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Budget

Mayor Villaraigosa's Plan to Borrow $50 Million on Commercial Paper Dumped, Neighborhood Councils On Axing Block, What Else? JUST IN

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Tue, May 17, 2011 at 6:32 PM

click to enlarge KYLE T. WEBSTER
  • Kyle T. Webster
Less than 60 minutes ago Jay Handal received a "courtesy call." Handal chairs a committee for the 93 neighborhood councils called the Neighborhood Council Budget Advocates.

"Basically they are gutting and shutting down the neighborhood council system," Handal says.

L.A. Mayor Antonio Villaraigosa's plan to borrow $50 million on commercial paper was heavily criticized -- and now, at the last minute -- thrown out. His 2011-12 City budget proposal that will go before the City Council tomorrow will now need to account for this gaping $50 million hole:

"Because they wanted to go out and borrow on commercial paper [an unsecured, short-term debt instrument]," Handal says. "And there was a lot of resistance to that as being a really bad idea. So that fact that that really was a really bad idea got to somebody and they figured out: 'Boy, that really is a bad idea.'"

But now who will pay for this last minute change of plans? Handal's "heads up" from the mayor's office warned him that the neighborhood councils might be among those who will be axed. He sees it like this:

"An attempt by putting it out there that they are going to suspend all neighborhood council funding - this is an attempt to reduce us down to probably $10 - $12,000 [for each neighborhood council]. And make us feel better about it. I think what they are doing is they're coming in with the hardball, figuring, alright, we will have everybody all crazy and pissed off and then we'll satisfy them by giving them $10 grand for operating money."

Three years ago each neighborhood council received $50,000. Currently they get $45,000. They have been talking about cutting the $45,000 down to $40,000.

Until less than an hour ago, when the number fell to $0.

Whether the neighborhood councils are left with $10,000 to cover operating costs or not, the situation is more than alarming for Handal: "In turn I obviously started rallying the troops. To the point where my battery is dead and I'm at Radio Shack trying to get another battery for my cell phone."

The lack of transparency in the way City Hall uses money is the most frustrating part for Handal. The Neighborhood Council Budget Advocates have asked for both the mayor and City Council to publicly post information on what their "discretionary funds" are made up of and spent on.

"There is nothing by law that requires them to post it," Handal says, "But now, the fact that they are stripping us completely -- now more than ever, they should absolutely put [their discretionary funds info] online. How dare they take in millions of dollars each and not be subject to disclosure?"

Even if $5 million is taken from the neighborhood councils, that leaves $45 million that needs to come from other places.

UPDATE:

For further reading on the tangled and misleading Los Angeles City budget for 2011-12, please click here for "Los Angeles, Broke and Broken: City Council Clueless About Vast Hidden Costs in Villaraigosa's $6.9 Billion Budget."

And also click here to read:

What is up with Hollywood Councilman Eric Garcetti, who in 2010 pushed through those widely reviled closures of 73 libraries, yet looked the other way on major city spending and budget fat that never got cut in 2010? (And very likely won't get cut again in 2011.)

And please click here to read about City Councilman Dennis Zine, demanding that his 14 other L.A. City Council council colleagues get honest about those largely secret, annual payments amounting to $150 million going toward automatic, non-merit bonuses to thousands of city workers, exposed by Kerry Cavanuagh at the L.A. Daily News.

Contact Mars Melnicoff at marsmelnicoff@gmail.com / Follow @marsmelnicoff

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