Author: William Nottingham

The Los Angeles Department of Water and Power accelerated its game of chicken with the City Council on Wednesday, saying it would indeed renege on a promise to provide $73 million to the cash-strapped city budget if a package of rate hikes is rejected.



DWP acting general manager Raman Raj told council members in a letter that if the rate hikes are not in place by March 31, the utility’s fiscal stability will be so adversely affected that it will not be in a position in this fiscal year to provide any additional money to the general fund, which pays for public safety, parks, libraries and other basic services.



Raj said the DWP’s credit rating depends on the influx of additional money that would come from rate hikes. But Councilman Greig Smith, who serves on the council’s Budget Committee, said he was not persuaded that the DWP’s numbers were as dire as its officials said.



“If they’re going to play hardball, we’ll play hardball,” he said.

City officials are already contemplating as many as 4,000 layoffs as they try to eliminate a $484-million shortfall expected on July 1. Losing $73 million could result in the elimination of more than 1,000 jobs.



Former DWP commission President Nick Patsaouras described Raj’s letter as “blackmail,” saying the council should be allowed to judge the proposed rate hikes on the merits.



Raj’s letter came two days after Mayor Antonio Villaraigosa issued his own policy statement warning that the city would run out of money by June 30 if the council rejects the DWP rate hikes, which range from 9% to 28% depending on where a household is located and how much it consumes. That warning – and his use of the word bankruptcy – drew denunciations from council members earlier this week.



The DWP typically provides more than $200 million per year to the city’s budget. This is the first year, however, that the payment was broken into two installments. DWP Interim General Manager S. David Freeman told The Times in February that he saw no connection between the transfer and the utility’s desire for a rate hike.



Councilman Bernard C. Parks said DWP officials never divulged that they were in such serious financial shape in previous appearances before the council.



— David Zahniser and Maeve Reston at Los Angeles City Hall

Facing resistance from the City Council over his renewable-energy plans, Los Angeles Mayor Antonio Villaraigosa has warned that any attempt to overturn higher electricity rates approved last week by the Department of Water and Power board would throw the city’s finances into disarray, causing it to run out of money in the next four months.

In a briefing paper sent to council members Monday night, Villaraigosa’s office said the DWP would renege on a promise to transfer $73 million to the city’s general fund budget if its rate proposal is rejected.

Such a move would cause the general fund, which pays for public safety, libraries and other basic services, to “run out of cash” before the end of the fiscal year on June 30, Villaraigosa’s briefing paper said.

“Council rejection of the DWP board’s action [to increase rates] would be the most immediate and direct route to bankruptcy the city could pursue,” the report said.

The council is scheduled to decide on Tuesday whether to conduct its own review of the DWP increase. Villaraigosa’s appointees on the DWP board voted last week to approve the first of four rate hikes between now and April 2011.

Once all four increases are in place, households across the city will see electricity cost increases ranging from 9% to 28%, depending on where they live and how much power they consume. Businesses would experience increases in their bills of 21% to 22%, according to the utility.

Councilman Herb Wesson criticized Villaraigosa for using the possibility of bankruptcy to build support for his plan for installing solar panels. “I don’t think you hold people hostage that way,” he said.

The DWP was scheduled to provide at least $220 million to the general fund for the 2009-10 fiscal year. So far, however, the utility has sent only a portion of that money.

Last week, DWP Interim General Manager S. David Freeman warned that the utility would think twice about sending the rest of the money to the city’s budget accounts if the rate hikes are rejected. At the same time, Freeman said that if the hikes were approved, his agency would come up with an extra $20 million in budget contributions by reducing its travel costs and other expenditures.

Once all of the rate hikes are in place, the city budget would see an additional $38.4 million per year, the mayor’s office said.

Without the planned increases, the general fund would lose out on $93 million and have trouble paying its bills, Villaraigosa warned council members.

“Failure to meet basic obligations would send the city into a financial tailspin, leading to further downgrades and an inability to borrow to meet future financial obligations,” his report said.

— David Zahniser at Los Angeles City Hall

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Los Angeles Mayor Antonio Villaraigosa on Monday signed a measure to cut business taxes for Internet-based firms, many of which last year saw their tax rate jump from the lowest in the city to the highest.

The change, unanimously approved by the City Council on March 5, will affect an estimated 1,400 businesses in Los Angeles.

