By Jack Humphreville
Our new neighbor, Mayor Eric Garcetti, has had a relatively uneventful 150 days in office other than a successful dust up with union boss Brian d’Arcy over the International Brotherhood of Electrical Worker’s labor contract with our Dept. of Water and Power.
But there are storm clouds on the horizon that will adversely impact the city’s finances and our wallets.
Despite record revenues, Garcetti must eliminate next year’s projected $250 million budget deficit that is the result of ever-increasing salaries, benefits and pension contributions. At the same time, the city will commence negotiations with its unions, whose labor agreements expire on June 30. These campaign-funding unions that already have the City Council’s ear are expected to ask for significant raises for their already well-compensated members and resist any calls for employees to contribute to their Cadillac healthcare plans.
In January, DWP will be asking for increases in our water and power rates that far exceed the rate of inflation. These rate increases will fund the repair and maintenance of the Department’s neglected infrastructure and numerous environmental regulations, including meeting the state’s 2020 mandate that requires that 33 percent of our energy be from renewable resources.
But these rate increases will also fund very expensive projects that are being dumped on DWP by City Hall. They involve the Los Angeles River, the city’s Stormwater/Urban Runoff program, and a multi-billion solar plan that is not dissimilar to Measure B, the 2009 measure that was rejected by the voters.
Quite frankly, this is not a very nice way for Garcetti to treat the ratepayers who swung the election his way because of his promise to reform DWP.
The city is also considering a controversial $4.5 billion Street Repair Tax that will increase our property taxes by up to six percent ($250 million), but without a charter amendment that mandates that the city live within its means.
Garcetti also has the opportunity to be a bold leader by endorsing the Pension Reform Act of 2014 (ReformPensions2014.com), the ballot measure proposed by San Jose’s Democratic Mayor Chuck Reed. While this reform is opposed by the self-serving union leadership, the city’s projected pension contributions of $1.2 billion are expected to gobble up almost a quarter of the city’s budget.
With a $250 million budget deficit, contentious labor negotiations, unpopular DWP rate increases, massive new taxes, and controversial pension reform, the honeymoon is about to end.
Jack Humphreville is on the board of the Greater Wilshire Neighborhood Council, chair of the DWP Advocacy Committee and a budget advocate.