Fight Brewing Between Council and Mayor Over Street Furniture Funds

3_9_10_happy.jpgHappier times: Villaraigosa and Cardenas. Photo: Experience L.A./Flickr

With all the bleak news about the City of Los Angeles’ budget woes, and the ridiculously poor state of the same city’s Transit Oriented Development program; the last thing one might expect to hear out of city hall is a fight over how the city spends its "Street Furniture Revenue Fund."  Yesterday, when Mayor Antonio Villaraigosa announced a veto of Councilman Tony Cardenas’ request to use street furniture funds to pay for his office staff, that’s exactly what we got.

First, some background.  The city collects revenue from the advertising on bus shelters within city limits and those funds are to be spent on, in the Mayor’s words, "…transit-related projects, sidewalk repair and other community beautification projects."  Fourteen of the fifteen City Council members use their local funds for just that purpose.  However, Cardenas requested, and the City Council approved a transfer of those funds to pay for two staff people, who Cardenas says work on local transportation issues.

In total, Cardenas sought to move $142,000 from the Street Furniture Revenue Fund to his district office funds.  KPCC reports that only $38,000 of that is under any mayoral control, so the veto only applies to to that amount.

Yesterday, in a strongly worded letter to the Council, Villaraigosa vetoed the request, and in a strongly worded letter to the City Council basically dared them to challenge the veto given the public’s mood concerning the city’s spending habits.  Meanwhile, the City’s legislative analysts are pondering whether the Mayor has the authority to veto this transfer as these are Council controlled funds.

I’m of two minds about the Mayor’s political maneuvering.  First, it’s always nice to see someone stick up for funds that are meant to beutify and improve the ugly and failing streets that make up too much of Los Angeles.  On the other hand, it’s disappointing that the Mayor didn’t take a stronger stand that those funds need to be used to for that purpose.  Instead, he urged that the funds be sent to fill the yawning chasm that is the city’s General Revenue Fund.

And let’s be clear, $38,000 isn’t going to fix any of the major problems associated with the city’s Transit Oriented Development plans.  Streetsblog has written before about how the city’s minimum parking requirements undercut the claim of any development actually being "transit oriented" and instead make buildings that ought to be full of transit riders be merely "transit adjacent."  Today at Soap Box, Stephen Box destroyed Metro’s real estate department and the disgusting state of bike parking at the new "transit oriented" W Hotel in Hollywood.  Most damningly, this week’s edition of L.A. Weekly goes into great depth about how the "Transit Oriented" developments in the city’s urban core were located too near freeways and are literally killing the children that live there.

In that environment, Cardenas gambit provided the opportunity for Villaraigosa to make a strong statement about the state of transit oriented development in Los Angeles, and instead of hitting it out of the park he barely made it to first base.  You can read the entire text of the Mayor’s veto message below:

March 8, 2010

Honorable Members of the Los Angeles City Council
c/o City Clerk
Room 395, City Hall

RE: VETO.  COUNCIL FILE NO. 10-0011-S7:  FUNDING FOR TRANSIT-RELATED
PROJECTS, COUNCIL DISTRICT 6

Honorable Members:

On February 9, 2010, in dialogue with the full City Council, I urged
members to partner with me in strengthening the City’s financial
position by, among other measures, moving uncommitted, discretionary
“Council controlled” funds to the Reserve Fund.

With rating agency downgrades looming, I subsequently submitted a
letter to Council President Garcetti on February 12, 2010, reiterating
my urgent request to strengthen the Reserve Fund by infusing it with the
“Council controlled” special fund cash balances. In that letter, I
also unequivocally stated that I would veto any proposal to transfer
special “Council controlled” funds into members’ salary accounts,
as follows:

One of the most critical actions we can take to ensure fiscal health is
to fortify the City’s Reserve Fund – which is in danger of being
totally depleted absent swift action to replenish it.  An inadequate
Reserve Fund is the single greatest immediate threat to the City’s
solvency.  It could trigger severe downgrades by credit rating agencies,
which makes borrowing more expensive or in some cases impossible, which
could in turn lead to an inability to meet cash flow needs.

As part of my plan to strengthen the Reserve Fund, I specifically
requested that you move uncommitted discretionary “Council
controlled” funds – currently totaling up to $40 million – into the
City’s Reserve Fund until such time that the fund reaches 5% of the
overall budget.

It has come to my attention that following my news conference on
Thursday of last week, a number of Council members submitted motions
seeking the transfer of funds from these special “Council
controlled” funds to the respective members’ salary accounts…

Given the City’s dire financial situation, and the immediate need to
fortify the City’s Reserve Fund, I have no choice but to veto any
proposal to transfer special “Council-controlled” funds into Council
members’ salary accounts.

Each of the above-referenced motions, with the exception of the council
file in question, was either withdrawn or amended to direct the funds
toward their originally intended purposes.

The Street Furniture Revenue Fund is intended to fund transit-related
projects, sidewalk repair and other community beautification projects.
It is not intended to augment elected officials’ staff salary
accounts.  And as I have repeatedly stated, given the severity of the
financial crisis we face, uncommitted discretionary funds should be
directed to the Reserve Fund.

The subject motion’s attempt to misuse the Street Furniture Revenue
Fund by augmenting the general salary account of Council District Six is
fiscally imprudent, and is hereby VETOED.

As your Honorable Body considers my veto of this Council File, I
respectfully request that you consider the following:

First, you should consider whether a prolonged, controversial and very
public debate over a possible override of this veto is worth the
Council’s valuable time – particularly given the enormous amount of
work before us as we attempt to balance this Fiscal Year’s budget and
prepare to close next Fiscal Year’s $485 million deficit.

Second, you should carefully consider the message a Council override of
this veto would send to the national credit rating agencies.  The
City’s most recent downgrade by Standard & Poor’s and negative
outlook by Moody’s Investor Service each referenced their respective
fears that the Council appears unable to make the necessary decisions to
balance the budget and strengthen our financial position.  An override
of this veto would confirm those fears.

As you know, further downgrades by credit rating agencies will make
routine borrowing more expensive or in some cases impossible, and could
seriously jeopardize our ability to meet cash flow needs.

Please consider these potential consequences as you deliberate the veto
of this Council File.

Very Truly Yours,

ANTONIO R. VILLARAIGOSA
Mayor

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