Some of those companies had threatened to move out of the city if the tax rate was not reduced. Villaraigosa signed the ordinance at the Westside Internet firm Shopzilla, one of the companies that had considered relocating.

The city’s Office of Finance last year started to reclassify Internet-based firms into a higher business tax bracket. Until then, Internet companies were considered to be “multimedia” businesses and subject to a tax rate of $1.01 per $1,000 of gross receipts. Under the new classification, they were placed in the “business and professions” category, which has a tax rate of $5.07 per $1,000 of gross receipts.

Under the measure signed Monday, the city will create new tax classifications for Internet companies that will be subject to the same rate as multimedia firms, the lowest rate. The reduction will be retroactive to Jan. 1.

During the council debate over the measure, some members expressed concern about making the rate change retroactive, saying it would cost the city $3.4 million in revenue at a time when the city faces a $212-million shortfall.

— Phil Willon at Los Angeles City Hall

Photo: Los Angeles Mayor Antonio Villaraigosa, seen in February, signed a measure Monday to cut business taxes for Internet-based firms. Credit: Damian Dovarganes / Associated Press

Hundreds of California street, bikeway, traffic signal and other local transportation projects partly funded with federal stimulus money have been compiled in a new list released by the state.

 

Want to know what projects are being funded near you? Enter a city in the search field at the top of the Caltrans database here.



In all, $2.5 billion in stimulus money has been funneled into contracts for such things as pedestrian and street-scape upgrades along Pier Avenue in Hermosa Beach and new left-turn lights in West Covina.



Los Angeles will spend several million dollars for pedestrian and bikeway improvements along the L.A. River and elsewhere. An additional $456 million in federal stimulus funds are expected to be awarded in contracts statewide by next month.

 

The infusion of funds is part of an ongoing effort “to create jobs and jump-start the economy” through infrastructure investment, said Gov. Arnold Schwarzenegger.



— Rich Connell

Los Angeles Mayor Antonio Villaraigosa’s appointees at the Department of Water and Power took the first step Thursday toward imposing electric rate increases of up to 28%, despite complaints from neighborhood activists and business groups.



On a 4-0 vote, the board agreed to increase the cost of electricity by 0.8 cents per kilowatt hour, the first of four increases planned over the next year to help the nation’s largest municipal utility cover its financial commitments and continue Villaraigosa’s plan for securing more renewable power.



DWP commission President Lee Kanon Alpert said he feared that inaction would be greeted unfavorably by leaders of Wall Street agencies, who could respond to a ‘no’ vote by reducing the utility’s bond rating. Such a move would add $70 million to $80 million each year to the agency’s borrowing costs, DWP officials said.



“What’s very striking to me is the risk and potential of harm that will come to this department and our ratepayers if we do not approve this,” he said.



The City Council must now decide whether it wants to conduct its own review of the proposal, which would otherwise take effect. Council members Eric Garcetti, Jan Perry and Dennis Zine said they want to do so.


Backers of the plan called it a major step away from coal power, which makes up 44% of the DWP’s energy portfolio. Coal has been less expensive but is a huge polluter. Opponents said the increases would hurt businesses and families already hard hit by the recession.



“You will have businesses that will not be able to afford it, and you will have employees that will lose their jobs,” Larry Rauch, president of Los Angeles Cold Storage, told the board.



The money generated by the increase would allow Villaraigosa to carry out a longtime political promise: securing 20% of the DWP’s power from renewable sources, such as solar and wind energy, by Dec. 31. The increased revenue also is needed to “maintain the financial integrity” of the DWP and pay for the rising cost of coal, according to a report on the plan submitted to the commission.



DWP Acting General Manager S. David Freeman said that leaving the status quo in place would have made it harder for the utility to continue to help balance the city’s budget by contributing a figure expected to exceed $220 million this year.



Once all of the increases are in place next year, residential customers would see increases in their bills ranging from 8.8% to 28.4%, depending on where they live and how much power they consume, according to data provided by the mayor’s office. Businesses are expected to receive increases of 21% to 22% over the same time period.



Environmental groups, including the Coalition for Clean Air and the Sierra Club, warned that the state would impose financial penalties on the DWP if it doesn’t wean itself off of coal. They also argued that a refusal to act would exacerbate global warming, leading to more drought and local wildfires.



“This investment in renewables is very, very important to the health of our Earth,” said Kathy Seal, a Sierra Club volunteer who co-owns property in West Los Angeles.



