Ah, how typical of the L.A. City Council to hitch its trailer to a movement then, perhaps, back away when the thing has passed. We're thinking, of course, of the city's boycott of Arizona over its controversial immigration law, exceptions to which are too numerous to mention.
Last week the council wholeheartedly endorsed Occupy L.A. and vowed to cut ties with those demon Wall Street Banks that helped put us in this Great Recession.
Except that this week reports surfaced that the cost of cutting ties would be, well, unrealistic. City Chief Administrative Officer Miguel Santana wrote this to Mayor Antonio Villaraigosa Monday (PDF):
If Council instructs the CAO to stop doing business with its current LOC providers, the financial repercussions will be immense as the City could be forced to terminate the LOCs within 30 days and pay as much as $27.8 million in termination fees (one-time cost) and replacement costs.
Additionally, pulling out of said banks would require refinancing that would cost even more. Santana:
The refinancing will result in additional General Fund annual debt service costs of approximately $14.9 million over 30 years.
At a time when keeping staffing levels of the LAPD above water is a big issue at cash-strapped City Hall, that's a lot of money to appease the people on the lawn.
The city had already had a lawsuit against many of the same financial institutions, and what the council did last week was wrap its pro-Occupy measure in with what it was already essentially doing. Still, it will probably have to back off of its vow to cut ties.
Not only would that cost L.A., but Santana says it would also affect other city debt programs that cover ...
... Convention Center Renovation and Downtown Event Center Project and the Los Angeles Wastewater System Debt Program, but also affordable housing and economic development bond financings managed by COD and Housing.
That Convention Center "renovation" appears to include a proposed NFL stadium that the mayor and other city leaders are salivating over.
Stuff council people like.
The Los Angeles Times crunched the numbers today and stated an Occupy-inspired, big-bank pull out could cost taxpayers $58 million.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
That could turn Occupy's downtown Tent City into condos.
Of course, the council being the council, they kicked this issue down the road, as the Weekly's Simone Wilson noted -- to Nov. 21. That's just before Thanksgiving, when the weather is cooler and that lawn will likely be sparse.
Score one for the council. Look like you're down without actually having to be down. Classic.