big businesses have made life difficult for officials who have worked hard to attract new development, so when the council recently approved the city’s first McDonald’s, many residents didn’t hide their displeasure. Residents clearly feel a sense of civic pride about being healthy and there are many vegetarians in the city. Notably, Loma Linda residents typically have very long life-spans, especially in comparison to many cities, such as nearby San Bernardino.

It’s not clear how strong the blowback to the McDonald’s vote will play out, but many residents have already suggested running with a ballot measure to ban all fast food in the city. Some residents see the invasion of McDonalds as a threat to the city’s status as a “Blue Zone,” which is worldwide recognition of the longevity of locals.

The Contra Costa Times reports on the council’s decision:

“’We're not approving a McDonald's - we're approving a business that any restaurant could occupy,’ Mayor Rhodes Rigsby said, noting the city had strict guidelines for development and the applicant had followed them. ‘Nobody wants to have to go through all of these steps and then at the final step find out this is a capricious government.’”

Event the New York Times has given the city coverage, which can be seen here.

Life Off the Grid: Displaced Americans Find a Home in Desolate Desert Known as Slab City

Life off the grid takes on a new meaning in the stretch of desert land known as “Slab City.” There are no municipal services, no streetlights, no water or sewage service, no rent and no fees, but it is home to several hundreds of people who have left their lives behind to take up residence in what could aptly be described as a shantytown. The effects of the recession are partially to blame as one reason people move to this desolate area, as they simply can’t afford to go elsewhere and Slab City provides a community of sorts. Tents, trailers, aging mobile homes and other ad hoc dwellings are dispersed over 600 acres and while US Postal Service won’t deliver, there is internet and cell phone service available. The LA Times points out:

“To the west is Niland (population 1,100) and the Salton Sea. To the east is the Coachella Canal (ripe with catfish) and the Chocolate Mountain Aerial Gunnery Range used by the Navy. During World War II, the Slab City site was Camp Dunlap, a Marine artillery training base. But ownership of the acreage passed to the state in the 1950s. Even when it had money, the state government never showed much interest in Slab City. A plan to sell the site to a San Diego developer in the 1990s fell through; so did an idea by Imperial County to turn it into an RV camping ground.”

Local law enforcement in Imperial County has indicated that the tent city doesn’t require much attention and that people who live in the region just want to be unencumbered by the trappings of modern life and make due with the little they have.

CBS News filed the following report:

Controller Announces He will Keep Pushing for Expanded Auditing Authority; $3 Billion in Findings

At any given point during the year, the State Controller’s Office is typically conducting 200 to 300 different audits, and local governments have been no stranger to these efforts and increased scrutiny. In fact, since taking office in 2007, the controller’s audit findings through State and local investigations have now totaled more than $3 billion, which is more than any other Controller in recorded State history.

State Controller John Chiang commented the following about the work of his office:

“Unchecked spending is an invitation for misspending. My audits offer an inside-look at state and local checkbooks, and show us where fiscal practices need serious improvement. These findings can lead to real taxpayer savings, and every dollar rescued is one that we don’t have to take away from education, public safety, or other essential services.”

Prominent audit findings at the local level and beyond include:

Bell: Illegal Property Taxes and Unlawful Spending
Hercules: Currently being audited
Montebello: No-bid contracts and lax spending controls
You can find a list of the Controller’s audits of state and local agencies here.
Revenue Audits can be seen here.
Oversight of Independent Auditor Findings of Education and Local Government Agencies: see here.
More here.

Notably, the controller used the announcement about his overall audit findings to note that he would continue to push for expanded authority. Chiang’s press release states the following: “The Controller's office was flooded with requests audits of more than 200 local governments across California. In order to meet those demands and better protect taxpayer dollars at the local level, the Controller introduced legislation to broaden his office's auditing abilities. While those bills stalled in the last legislation session, the Controller will continue to push to expand his office's ability to protect taxpayer dollars through financial audits.”

Reshaping Local Politics: Redistricting Commission Chairman Yao to Speak at LA Division Event

Still trying to get your head around the political implications of redistricting? Then join the Los Angeles Division of the League of CA Cities for an informative event featuring guest speakers from the California Redistricting Commission. Specifically, Chairman Peter Yao and Commissioner Jeanne Raya will join the Division on January 5th to share their views and first-hand accounts of how the redistricting process will shape local and state politics now and in the years to come. This will be the Division's first meeting of 2012.

Interested in attending? Then register now. You can do so here. For more information, contact Robb at robb@lacities.org.

Speaking of redistricting, nearly 4 million Californians will be without representation in the Senate thanks to a quirky byproduct of redistricting and the Senate's election schedule. While these residents will lack a senator in 2013 and 2014, many areas will have double representation. In response, the OC Register reports that Paul Glaab, mayor of Laguna Niguel, commented the following: “To me, that's an anomaly that probably should be corrected.” Mayor Glabb’s city will be affected by the lack of representation. For more on the issue, see here.

Financial Drain: Increase in Vacant Properties and the Costs to Local Government

The number of vacant properties in the United States has increased dramatically in the past 10 years, which has left local governments with considerable costs. In fact, many states have experienced a 70 percent increase in the number of vacant properties to deal with; additionally, there were over 10 million such properties by April of 2010. American City & County points out that “In 2010, government-sponsored enterprises reimbursed servicers or vendors more than $953 million for property maintenance costs, but local governments are bearing a considerable amount of the expense, as well.”