A representative of the Los Angeles Unified School District had a less charitable view, warning that the increases would force his agency to pay an extra $8.7 million annually. “This increase could not come at a worse time,” said Randy Britt, the district’s director of sustainability initiatives.



— David Zahniser at Los Angeles City Hall

Los Angeles Mayor Antonio Villaraigosa on Thursday gained another important ally in his push for federal aid to speed expansion of the region’s transit network: Sen. Dianne Feinstein (D-Calif.)



Feinstein called the mayor’s "30/10 Plan" to complete 12 transit projects in 10 years instead of 30 "an innovative idea" that could help ease Los Angeles’ legendary traffic gridlock while creating jobs.



"As someone who believes that bold national infrastructure expansion programs are exactly what we need right now, I think the 30/10 Plan could become a national model for how to build up communities across the country," she said in a statement.



Feinstein earlier this week expressed concern about the long line of requests for federal aid, even as Villaraigosa was in Washington lobbying for federal support for his proposal. She noted in her statement Thursday that the mayor’s proposal calls for paying back any federal loans from Measure R, a half-cent sales tax increase approved by county voters last year.



— Richard Simon in Washington, D.C.

Los Angeles Mayor Antonio Villaraigosa on Thursday joined other city leaders to encourage residents to fill out and submit their census forms, saying that the undercount in the last census cost the city hundreds of millions of dollars in federal grants and assistance.

The mayor said that filling out the forms, which started arriving in mailboxes this week, takes only about 10 minutes, which he demonstrated by filling out his own form before a bank of television news cameras at City Hall.

“We’ve got to do everything we can to make sure that every single person is counted," Villaraigosa said. “We know that the most undercounted groups are immigrant groups. The most undercounted communities are communities of color. One of the most undercounted demographic groups are young people, and renters, the homeless."

Controller Wendy Greuel, who joined the mayor along with city council members Tom LaBonge, Bernard C. Parks and Jan Perry, said the undercount of Los Angeles residents in the 2000 census cost the city an estimated $206 million in federal funding for government programs.

Any major undercount in California would carry enormous consequences, including the possible loss of a U.S. congressional seat for the first time in state history and the loss of billions of dollars of federal funding for schools and other services.

Congressional seats and more than $300 billion in federal funding for more than 170 programs are apportioned by population, as determined by the census.

— Phil Willon at Los Angeles City Hall

Los Angeles Mayor Antonio Villaraigosa was back in the U.S. Capitol on Tuesday wearing a "30/10 for L.A." sticker as he made the rounds to build support for federal help to speed expansion of the region’s transit network, including the subway to Westwood.

The mayor already has picked up a key ally, Sen. Barbara Boxer (D-Calif.), in his effort to get Washington to provide the Los Angeles region with assistance — perhaps federal help in paying interest on loans or using federal stimulus money — so that projects now expected to take 30 years could be built in 10.

Boxer’s support is important because she chairs the Senate committee that will write the next big federal transportation bill. Her staff and officials at the U.S. Department of Transportation are looking at ways the federal government can help Los Angeles — with or without legislation.

"What we’re saying is let us do over 10 years what we were going to do over 30 years, and bring the jobs faster," Boxer said at a Capitol news conference attended by Villaraigosa and a delegation of business and labor leaders from Los Angeles.

Villaraigosa, who appeared before Boxer’s committee last week to testify in support of federal-local partnerships to speed up transit projects, acknowledged that asking Washington for more money at a time of massive federal budget deficits is a "very difficult proposition."

He said the Los Angeles region isn’t coming to Washington with its hands out, but rather offering to put up billions of its own dollars from Measure R, a half-cent sales tax approved by Los Angeles County voters last year. The program is expected to raise $40 billion for mass transit projects, including extension of the subway to Westwood and extension of the light-rail Gold Line to the San Gabriel Valley. The mayor’s office estimates the projects would create 166,000 jobs, mostly during the construction phase.

When he was speaker of the state Assembly, Villaraigosa said in an interview, "Everybody would come with their hand out. I would always tell people, ‘Hey, I’d get more excited about your program if you’re putting up your own money.’ "

In an effort to win support for the initiative, Villaraigosa and Boxer said the 30/10 plan could serve as a national model.

"This is the template, not just for L.A., but for what every city, county and state ought to do in these times — put up their own money, make the investments, create the jobs that we need right now and get the added value of cleaning the environment and reducing congestion," the mayor said.

