Larry Frank, deputy mayor for neighborhood and community services,
answered questions after a presentation on the mayor's proposed budget.
(photo by Callie Schweitzer)

Nearly 500 members of Los Angeles' often embattled Neighborhood Councils got their first look this weekend at what the upcoming tight budget year might mean for them.
 
The session with Mayor Antonio Villaraigosa's budget and finance deputy, Ben Ceja, grew heated during the question-and-answer period as residents objected to the city's expanding deficit and potential cuts in services.

The special session on Saturday comes amid money worries, disorganization, embezzlement charges facing six Neighborhood Councils and unease within the 89-council system over its future.

When asked about the future of Neighborhood Councils, Ceja told Neon Tommy after the meeting: "Everything is in jeopardy. Every single dollar we spend is in jeopardy." He noted, however, that as part of the city charter, Neighborhood Councils could not be eliminated without a citywide vote.

Several members of the audience found Ceja's budget report incomplete. Jack Humphreville of the Greater Wilshire Neighborhood Council called the presentation "pure baloney."

"There are no facts and no figures," he said to applause. "When are you going to treat us like adults and not fools?"

Humphreville said the presentation failed to hone in on the actual deficit.

"They don't give any specifics as to what the deficit is for this year as well as next year," he said. "Where's all this money going to come from or not come from in order to solve the deficit? They give you selected numbers."

Earlier in the year, the city administrative officer projected a deficit of more than $800 million for fiscal year 2011, Ceja said. Estimates have since been revised--though not formally--to closer to $500 million because of reduced contributions for pensions as a result of lower than expected market losses, he said.

The session, "Shared Responsibility/Shared Sacrifice," was part of the "Empower LA: A Congress of Neighborhoods and Community Budget Day" sponsored by the Department of Neighborhood Empowerment, which oversees the Neighborhood Council system.

This is just the start of the budget review process. Ceja said Neighborhood Council members would have a chance to get involved at a regional review of budget priorities in February. In March, Neighborhood Council representatives will meet with the mayor.

Neighborhood Council members were currently working with the mayor's office to develop the budget survey, which solicits community feedback and will be available at the end of October, he said.

"Participation for the Neighborhood Councils has never been more urgent," Ceja said.

Ceja's powerpoint presentation outlined the adopted budget, issues and challenges facing the city, budget recalibration and cost-cutting measures and the budget process.

Audience members strenuously objected to the projected estimates for pension and retirement funding and the issue of pensions in general.  

To mitigate future pension cost increases, Ceja said the city plans to significantly reduce the workforce in part through its Early Retirement Incentive Program (ERIP), which aims to take 2,400 city service employees from the workforce as soon as possible and provide them with incentives in the form of retirement benefit enhancements and separation pay incentives. Ceja referred to this as a "layoff avoidance" tactic.

The city has already taken severe action on this front, invoking furloughs, layoffs and hiring freezes, and it will continue to do so, Ceja said.  

Neighborhood Council members say the cuts threaten public services.

"We're laying off people we need to pay for people who are gone," said Diann Corral, the finance and budget chair of the Mid-Town North Hollywood Neighborhood Council.

Shawn Simons, president of the North Area Neighborhood Development Council, said, "We're shackled to a sinking ship on this. It's pretty clear that early retirement is not going to solve this problem."

After the meeting, Humphreville said he'd nicknamed the early retirement program "E-RIP off."

"It's not going to work," he said. "It's just a raid on the pension fund. They're robbing tomorrow to pay for today."  

Sarah Ramsawack of the North Hollywood Neighborhood Council mentioned a Los Angeles Times article on embezzlement issues with certain councils. The more than $4 million budget for Neighborhood Councils, she said, is now "vulnerable" due to "six abuses of trust."

A follow-up story said police arrested James Tyrell Harris, a South L.A. community activist, last Thursday on suspicion of misappropriating $85,000 in city funds while serving as chairman of his neighborhood council.

Larry Frank, deputy mayor for neighborhood and community services, acknowledged the problem.

"We do have some mismanagement we have to fix," he said. "We really need vigilance from all of our Neighborhood Councils...Because of those problems, our entire system is being challenged."

"The mayor's office is committed to making sure you can do your work," he said.
 

After the session, about 30 people stayed in the Council Chambers to talk with Ceja and Frank or just chat among themselves.

Some questioned how responsive the mayor's office would be to public comments.

Paul Hatfield, treasurer of the Valley Village Neighborhood Council, said he didn't think anything the public said would be taken into account based on previous suggestions he made to the Department.  

Hatfield said that four or five times in the past two years he had offered to set up an Excel program for tracking and managing Neighborhood Council budgets. Amid embezzlement issues and disorganization, the city agency still has no electronic system for the budgets, he said.

Others compared notes on their level of training in the position of treasurer or budget manager.

Victor Viereck, a certified public accountant and treasurer of the Greater Valley Glen Neighborhood Council, said the Department has never contacted him or the council about standard protocol for reporting funds and money use.

Hatfield recommended outsourcing of the agency's financial management to certified public accountant firms.

Frank, who remained in the Council Chambers for nearly an hour after the session, made a list of issues to look into and spoke openly and freely with those who approached him.

He said he would not be bringing the day's issues to the mayor and instead would be using his 21-person staff to deal with action plans for the issues. "He can't handle everything," he said.

As far as how he will use the day's feedback, Ceja said the mayor "understands already the issues related to pensions," noting that he meets with the mayor once a week for budget issues.

Ceja said he was pleased with the day's discussion and did not feel at all attacked by the raised voices and criticism of the plan.

"A lot of people understand we are facing tremendous fiscal challenges," he said. "We don't have a crystal ball to see where we'll be two months from now."