The year before Garcetti ascended from council president to mayor in 2013, the city adopted a new retirement tier for civilian employees hired after July 1, 2013 that lowered maximum pension benefits to 75 percent from 100 percent of final compensation. It also limits retiree health care to the employee, excluding dependents. Projected savings over a 30-year period are expected to be $4 billion, with the majority of savings in out years.

 

Strides made by the city include significant progress toward reducing fixed cost burdens for pension and other post-employment benefits such as retiree health care, according to a Moody’s Investors Service report in December.

 

The rating agency affirmed the city’s Aa2 general obligation bond rating in November and upgraded the city’s outstanding real property and lease-backed debt ratings to A1 and A2 from A2 and A3, respectively.

The 2015-16 spending plan estimates that pension and other retirement benefit costs will be $1.077 billion — just under 13 percent of the city’s total spending. That’s a vast increase over pension costs from 15 years ago. But the rise has stabilized, and Santana told reporters that the pension fund for city firefighters would be 92 percent funded by 2020 — a far better figure than in most California cities.

Unions counted on to make concessions

But there are reasons to wonder if the sunny speeches Garcetti has been giving about Los Angeles City Hall’s future are too optimistic. The first is that the city budget will balance in the fiscal year starting July 1 only if Garcetti and Santana win new concessions from public employee unions. The spending plan “assumes that about 20,000 city workers will agree to no raises and many will pay a bigger percentage of their health care costs, but talks with city employee unions have dragged on since their contracts expired last year,” the Daily News reported.

This will be tough to swallow for non public-safety unions, given that police won a four-year, 8.2 percent raise this spring, and given the United Teachers Los Angeles’ success in securing a 10 percent, two-year raise from the Los Angeles Unified School District in April.

The second, much bigger problem is downbeat expectations for the city’s private-sector economy. Garcetti and other city leaders are counting on the local economy to finally begin a strong recovery at a time when pessimism in elite circles has never been higher.

The Los Angeles 2020 Commission, consisting of powerful figures from in and out of government, issued a report in December 2013 that warned of chronic stagnation without sweeping changes:

As the result of two decades of slow job growth and stagnant wages, 28 percent of working Angelenos earn poverty pay. If you add those out of work, almost 40 percent of our community lives in what only can be called misery. The poverty rate in Los Angeles is higher than any other major American city. Median income in Los Angeles is lower than it was in 2007.

 

When it comes to job creation, Los Angeles has not kept pace with the nation or other cities. Our unemployment rate is among the highest for any major city. This is not just a consequence of the Great Recession. We have lagged behind in each of the three business cycles since 1990. Los Angeles is the only one of the seven major metropolitan areas in the country to show a net decline in non-farm job employment over the last decade.

 

Activity in most of our key economic sectors is flat or in decline. We have repeatedly ignored or fumbled opportunities in one of this era’s major growth industries, the intersection of science and engineering — a field where our university-based intellectual capital ought to make us a leader. With the closure of Boeing’s plant in ‡Long Beach, there is no longer a large-scale aircraft, space vehicle fabrication or assembly facility left in the area.

Only key policy change: Much higher minimum wage

Garcetti and other leaders welcomed the report and acknowledged the challenges facing the city’s private sector. But the most significant major policy change since the report’s issuance came just this week, when the City Council approved increasing the minimum wage within city borders to $15 an hour by 2020.

The sharp increase was opposed by business interests, who warned it would make the city’s business climate even worse.

By Wayne Lusvardi

LOS ANGELES — Most people admit that they don’t know much about California’s water system or local tiered water rates. Except that when they turn on the spigot at their home the water pours out.

But what if you learned that when you turned on the spigot, a park for the “Occupy Los Angeles” movement poured out?

That is what I recently learned during reporting for jury duty at the Clara Shortridge Foltz Criminal Justice Center in downtown Los Angeles, located across from the L.A. City Hall.  When I bought some food at the courthouse cafeteria for lunch, I found all the tables in the lunchroom were “occupied.”

So I looked out the window and saw this inviting brand new park with newly painted pink benches, brand new grass turf, meandering concrete walkways, and succulent gardens.  I thought that I could eat lunch there in the open air and get my daily dose of vitamin D from sunlight as well.

But once I approached this well-groomed park, it was fenced and screened off on all sides.  It then dawned on me that this was the “Occupy LA” park, which was “occupied” for two months by those symbolically protesting economic inequality supposedly resulting from the Mortgage Meltdown and Bank Panic of 2008 and its aftermath.

Reportedly, the protesters lived in tents on the lawn and erected a makeshift food dispensary and first aid tent.  They were said to also have built a tent library, which was curiously within walking distance of the downtown Central Library.  To my knowledge, where the funding for all this came from has not been disclosed.  My guess is that it came from labor unions that stood to benefit from the eventual reconstruction of the park.

The encampment ruined the grass, broke automated water sprinklers, and became what real estate appraisers call an “attractive nuisance.”  I still could see signs of the ruination on the edges of the park of dried up plants from no watering and broken concrete landscaping.

I looked on the Internet and found that this park was recently restored and “re-opened.”  But it was inaccessible to the public or even to jurors who were serving in the adjacent courthouse.

The Inaccessible “Occupy Park to Nowhere”

It was the new symbol of government and economic stimulus programs: the figurative “park to nowhere” — just like the “bullet train to nowhere,” the “bridge to nowhere,” the “airport to nowhere,” and “the Solyndra solar panel manufacturing company that ended up “nowhere.”

They were all emblematic of the new welfare state: lavishly funded with no or few public benefits.  Unlike the public works projects of the 1930’s Great Depression, the present-day Managed Depression provided no social dividends: no needed new roadways, no concrete channels to reduce flooding hazards, and no new dams or canals to provide water and hydropower for new communities and industries.

These new public works were empty-headed, useless public works solely meant to provide jobs mainly to public-employee union workers.  The taxpaying public now worked for the unions and not the other way around.  And allowing the “Occupiers” to destroy the previous park was an excuse for yet more expensive but useless public works projects and contrived jobs programs.

Park Restoration Funded by “Waterless” Water Bonds

But where did the City of Los Angeles get the reported $1 million to fund the restoration of the park?  Ironically, the park improvements were partly funded with monies from Proposition 84, the $5.39 billion Bonds for Clean Water, Flood Control, State and Local Park Improvements Act of 2006.

Prop. 84 was one of five water bonds passed by voters since the year 2000, totaling $15 billion.  These so-called “waterless” water bonds produced no new water sources, dams, reservoirs or water conveyance facilities in a state that is in perpetual “drought” due to the shift to water conservation instead of building of new water works.

With interest, the bonds would cost taxpayers about $20.8 billion. And the repayment of the principal and interest on the bonds would total about $1 billion per year out of the state’s $90 billion annual operating budget.  That would be $1 billion that could not go to public schools, needy Medi-Cal patients, or to pay off the huge Federal loan for state unemployment benefits.

Public employee unions came first.  Everyone else would have to wait in line or find that whatever funding they needed from government was already “occupied” by unions.

The bond funding was justified on the basis that drought-tolerant vegetation was included in the park to reduce water usage.

The day I went outside from the court building to find a place to eat lunch I saw union workers massed on the step of the Los Angeles City Hall with a lunch time rally.  Clad in their distinctive yellow shirts and shouting “Obama” slogans from bullhorns, they made their presence known in the public square.

The next time you turn a spigot on at your home be aware of the trampled taxpayer for whom there is no funding to reclaim the public parks for public use.