The mayor may need to spend more time with Sen. Dianne Feinstein (D-Calif.). Caught by a reporter in the Senate subway, Feinstein said she wasn’t familiar with the mayor’s plan and suggested that the effort could run into resistance.

"The line is long for money from the federal government," she said. "And no one looks at the debt, and no one looks at the deficit."

— Rich Simon from Washington

Workers on Friday began removing a supergraphic from a building on Hollywood Boulevard that was at the center of the latest criminal sign case filed by City Atty. Carmen Trutanich.

A judge issued arrest warrants Tuesday for four people accused by Trutanich of putting up five unpermitted signs at 6800 Hollywood Blvd. and 6810-6820 Hollywood Blvd. The city’s sign law bans the installation of new supergraphics.

Deputy City Atty. Spencer Hart said a lawyer for two of the defendants, Alexander Kouba and France Luanghy, notified the city that the signs would come down while the criminal case is pending. Hart said the signs posed a “continuing threat to public safety" because they were installed without a city inspection.

Kouba and Luanghy each posted $100,000 bail Thursday. A third defendant, Thomas Curtin, posted $100,000 bail Friday.

Steve Madison, an attorney for Kouba and Luanghy, said the signs were “perfectly legal and safe."

“Given that the city attorney has taken the position that not only are they unlawful but criminal, we thought the prudent thing to do in the meantime would be to take them down," Madison said.

Shortly after 5 p.m., a supergraphic on the south-facing wall of 6800 Hollywood Blvd. had come down. Madison said the clients, which include the billboard company known as Community Redevelopment Assn., would continue to fight the charges.

The announcement came less than a week after Trutanich secured the removal of an eight-story supergraphic across the street. The defendant in that case, Kayvan Setareh, spent three days in jail on $1-million bail before being released. He has admitted no wrongdoing.

–David Zahniser at Los Angeles City Hall

The Los Angeles City Council on Friday voted to cut business taxes for Internet-based firms that had been socked with a mammoth increase last year after the city changed their tax rate from the lowest to the highest.



The council unanimously approved the measure despite concerns by some members that the tax break would be applied retroactively to Jan. 1 and cost the city $3.4 million in revenue. They argued that L.A. could not afford to lose that money at a time when the city faces a $212-million budget shortfall.



But some of the 1,400 businesses affected by the measure had threatened to move out of the city if the tax rate was not reduced, and proponents said the city would lose even more tax revenue if those firms relocated.



“We will lose more than $3.4 million if we don’t do it this year," said Council President Eric Garcetti. “It’s the right thing to do on dollars and cents.”



During the debate, Councilman Tony Cardenas said he supported the idea of the tax-rate reduction, but argued that to make it retroactive would send the wrong message at a time when the city is poised to slash services and layoff thousands of workers. Instead, the councilman wanted the reduction to take effect in 2011.


“We’re taking a step backward. We’re talking about reducing services at our libraries, to our parks, to our police department, the fire department and everywhere else,” Carendas said. “The question that I have is are we really going to lose these business within the next 12 months if we pass this today?”



Council members Jose Huizar, Paul Koretz and Richard Alarcon also expressed concerns about the lost revenue — with Koretz saying it made “absolutely no sense” — but ultimately voted for the measure. Garcetti urged a unanimous vote, saying it already had enough support on the 15-member council to pass.



Rachel Glaser, chief financial officer of the Internet search site mylife.com, said her company, which employs more than 100 people, already had been exploring a move out of Los Angeles to Culver City, Burbank or El Segundo because of the tax increase.



“We’re very happy this passed, not only for our company but for all the other businesses in L.A.,” Glaser said.



Glaser said last year the city’s Office of Finance reclassified her company and other Internet-based firms into a higher business tax bracket. The increase would have cost her company an extra $2 million to $3 million over the next five years, she said.



Until then, Internet companies were considered to be “multimedia” businesses and subject to a tax rate of $1.01 per $1,000 of gross receipts. Under the new classification, they were placed in the “business and professions” category, which has a tax rate of $5.07 per $1,000 of gross receipts. Under the measure approved Friday, the city will create new tax classifications for Internet companies, which will be subject to the same rate as multimedia firms, the lowest rate.



— Phil Willon at Los Angeles City Hall

A husband and wife accused of installing unpermitted supergraphics on Hollywood Boulevard posted a combined $200,000 bail Thursday in the latest outdoor advertising case filed by Los Angeles City Atty. Carmen Trutanich.



