East L.A. Cityhood Effort Closes In On Next Major Hurdle

An upcoming community meeting presented by proponents will respond to data in CFA: Final report out today.

By Gloria Angelina Castillo, EGP Staff Writer

The cityhood debate in East Los Angeles is heating up as residents become more informed and think about what they have to gain, or lose.

Read this story IN SPANISH: Propuesta Ciudad del Este de L.A. Se Acerca a Otro Obstáculo

City Terrace resident Carlos Leon supports the incorporation effort, and says he’s willing to pay more taxes for more access to locally elected officials and local accountability.

East L.A. resident Rebecca Luna, on the other hand, says the area can’t afford to become a city, and she doesn’t understand the proponent’s ‘agenda.’ Luna says tax increases would hurt local businesses and reducing public safety services would hurt everyone.

For Luna, any positive twist to the Draft CFA is a “smoke screen,” and she anticipates cityhood supporters will “spin the numbers” to look good.

But there are also residents like Arnulfo Delgado, who has spent 80 hours creating a video showing how, over the last several decades, portions of East L.A. have been gobbled up by local cities because they represent revenue generating resources.

Delgado notes that Los Angeles Councilman Tom LaBonge now wants the City of Los Angeles to annex the north side of the 10 freeway, which includes the Whiteside redevelopment area.

“Commerce was incorporated because of the threat of annexation from Downey,” he said. While East L.A.’s incorporation isn’t based on the same rationale, he said residents should be paying attention.

“Chicano pride is a part of the discussion about why we want to incorporate, but it’s more about how the government can help the people,” he told EGP.

The final version of the East Los Angeles Comprehensive Fiscal Analysis is scheduled to be released today to the public. It will include new information and data, in the form of public comments, submitted by last week’s deadline.

The comments submitted by the East Los Angeles Residents Association (ELARA)—the proponents of incorporating the new City of East Los Angeles who paid for the study—argue that cityhood is still possible and the deficit is not as large as the Draft CFA suggests.

The draft study with proposed and projected municipal costs shows the “City of East Los Angeles” would have an initial $17.6 million shortfall (including lost vehicle license fees due to recently enacted legislation, SB 89), while the County would have a $27 million gain. In order to close the deficit, the study’s consultants propose increasing the Utility Users Tax (UUT) from 4.5 percent to 10 percent and reducing the contract amount proposed by the LA County Sheriff’s Dept.

ELARA’s comments submitted to the Los Angeles Local Agency Formation Agency (LAFCO) argue that there is $20 million in unaccounted revenues that stem from a variety of areas including:

—$4 million in UTT plus another $2.5 million in franchise fees; based on comparison cities.
—$6.5 million in Community Development Block Grants, HUD and other grants, licenses and permits, and fees and charges.
—$3.5 million less in expenditures for Sheriff provided services.
—$750,00 in savings if the County continues to run Belvedere Park.
—$3 million in cost-savings measures at other parks and recreation centers.
—$45,000 savings if the city employs a part-time treasurer and part-time city clerk.

In their comments, received by EGP before the final CFA was made public, ELARA acknowledges tax increases will make it harder to win voters’ approval, should the measure be placed on the ballot.

“The CFA analysis was also predicated on a single base year of FY 09-10 at the end of the longest recession since the Great Depression … Most California cities made significant budget cuts and depleted reserves to weather the recession, and many newly incorporating new cities would be wrongly found infeasible if analyzed narrowly on such a base year,” ELARA wrote.
Still, many residents who are struggling financially may not find comfort in ELARA’s revised estimates.

The East L.A. Chamber of Commerce, one of the most ardent opponents to cityhood, says incorporation is not feasible because residents can’t afford to pay tax hikes and the community cannot tolerate cuts to public safety.

The Draft CFA calculated cutting Sheriff’s services by nearly a third, “for a community already widely known for gang violence and gangs, graffiti, unlicensed street vendors and illegal curb car sales, etc, this reduction by 30 percent would be very detrimental to the entire East L.A. business and residential community and would immediately be felt should it occur,” Torres wrote.

However, ELARA estimates that the Sheriff’s costs are overstated, noting that the average contract city pays $136 per capita, compared to the $166 per capita being proposed for East L.A.

The East L.A. Chamber “agrees” with the Draft CFA ‘s findings, but also questioned the lack of information on California Highway Patrol services. However, during the community presentations, (and on page 27 and 28 of the Draft CFA) CFA consultant Richard Berkson of Economic & Planning Systems Inc., said the Sheriffs’ contract with the new city would take-over the duties the CHP is currently providing on East L.A. streets.

Torres also notes that the County would gain financially if East L.A. were to become a city, and notes the state law on revenue neutrality: “There is no adverse impact on the County… East L.A. unincorporated is being ‘subsidize’ by the County to the tune of $27.3 Million …” Torres wrote.

ELARA also makes mention of the revenue neutrality aspect of incorporation and suggests the shortfall—which they estimate to actually be around $7 million—could be assumed by the County through Revenue Neutrality negotiations. Page 3 of the East L.A. CFA and page 1 of the Executive Summary, briefly mention revenue neutrality as a process where fiscal impacts can be mitigated.

Revenue Neutrality does not include LAFCO, the discussions would occur between ELARA and the County of Los Angeles, according to LAFCO Executive Director Paul Novak.

On Monday, Sept. 12, residents on both sides of the debate can ask questions and engage in dialogue about their vision for East Los Angeles. ELARA, in partnership with Assembly Majority Leader Charles Calderón, will host a community meeting on the CFA and incorporation effort at Garfield High School in the cafeteria at 6p.m.

On Sept. 14, the LAFCO commission is scheduled to take up the final CFA. Though not a full public hearing, residents will be allowed to speak on the issue.

“The meeting on September 14th is not the noticed public hearing required under State law. The purpose of the meeting is to announce the availability of the Public Hearing CFA, and start the State Controller Review request period, Novak told EGP by email. “The meeting date for the public hearing date has not been sent. The timing is dependent upon whether or not there are any requests for State Controller Review of the Public Hearing CFA (the period in which to request such review will end on October 17th, 2011). Once that is known LAFCO will issue a notice of the public hearing.”

The commission, using the study’s findings and stakeholder input, will eventually decide if Unincorporated East Los Angeles can afford to become a city. If they decide it can, their decision would go to County Supervisors to consider putting the question on the ballot. But should they decide the data does not support cityhood, they can stop the incorporation process, Novak previously told EGP.

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September 8, 2011  Copyright © 2012 Eastern Group Publications, Inc.


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