Backers of a four-year campaign to gain cityhood status for unincorporated East Los Angeles were left in limbo Wednesday, when the Los Angeles Local Agency Formation Commission (LA LAFCO) voted in favor of closing public participation and tabling the matter for two weeks.
Lea esta nota EN ESPAÑOL: El Esfuerzo de Incorporar el Este de Los Ángeles se Queda en el Limbo 
Related: VIDEO: East LA Cityhood In Limbo 
The 9-member commission voted unanimously to approve LA County Supervisor Zev Yaroslavsky motion to table the issue until LAFCO’s Feb. 8 meeting.
However, before the meeting ended, Supervisor Gloria Molina, in whose district East Los Angeles is located, and who until yesterday had remained publicly neutral on cityhood, said East LA’s finances cannot be denied. A new fiscal analysis will not be done, she said.
“Nothing in those numbers can possibly change, interpretations will always be made… One thing is clear, that is unfortunate, the numbers tell us clearly you can do it, but understand you are going to pay more for less. That’s what the numbers tell us,” Molina said eliciting applause from cityhood opponents, and boos from at least one incorporation supporter.
The postponement decision came after four hours of passionate testimony by both supporters and opponents of incorporation.
Business owner Yolanda Duarte, a member of the recently formed Save East LA Coalition (SELAC), said Molina’s comments were the “elephant in the room” — a $20 million deficit for the first year of cityhood and $7 million thereafter with fewer services.
Duarte and other business owners, who greatly outnumbered cityhood supporters in attendance, were unhappy with the postponment decision.
“It’s a travesty! I think any vote other than ‘no’ is an immoral vote. I think they know they are bearing us, I think the burden will be on them, I hope they can sleep at night,” Duarte told EGP.
Cityhood’s biggest supporter, the East Los Angeles Residents Association (ELARA) was also unsatisfied with the postponement, and Molina’s comments.
Molina has made it clear “where she stands on the issue,” ELARA President Benjamin Cardenas said.
“I’m obviously disappointed. I wish she supported the effort to, at a minimum, give everybody the right to vote…” Cardenas told EGP following the meeting.
“It’s unfortunate that they didn’t approve the negative declaration and direct their staff to come up with a blue print” [for making cityhood possible].
“But regardless of where they stand … Who does it hurt to make East LA economically viable? It doesn’t hurt anyone, but they don’t want to be charged with the task to do that,” Cardenas said angrily. He said it should be up to the county to put together a workable budget for East LA, and not them as was suggested during the meeting.
Incorporation of the 7.4 miles area bounded by the cities of Los Angeles, Commerce, Montebello and Monterey Park, and home to approximately 126,000 residents, most of them Latino, would make East Los Angeles the 10th largest city in LA County.
LA LAFCO’s executive officer recommended that the commission reject the incorporation request on the grounds that financial studies concluded East Los Angeles does not have “sufficient revenues to provide public services and facilities and a reasonable reserve during the first three years of incorporation,” as required by state law.
“East Los Angeles does not generate enough revenue to sustain a healthy and financially sound city,” wrote Paul Novak in his Executive Officer’s Report.
ELARA raised nearly $200,000 to pay for a fiscal study and audit to determine if the area could sustain itself financially should it become a city. They have repeatedly questioned the results of the study and a financial review, and say the reports authors failed to compare costs for the same services in other cities of the same size. Those cities are able to negotiate fees for service, prioritize spending and find other sources of revenues, ELARA says.
However, it is those studies that could prove to be the undoing of their cityhood crusade.
While a 2007 Initial Fiscal Analysis paid for by ELARA showed the area to have sufficient financial resources to pay for municipal services, a subsequent study, the Comprehensive Fiscal Analysis, which examined the area’s revenue and costs to the county during 2009, concluded that the proposed city of East LA would have a deficit of $19 million in the first year, and between $12 million and nearly $19 million in each of the next nine years. A State Controller’s audit of the same data found the proposed city is even less viable after it included $10 million more in law enforcement costs than found in the CFA.
ELARA hopes the commission will give their proposed cost-saving options serious consideration before ending their quest for cityhood. ELARA’s proposals include cutting the city’s transition year from 12 months to 7; renegotiating law enforcement, parks and library costs; implementing a solid waste fee and, possibly increasing the utility user tax. Wednesday they offered a new consideration, exploring if East LA would be eligible to benefit from Vernon’s “community benefit account” established last year as an effort to avoid disincorporation.
In the days leading up to yesterday’s LAFCO meeting, ELARA used email and social media to ask supporters to sign letters of support and attend the meeting. “Please take action now to let LAFCO know that we deserve more time to get real answers for our community,” ELARA wrote on their website and in email blasts.
Opponents also stepped up their efforts to defeat the incorporation effort. They contend the area cannot sustain the current level of services and have cited concerns of increased burdens on small businesses, fear of an increase in crime and concern that a local city council would be corrupt “like in the City of Bell.”
Some members of the business community, like the East LA Chamber of Commerce, have repeatedly highlighted the fact that East LA has a large number of small, mom-and-pop businesses, unlike neighboring cities that have large revenue generating resources like the casinos in Commerce and Bell Gardens, or the shopping mall in Montebello.
Nearly half of unincorporated East LA’s revenue comes from property taxes, according to the CFA.
Three previous incorporation attempts —1961, 1963 and 1974 — failed. In 1961 and 1975, a majority of residents voted against incorporation.
At the Feb. 8 meeting, the commission could disapprove the requested incorporation as recommended by LAFCO staff or grant ELARA a continuance of the hearing to further explore feasibility. It is still possible, though many believe it unlikely, that they could approve the incorporation request and direct staff to come up with a plan to make cityhood financially viable in accordance with state law.
If the commission rejects the proposal for incorporation and ends the effort, proponents can submit another proposal after one year.