Alexander Kouba, 36, and France Luanghy, 41, did not surrender to the court as their lawyer originally predicted. Attorney Steve Madison appeared on their behalf and an arraignment was scheduled for April 30.



Kouba and Luanghy face allegations that they allowed five unpermitted supergrahpics to go up on two buildings in Hollywood — one at 6800 Hollywood Blvd. and one at 6810-6820 Hollywood Blvd. The case was filed days after a Pacific Palisades man was jailed on $1-million bail on allegations that he installed an eight-story supergraphic at Hollywood and Highland.



Assistant  City Atty. Jose Egurbide said that in the newest case, supergraphic sign structures at the two Hollywood Boulevard locations were reviewed by a Fire Department captain and a building inspector and found to be dangerous and substandard.



Madison said the signs have been up for years and have been approved by the Fire Department and a structural engineer. He also said that the city already has a 3-year-old case pending on 6800 Hollywood and 6810-20 Hollywood.



Luanghy and Kouba were identified by prosecutors as part of the Community Redevelopment Assn., a sign company that has sued to challenge previous city sign laws. They and their company, which sometimes goes by the name Liberty Media, are among eight defendants in the case.



Four of the defendants are businesses and four are individuals.



Prosecutors also secured a $250,000 arrest warrant for Mazen Nazzal, whom they identified as the owner of 6800 and 6810-20 Hollywood Blvd. A $100,000 warrant was obtained for Thomas Curtin, who was described as a head of the Paramount-based company Hangtime Installers.



Each defendant faces 10 misdemeanor counts of violating the city’s misdemeanor code, including the installation of unpermitted supergraphics.



— David Zahniser at Los Angeles City Hall

Upset about a proposal to lay off thousands of Los Angeles city workers, labor unions plan to hold a “mock red carpet" protest outside Mayor Antonio Villaraigosa’s official residence Thursday night as he hosts a pre-Oscars party for nominees.



The Coalition of L.A. City Unions, which represents approximately 20,000 workers, plans to protest outside the mayor’s Windsor Square residence — or close by, if the street is cordoned off by police.



“While the Mayor hailed the entertainment industry as the ‘lifeblood’ of Los Angeles in a press release about the Thursday event, city workers maintain every facet of the city, including streets, trees, beaches, historic landmarks and parks, that make the city the world’s prime filming destination," coalition member Service Employees International Union Local 721 said in a statement.



The mayor is teaming up with the Hollywood Reporter to put on the inaugural Nominees’ Night.


The publication describes the event as a “cocktail reception” designed to be the opening celebration of the 2010 Academy Awards weekend and to honor this year’s nominees.



The mayor’s spokeswoman, Sarah Hamilton, said Wednesday that the city is “not paying a penny" to host the party, which is being sponsored by Microsoft Bing and L’Oreal Paris. (Some union members question that, saying city police and other workers will likely be called on to control traffic and provide security.)



The event is being held, in part, to draw attention to the economic benefits of the entertainment industry in the city and L.A.’s effort to stem so-called runaway production to other locales, Hamilton said. According to the mayor’s office, the entertainment industry employs more than 200,000 people locally and generates approximately $25 billion a year in the region.



L.A. is grappling with a $212-million budget deficit, which is expected to more than double next year. Villaraigosa has called on all city employees to accept pay cuts, saying that would be the best way to alleviate the need to lay off thousands of city workers to close the budget gap.



The City Council already has authorized the elimination of 4,000 city jobs. That’s on top of 2,400 workers who will be leaving the city payroll under an early retirement program approved last year.



— Phil Willon at Los Angeles City Hall

After spending three days in jail, a Pacific Palisades businessman agreed Monday to take down an eight-story supergraphic advertisement that was wrapped around a prominent Hollywood office building.

Kayvan Setareh, 49, reached an agreement with Los Angeles City Atty. Carmen Trutanich that lowered his bail from $1 million to $100,000 in exchange for the sign’s removal. He is accused of violating the city’s sign law by installing the supergraphic — a vinyl or plastic sign that can be draped across one or more sides of a building — without a permit.

Setareh’s arraignment in Los Angeles County Superior Court was postponed to March 30. His lawyer, Andrew M. Stein, criticized Judge Mildred Escobedo for agreeing to the original bail amount.

Stein said he did not believe the sign posed any hazard, as city prosecutors allege.

