SECEDE—VOTE Stakes Claim to a Portion of City Assets

Los Angeles can hold on to its airport. And, it can keep its zoo and its beleaguered plans for expansion of its port system, thank you very much. These are just a few of the regional assets Valley secessionists will not be seeking some control over should a final separation agreement be approved by the majority of the voters here and across the city. But secessionists will be asking for their fair share of these investments and other city assets in their final application for separation, which is being handed over to the Los Angeles Agency Formation Commission (LAFCO) Tuesday. “We are recommending that certain regional assets be maintained by Los Angeles,” said Richard Close, chairman of Valley VOTE, the group spearheading the push for a breakup. But, Close said, the Valley is entitled to credit for its fair share of the value of those assets, which could dramatically reduce the subsidy Los Angeles says a new Valley city would have to pay for its independence. In March, LAFCO released the findings of a nearly year-long study on the feasibility of Valley secession, concluding that the area’s strong tax base would allow it to generate roughly $1 billion a year in revenue and could operate with a budget surplus. However, the study also concluded that the Valley would have to pay the city roughly $68 million a year to make the split “revenue neutral,” as required by state law. But, said Close, factor in the Valley’s entitlement to the city’s assets and that subsidy figure already being carefully scrutinized by Valley VOTE’s consultants could change significantly. Because details of the report have been embargoed until they are turned over to LAFCO on Tuesday, Close could not give the Business Journal a specific dollar value of the Valley’s portion of those assets. In fact, said Close, his group’s final application focuses on the overall plan for a breakup, not the details. Those, he said, will be left to consultants to tackle over the next few weeks. “We are in general agreement with the report,” said Close. “Primarily, we have tried to deal with concepts of implementation of the plan. We only had 45 days to do that, so we were looking at the big picture rather than focusing on the small details. But our consultants will be submitting questions as to how certain numbers and conclusions were arrived at.” Close also said potential revenue from assets, along with projected revenues to the city for instance, money expected to come to Los Angeles from a recent tobacco settlement are also likely to affect the numbers in the report. Valley VOTE is also requesting that residents of the new city continue to receive water and electrical power services from the Los Angeles Department of Water and Power at the same rates charged to customers who live south of Mulholland Drive. The initial findings of LAFCO’s report deemed DWP, along with other programs, such as 9-1-1 emergency services and the city’s complex computer systems, next to impossible to split up. Instead, the report suggests that a new city would likely be forced to “contract” out for those services, yet does not specify what the Valley ought to pay Los Angeles to do so. Close cautioned that those services would not be contracted out, but rather delivered to the Valley under costs and conditions set forth by LAFCO staff, which has the power to do so under state law. “Some people have incorrectly used the term ‘contract,’ and that is legally an incorrect term,” said Close. “That presumes that either side can say no.” And, that one side has power over the other a concept that would only serve to undermine secessionists’ self-sufficiency. The LAFCO report suggests that all city services, such as police, fire, trash pickup and animal regulation, would continue to be provided to the Valley for a fee during an eight-month transition period while the new city either sets up its own programs or decides to stick with what is already in place. “What we are proposing is that the transition periods be different for different services, because some may need more time than others to implement. Some of them may take a couple of years,” Close said. Valley VOTE is not, however, specifying a preference for contracting out for those services indefinitely or establishing its own services. “We believe these types of decisions should not be made by Valley VOTE,” Close said. Julie Butcher, general manager of the Service Employees International Union, Local 347, said a new Valley city would do well to keep ties with the union rather than do business with what she called “sleazy” independent companies. “Our union members, particularly in trash collection, are very proud of the service they provide,” Butcher said. “So we are worried that (a breakup) would cost people more. But the bigger picture is our union members do an excellent job, and I think people of the Valley would be less served by smaller services.” Butcher tiptoed around the union’s formal position on secession, but said members have been working to improve services in the Valley. “We have been struggling to help in the areas where people want to leave to show that we are stronger together as a whole,” she said. The union represents roughly 12,000 workers in Los Angeles and other cities who provide services ranging from garbage collection to traffic control. If voters were to approve secession, Valley VOTE’s application calls for a 60-day period between the November 2002 election and the date that a new Valley city council and mayor would assume their positions. “Once the effective day has come, all governmental decisions are made by the new mayor and city council,” Close said. Valley VOTE is also requesting that LAFCO begin the process now of establishing boundaries for 14 Valley city council districts, which would each have approximately 90,000 people. Established districts currently represent an average of about 240,000 people. The Los Angeles City Council now has 45 days to comment on the final application. However, it can only make recommendations, not changes. Then LAFCO must conduct a comprehensive fiscal analysis of the final report, which would be used as a draft for a ballot measure. That is expected to be completed in late August following what are likely to be several rounds of public hearings. Although LAFCO staff has the final say over whether the application is approved for a ballot measure, Close said the likelihood of the panel rejecting it is “2 percent or less” because they have already said it’s feasible. Close said his group expects a lot of criticism to come from the council and anti-secessionists, but insists that the focus should remain on doing what’s right for the residents of the Valley. “We are excited about the LAFCO report because it says that the Valley is extremely viable,” said Close. “But I think we need to keep focused on the real goal. Unlike a divorce where a couple fights over the plates and the silverware, this is over local control and focusing on making the Valley a better place to work and live and raise a family. And this report shows we meet all the legal tests for doing so.”