The Government Accountability Office (GAO) has released a new report on the impact of vacancies and while federal dollars have helped local officials cover some of the costs, many have still spent millions of dollars maintaining or demolishing properties. The report states the following about feedback from locals in determining accurate figures:

“Local government officials and community group representatives told us that distinguishing among different types of vacant properties is important to be able to identify the number of properties that are likely to impose costs on the community. As we noted above, the Census vacancy status categories can be useful in identifying some vacant properties, such as those in the “other vacant” category, that may be more likely to be unattended and so might burden local governments as opposed to those that are likely to be maintained, such as those that are for seasonal use.”

You can read the full GAO report here and the graph below provides a picture of how vacancies have risen in the past 10 years:

Past the 60-Mark: Cities of Lynwood and Irvine Join Strong Cities, Strong State Campaign

The “Strong Cities, Strong State” campaign now has over 60 cities in its ranks! Coming in at number 60 is the city of Lynwood. Incorporated in 1921, Lynwood has kept its mission to build and maintain a safe, self-sufficient, and pride-filled community that provides access to recreational, educational, and economical opportunities to residents and businesses alike. Significant developments over the last five years include a fight against obesity with the Cash for Chunkers weight loss program, improved safety through our advanced surveillance and protection devices, quick access to public documents using the online records search engine called Mydocspot, delivering recreational opportunities with the completion of the water-efficient Yvonne Burke – John D. Ham Park, and winning the highly praised All-America City Award. Success Stories include:

• Cash for Chunkers: In 2009, the Lynwood City Council directed staff to develop a program to help fight obesity with the purpose of improving the health and lifestyle of its community called “Cash for Chunkers”. The weight loss program encourages the entire community to exercise and live more active lifestyles.
• MyDocSpot: In 2007, the Lynwood City Council directed staff to produce an electronic document management system that allowed the community to search, view, and download documents via the internet.
• All-America City Winner: In 2010, the City of Lynwood was one of ten cities nationwide to receive an All-America City Award. The National Civic League announced the winners of the 61st annual All-America City Award during a ceremony at the Hyatt Regency Crown Center in Kansas City, MO.

Read more, see photos, and connect with the city here.

Next up is the city of Irvine. As one of the nation’s largest master-planned communities, Irvine is a culturally diverse and fully integrated city of 219,000 residents encompassing approximately 66 square miles in the heart of Orange County, California. Irvine was ranked as the top city in California on Money Magazine’s July 2010 list of Best Places to Live in America based on housing, finance and quality of life characteristics. Incorporated in 1971, Irvine has strategically grown into one of the safest cities in the country, promoting environmental stewardship, state-of-the-art transportation programs and systems, an enterprising business environment, stellar educational institutions and a high quality of life. Irvine features more than 16,000 acres of parks, sports fields and dedicated open space. Irvine is home to the Orange County Great Park. Success stories include:

• Business-Friendly Philosophy: The Irvine City Council considers economic development not only a program, but a philosophy of flexibility, problem-solving and responsiveness. The City is home to 197,000 jobs and more than 18,000 businesses, including the headquarters of major companies such as Allergan and Edwards Lifesciences.
• Support of Public Education: The City of Irvine financially supports its public schools. More than $5 million annually is provided to the City’s main public K-12 school district, Irvine Unified.
• Permanent Open Space: The City of Irvine’s 66 square miles are all within the historic Irvine Ranch land. The City’s lineage dates back to the 1860s when James Irvine became part owner of what would eventually become the Irvine Ranch, a vast expanse of open space devoted to sheep grazing and field crops.

Read more, see photos, and connect with the city here.

Pulling the Trigger: Guv Announces Cuts and New Revenue Forecast; $980 Million in Cuts

The fate of the much-maligned trigger cuts was announced by Governor Brown and state finance officials when they released an updated version of the state’s revenue forecast Tuesday. While many programs and services will be impacted, the direct impact to local governments will mostly be felt with respect to library funding and counties will be charged more for housing offenders. Outlining the options before the state, Brown commented, “You either cut or you tax. There’s no other way.” While there were fears that K-12 schools would face major cuts, in fact the reductions slated for education will be far less than anticipated and instead higher education and child care will be among the components that will have slashed funds. According to the Department of Finance, the state’s revenues are $2.2 billion below projections. Cutting to the chase, the state will impose $980 million in mid-year trigger cuts.

You can watch Governor Brown’s press conference on the budget here.

Notably, the figures presented by the Department of Finance were far rosier than the estimates of the Legislative Analyst’s Office, as the LAO stated California would fall $3.7 billion short on revenues and that far more would have to be cut January 1st. However, state officials have pointed to strong November sales taxes and higher revenues as factors that have softened the blow on the trigger cuts. The Department of Finance’s report on the revenue forecast states the following:

• "Personal income tax revenues are estimated to be $1.529 billion higher. High-income wages and salaries were stronger in 2011 and 2012 than previously estimated.  Proprietor’s income is also estimated to be higher.  However, capital gains are mixed: estimated to be slightly lower in 2011 and slightly higher in 2012;
• Sales tax revenues are estimated to be $232 million lower, primarily due to the result of the delay in implementation of use tax collection changes, a lower projection of inflation, and a higher projection of unemployment; and,
• Corporation tax revenues are estimated to be $467 million higher, primarily because of a higher corporate profits forecast.
• This net increase in the state’s biggest three tax sources was insufficient to fully offset the $4 billion in unallocated revenues described above"

 Outlined below are some of the cuts that will take effect in 2012:

• $100 million to the University of California.
• $100 million to California State University.
• $100 million to developmental services.
• $100 million to In-Home Supportive Services.
• $72 million in increased charges to counties for young offenders sent to state prison.
• $30 million to Community Colleges.
• $23 million to child care programs.
• $16 million to local libraries.
• $60 million miscellaneous.

You can read the full report here. For those hoping that the Legislature will rally around a last-minute effort to prevent the trigger cuts, relying on the abilities or efficacy of Sacramento is sure to end in disappointment.