“I don’t think my client’s sign endangered the public any more than the other signs that have been put up and down Sunset Boulevard over the last 10 years — permitted or unpermitted,” he said.

Last week’s arrest was by far the most aggressive move by Trutanich in his campaign against unapproved outdoor advertising. Lawyers in Trutanich’s office have argued that the supergraphic posed a threat to public safety, saying the heavy vinyl could fall on motorists and pedestrians if it was not properly reviewed by city inspectors.

Neighborhood activists have long complained that outdoor advertising companies violate the city’s sign laws with impunity, reaping millions of dollars in revenue. Dennis Hathaway, president of the Coalition to Ban Billboard Blight, described Monday’s proceedings as “the dawn of a new day.”

“This is certainly sending a very strong message to these companies that you can’t just put out a big illegal sign anywhere you want,” he said.

Setareh is scheduled to be released by Monday night. Removal of the sign is scheduled to begin at 10 p.m.

— David Zahniser at Los Angeles City Hall

Los Angeles City Atty. Carmen Trutanich took aim Friday at another over-sized supergraphic, saying his office has opened an investigation into an unpermitted, multistory advertising image on a building at Hollywood Boulevard and Highland Avenue.

Investigators with Trutanich’s office went early Friday to a billboard where an oversized ad for the movie “How to Train Your Dragon” is stretched across two sides of the 1927 First National Bank building. That building’s owners do not have permission to erect such a sign, according to a Trutanich spokesman.

The sign went up days after Trutanich filed a 97-page lawsuit against World Wide Rush and 26 other defendants alleging that supergraphics in a dozen locations pose a nuisance to the public. Trutanich spokesman John Franklin said he did not know the name of the company responsible for the new supergraphic on Hollywood Boulevard. But an activist with the Coalition to Ban Billboard Blight said he suspects that the company responsible for the image is iMedia Outdoor.

The telephone number listed on a website for iMedia Outdoor connects callers to what appears to be a fax machine. The website said the locations of the company’s signs are confidential.

Dennis Hathaway, president of the Coalition to Ban Billboard Blight, said he was surprised to see the image go up so soon after Trutanich filed his case against World Wide Rush. “To put it up a day after is like thumbing their nose at the city,” he said.

“Either they’re not afraid of the city or they figure it‘s worth the risk,” he said. “There’s a lot of money involved.”

 — David Zahniser at Los Angeles City Hall

Photo credit: Mel Melcon / Los Angeles Times

A lawyer representing six current and former employees of Los Angeles World Airports said the city’s Ethics Commission has dropped a conflict-of-interest investigation into travel to China and New England taken by his clients.

Attorney Terree Bowers said Ethics Commission executive director LeeAnn Pelham directed her staff to close the investigation, which was examining whether the airport officials violated the law by receiving discounted trips from an association that represents dozens of international airlines that use Los Angeles International Airport.

Bowers said in a statement that his clients were “cleared of any impropriety” regarding the conferences hosted by LAX Terminal Equity Corp. Those officials “paid full value or more for their tickets and were stunned to have become respondents in an ethics inquiry,” Bowers said.

Pelham said her agency does not comment on specific investigations. But she said that in general, when an investigation ends without any charges being filed, the Ethics Commission typically sends a letter to the target of the inquiry spelling out the findings of the agency and the justification for the conclusion that was reached.

“We close cases for many reasons. Sometimes it’s a lack of evidence. Sometimes it’s the application of the law,” she said.

Bowers said the officials who were under scrutiny were senior assistant city attorney Eduardo Angeles, property manager Ronald Domash, chief engineer Intissar Durham, purchasing and supply services manager Karen Tozer, retired airport manager Leigh Hatayama and retired airport planning chief Warren Richard Wells.

The Times reported in December that city ethics investigators were recommending that civil charges be filed against the six officials. Those investigators had alleged in case records that the officials violated municipal code sections that prohibit city employees from accepting more than $100 in gifts per year from an individual person, company or organization.

At the time of the trips, LAX Terminal Equity had three airport contracts, including a lease for a VIP lounge at the Bradley terminal, an agreement to operate ground equipment there and a $7.7-million reimbursement contract to modify gates at LAX to accommodate the giant Airbus A380.

The trips involved a weeklong cruise last year along the New England and Canadian coasts as well as a six-day excursion in 2005 to Beijing and Shanghai.

