Los Angeles city leaders have spent seven years clawing their way back from the financial brink, confronting and erasing a series of budget shortfalls that threatened some of the most basic taxpayer services.
Instrumental in those recovery efforts was City Administrative Officer Miguel Santana, the high-level budget analyst who reports to Mayor Eric Garcetti and the 15-member City Council. At the peak of the crisis, Santana pushed for layoffs, furloughs and other measures unpopular with employee unions and even some of his bosses.
Now, with L.A. on the mend, Santana is heading to another organization in turmoil: the Los Angeles County Fair Assn., the nonprofit corporation that stages the annual fair and runs other enterprises on the taxpayer-owned fairgrounds in Pomona.
The change in jobs announced Wednesday represents a major loss for the city, said former County Supervisor Zev Yaroslavsky, director of the Los Angeles Initiative at the UCLA Luskin School of Public Affairs. At City Hall, Santana was “a voice of fiscal reason” who was willing to deliver news the city’s elected officials didn’t necessarily want to hear, he said.
“He was not fearful about telling his bosses when they were about to walk off a cliff,” said Yaroslavsky, who also served nearly two decades on the City Council.
Santana will start his new job Jan. 17, about 10 months after the resignation of top fair executive James Henwood Jr., who stepped down after The Times reported on the lucrative pay and benefits he and other association executives received.
The Times reported that Henwood received more than $1 million in total compensation in 2014, far more than other fair executives in California. Separately, a state audit concluded that taxpayers were denied millions of dollars in revenue from the fair’s hotel and conference center and its other enterprises. The report also rebuked the fair association for failing to adequately maintain its trailer park, violating health and safety laws.
One of Santana’s first challenges will be to address calls by government auditors to seek payment of back rent from the fair association.
State auditors said the county likely gave up more than $6 million in rent that it should have received between 2006 and 2015 under a lease agreement approved by the Los Angeles County Board of Supervisors. The county auditor-controller, in a separate report, said the county has been losing as much as $1 million a year in unpaid rental income.
The fair association has not responded to questions as to whether it will pay the county the back rent. But Santana said he intends to look at a range of issues at the fair organization — and ensure the concerns raised by auditors are addressed.
“Part of the reason why the board recruited me is because I understand how public agencies work,” he said. “I’m on the other side of lease negotiations representing the public interest. So I look forward to engaging in a conversation with the county about the issues raised in the audit.”
“We should be able to get to a resolution quickly,” he added.
Auditors also have criticized the fair association’s other executive salaries and thousands of dollars in meals and entertainment provided to the nonprofit’s members and board of directors. In 2015, the fair’s five highest-paid vice presidents received compensation ranging from $307,000 to $399,000 — more than Santana’s current city salary of $303,762.
Santana, 47, said he will receive a base salary of around $485,000, with the opportunity for a 10%, or $48,500, bonus — roughly half of what the fair’s longtime CEO received in 2014. He said the size of his pay package “reflects the responsibility of the job” and declined to criticize his predecessor’s larger compensation package.
Two Democratic lawmakers from the Pomona area, Rep. Norma Torres and state Assemblyman Freddie Rodriguez, sounded encouraged by the hiring of Santana but said they want to see more done on executive pay. “I still have concerns about the high compensation being paid to fair executives,” said Rodriguez, who pushed for the state audit.
Rodriguez said he also wants Santana and county officials to “restore” millions of dollars in rental income from the fair operations.
Torres said she hopes Santana will “set better fiscal priorities for the Fairplex and ensure that they make good use of taxpayer funds.”
Supervisor Hilda Solis, whose district includes the fairgrounds, also welcomed Santana’s appointment, saying he is “known for resolving tough situations.”
Santana is the son of Mexican immigrants, both of whom were in the country without legal authorization throughout his childhood. His parents obtained their citizenship in 1986 as part of President Ronald Reagan’s amnesty initiative.
Born in East Los Angeles and raised in Bell Gardens, Santana spent more than a decade as an aide to former county Supervisor Gloria Molina, whose district stretched from the city’s Eastside to Pomona. He was tapped by then-Mayor Antonio Villaraigosa to become City Administrative Officer in 2009, in the midst of a global economic downturn — just as the city was confronting a $484-million budget shortfall.
“Everyone thought we were going to go bankrupt,” said Villaraigosa, now running for governor. “That was the rap, and that never happened. I said, ‘Not on my watch.’ And he was the guy — he and his staff — that provided the path out.”
Santana advised Villaraigosa and the council as they negotiated salary freezes and reductions in pension benefits for new hires. The city granted early retirement to 2,400 city employees and transferred roughly 1,000 more to agencies not affected by the budget, such as the Department of Water and Power.
Some of Santana’s efforts were highly controversial, including the layoff of more than 300 employees. That move drew the ire of the city’s civilian employee unions, which made him an issue in the 2013 election.
Council President Herb Wesson promised to fight any effort to oust Santana, who remained in his post after Garcetti took office.
Victor Gordo, attorney with the Coalition of L.A. City Unions, said he is sure that Santana did “what he personally believed was the right thing.” But he also argued that some of Santana’s financial recommendations did not work as planned.
Santana endorsed layoffs, Gordo said, when other solutions would have resulted in more savings — and without adding to a severe unemployment problem. “I disagreed very strongly, and believe to this day, that it was a mistake to lay people off in the midst of a recession,” he added.
As the economy recovered and the city found its yearly deficits gradually shrinking, Santana turned his attention to other longstanding problems: the proliferation of garbage on city streets, the longstanding backlog in sidewalk repairs and the need to address a growing homelessness crisis.
On Nov. 8, voters approved a $1.2-billion bond measure to finance part of Santana’s strategy for tackling homelessness.
Wesson, who championed the homeless bond measure, said city leaders may need to carry out a national search to fill Santana’s post. “I’m sick about this, and I don’t think we can replace him,” he said. “So we’re going to have to find somebody else with their own style.”
Garcetti expressed gratitude for Santana’s work, saying it will “continue to help us manage Angelenos’ tax dollars as effectively and responsibly as possible.”
4:05 p.m.: This article was updated with a comment from Supervisor Hilda Solis.
3:45 p.m.: This article was updated with a comment from Rep. Norma Torres (D-Pomona).
3:20 p.m.: The article was updated with an additional comment from state Assemblyman Freddie Rodriguez.
3 p.m.: This article was updated with additional background on the state audit of the fair association as well as comments from Santana, attorney Victor Gordo, state Assemblyman Freddie Rodriguez, Council President Herb Wesson and L.A. Mayor Eric Garcetti.
11:45 a.m.: This article was updated with a comment from former L.A. Mayor Antonio Villaraigosa.
11:10 a.m.: This article was updated with additional background.
This article was originally published at 11 a.m.