Investigators said in case records that airport employees received gifts worth $1,124.46 per person during the China trip and at least $434 per person during the New England cruise, which included one night at the Renaissance Boston Waterfront Hotel.

In his statement, Bowers called for an investigation to determine who leaked information on the Ethics Commission case to the news media. He said that whoever engaged in the leak should be “found and sanctioned accordingly.”

— David Zahniser at Los Angeles City Hall

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The last of the nation’s top financial credit agencies took action Tuesday to downgrade Los Angeles’ credit rating, which will almost assuredly increase the city’s cost for borrowing money.

City Administrative Officer Miguel Santana said Standard & Poor’s downgrade stemmed from its concerns about the significant drop in tax revenues and the city’s plans to draw on its reserve fund to end the year in the black.

[Updated 3:50 p.m.: The city’s rating moved from "AA" to "AA-minus," a mark still considered to be a relatively high grade. The state of California, by contrast, is rated “A-minus” by S&P.]

Though Standard & Poor’s acknowledged that the city had taken steps to close its budget gap — including last week’s authorization to eliminate 4,000 city workers to save as much as $300 million next fiscal year. But analysts continue to be concerned about the city’s structural deficit.

“They want to see action,” Santana said. “They want to make sure that the plan we’ve laid out actually reaches fruition and is completed. … The next question they will be asking when they review us again is, did you reduce those 4,000 positions.”

Last week, Moody’s Investors Service reduced its opinion of L.A.’s finances from "stable" to "negative" because city officials had delayed addressing the budget shortfall — currently $212 million — and have proposed tapping reserves to balance the books. In November, L.A.’s credit was downgraded by Fitch Ratings, which determined that Mayor Antonio Villaraigosa and the City Council failed to take adequate action to address the fiscal crisis.

Council President Eric Garcetti said the downgrade by Standard & Poor’s had been expected, but he emphasized that the council and mayor also had taken swift action to address the concerns raised, including approving layoffs, adopting a three-year budget plan and taking action to replenish the city’s reserve fund and balance the budget.

— Maeve Reston and Phil Willon at Los Angeles City Hall

Photo: L.A. Times file of Santana

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Los Angeles Mayor Antonio Villaraigosa on Friday called on all city employees to take pay cuts, including police officers and firefighters, saying it would be the only substantive way to alleviate the need to slash 4,000 city jobs.

Villaraigosa also moved forward with plans to eliminate the departments of Environmental Services and Human Services, transferring their essential duties to other agencies and reaping $3.2 million in savings.

He warned that “there will be more" agencies cut as part of his upcoming 2010-11 budget.

The mayor’s actions come a day after the City Council voted to eliminate 3,000 jobs by July 1 to help close the city’s $212-million deficit and larger shortfalls forecast for the years ahead. Those jobs are in addition to the 1,000 positions already being cut, and the 2,400 city workers leaving through an early retirement program.

Villaraigosa said the total number of job cuts could be softened if city unions agree to make major salary concessions. He said a 5% pay cut among all city employees would save $150 million.

“Every employee, from the mayor on down ought to take a cut," Villaraigosa said. “And that means police, that means fire, that means sanitation, that means every single employee."

The council did not exempt police officers and firefighters from the new round of job cuts, but Villaraigosa said he would oppose any effort to shrink the police force.

–Phil Willon at Los Angeles City Hall

A long-awaited report is due Friday on whether Los Angeles International Airport should improve air safety by widening the distance between its two north runways. That document has residents near LAX on edge because one of the options under consideration is to move a runway 340 feet north into Westchester.



A committee of academics, working with the National Aeronautics and Space Administration, plans to release a preliminary copy of the report at 10 a.m., telling a panel of neighborhood and business representatives near LAX what it thinks is the best strategy for the two runways on the airport’s north side.



“We’re nervous because we don’t know what’s coming,” said Denny Schneider, a member of the Westchester – Playa del Rey Neighborhood Council. Schneider, who also serves on the committee that is scheduled to receive the report, said he fears the document might persuade elected officials, including Mayor Antonio Villaraigosa, to push a runway and surrounding airport land north into the Lincoln Boulevard business district.



Los Angeles World Airports Executive Director Gina Marie Lindsey, speaking Thursday afternoon to the Los Angeles Current Affairs Forum, said she has not received the report. She said the study by the academics has been “so independent that we don’t know, before they release the study, what it will say.”



Airport officials have been trying to determine whether a greater distance between those two runways would reduce the number of near-misses involving arriving and departing jets. Lindsey said that the runways on the north side of LAX were designed for smaller jets built in the 1960s.



The academic committee was charged with looking at five options. One would involve doing nothing, while a second would push the northernmost runway 100 feet north into Westchester. A third would push the northernmost runway north by 340 feet. A fourth would result in the elimination of one of the two runways on the north side of LAX. A fifth would call on the airport to relocate one of its north runways 340 feet south – a move that would require the demolition of Terminals 1, 2 and 3 at the airport.



–David Zahniser at Los Angeles City Hall

Under the threat of a credit rating downgrade, the Los Angeles City Council on Thursday instructed agency heads to eliminate 3,000 additional city jobs “by any means necessary, including layoffs” by July 1.

The reduction — aimed in part a wresting further concessions from the city’s unions — would be in addition to 1,000 job cuts already in the works. Those alone are expected to lead to 250 to 350 workers receiving pink slips, officials said.

The council vote comes a day after Moody’s Investment Services, one of the nation’s top financial credit rating agencies, issued a negative outlook for Los Angeles because of the city’s struggles with a $212-million deficit. It also comes a week after Mayor Antonio Villaraigosa called for an additional 1,200 and 2,000 job cuts — or wage reductions for city workers — to help balance the city’s books.

The council’s 9-3 decision came after members met in closed session for several hours with City Administrative Officer Miguel Santana, who cautioned that tax revenues have continued to deteriorate. Unless the city finds more revenue or costs are reduced, the budget shortfall is expected to increase to $485 million in 2010-2011.

Under the measure approved by the council, police officers and firefighters would not be exempt from possible job cuts. But a spokesman for the mayor said Villaraigosa would oppose cuts to police.

Councilman Greig Smith urged members to take quick action and said Los Angeles cannot afford to engage in the financial paralysis that has consumed state government, which has battled deficits for years.

“You cannot walk away from this thinking that it’s going to take care of itself,” Smith said.

The council’s motion faced strong objections from several council members — including Richard Alarcon, Paul Koretz and Paul Krekorian. Koretz said the 4,000 number had been “plucked out of the air” with no analysis. “I think it’s a devastating mistake,” he said.

Councilman Jose Huizar asked Santana, the city’s top financial analyst, to provide the council with a list within 20 days of the 4,000 positions that would be eliminated. “We need this information before we just use a sledgehammer and draw the gauntlet and not even know what the impact on the city will be.”

A spokesman for Villaraigosa praised the council’s vote, and said immediate action was necessary to help the city avoid insolvency.

“They clearly got the message,” said Deputy Chief of Staff Matt Szabo. “This is entirely consistent with what he’s said for weeks. “The mayor’s been saying we need to downsize city government and live within our means. The council took action today to achieve that goal.”

Victor Gordo, an attorney for the Coalitions of L.A. City Unions, said he was disappointed by the call for more job cuts before the council fully explored a variety of proposals to increase revenue and trim expenditures.

“We are committed to finding solutions that preserve city services and city jobs,” said Gordo. The coalition represents an estimated 22,000 city workers.

— Phil Willon and Maeve Reston at Los Angeles City Hall

One of the nation’s top financial credit services Wednesday issued a negative outlook for Los Angeles, which is struggling with a $212-million budget gap. The move could lead to a lower credit rating for the city and ultimately increase Los Angeles’ cost of borrowing money.



Moody’s Investors Service took the action because of delays by the city in addressing the budget shortfall, which is expected to grow to $485 million in the 2010-11 fiscal year. The service also expressed doubts that proposed layoffs and service cutbacks under consideration by the City Council would deliver the promised savings.

 

“The erosion in the city’s historically better-than-average willingness and ability to quickly re-balance its budget mid-year also contributes to this revised outlook," the ratings firm said in a statement.

In November, L.A.’s credit was downgraded by Fitch Ratings, which determined that Mayor Antonio Villaraigosa and the council had failed to take adequate action to address the city’s fiscal crisis. Villaraigosa has since ordered department heads to eliminate 1,000 jobs, but employee unions are lobbying to avoid layoffs.

The nation’s other major credit rating agency, Standard & Poor’s, has not made any public announcement regarding Los Angeles.

Because the city collects tax revenue intermittently throughout the year, it depends on short-term loans to make payroll and pay bills.

— Phil Willon at Los Angeles City Hall