THE MAYOR’S COMMISSIONERS : Changing of the Guard : Riordan Calls on 3 Key Commissions to Be His Cavalry

Struggling to close a yawning budget gap and fund a record five-year police buildup, Los Angeles Mayor Richard Riordan is betting heavily that a new crop of appointees to major city commissions can come to his rescue.

Riordan has dispatched 200-plus appointees to far-flung citizen commissions in search of new savings, more revenues and policies that will expand the city’s business tax base.

And nowhere are the stakes higher for the mayor than at the city’s large, revenue-generating “proprietary” departments--Water and Power, Airports and the Harbor.

“They’re a big part of the solution,” said Deputy Mayor Michael Keeley, who oversees all three agencies. “(On) a dollar pie chart, the largest contribution probably would come from the proprietary departments.”

The airport, harbor and huge city-owned utility are the “economic engines” of city government and “should be run like businesses (that return) proper shareholder value” for taxpayers, Keeley said.

But critics, wary of the new venture capitalist-turned-mayor and his appointees, warn that the quality and quantity of services, long-term investment in vital public facilities, and employee jobs and benefits are at risk.

“The venture capitalist attitude is to cut, run, take your profit and leave everyone else holding the bag,” said Bob Duncan of the 8,500-member city Engineers and Architects Assn. “It’s short-term profit-taking at the expense of long-term, long-range effective service.”

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Some more detached observers also say Riordan’s appointees reflect a historic shift in city government and its attitude toward the moneymaking departments. For much of this century, the airport, harbor and DWP have accumulated political power and enjoyed relative independence, said UC San Diego professor Steve Erie, who studies the city. The key to their success was that they fulfilled their mission: stimulating citywide development and economic growth.

“This is an epic point,” Erie said. “We have not had anything like this since the 1930s” when unsuccessful, Depression-era efforts were made to siphon off port and airport revenues. Aggressive investment in expanded water projects, sewage treatment facilities and cargo handling facilities at LAX and the port is still essential, Erie said. “You could make a quick budget fix at the risk of sabotaging the city’s economic future.”

Those fears are unfounded, Riordan’s appointees say. “The mayor has been very adamant that (the port) functions as a business,” said Harbor Commissioner Carol Rowen. “We are not going to jeopardize the business of the port. The port has to grow.”

Nonetheless, the new port commissioners have joined in the hunt for new dollars and creative ways to economize. They are exploring ways to cooperate with neighboring Long Beach Harbor, for years a major rival. And they are re-examining their agency’s staffing, which Administration officials note is twice as large as Long Beach, even though both ports move the same amount of cargo.

“We have to take a very good look at how funds are budgeted now,” Rowen said, “and that is what we are in the process of doing now.”

Similar budget reviews have been launched at other agencies, prompting fears by employee groups that jobs could be eliminated and services curtailed.

Riordan downplays the possibility of layoffs, but he also makes it clear that commissioners are the “doers and implementers” he needs to find savings.

As the new appointees settle in, they are confronting legal hurdles, strong political resistance and a growing appreciation of the needs in their own departments.

Airport Commission President Ted Stein and his panel have battled in court and public to collect up to $46 million a year in increased LAX landing fees--funds they hope to use for additional police. Stein says the commission is running the airport in a more entrepreneurial fashion, but financially reeling airlines complain that the Administration is hurting, not helping, their industry.

Thus far, the commission has won the legal fight, but lost ground on the political front. Federal lawmakers are moving to tighten restrictions on airport money, leaving unclear if the funds may be available for law enforcement. “It is a dynamic equation,” said Keeley, the deputy mayor.

Meanwhile, port officials note that they turn over $26 million a year to the city, and question how much more could be made available without shortchanging pier expansions and other projects. They also cite legal restrictions on the use of harbor funds. “Is there more (money)? Yes,” said port director Ezunial Burts. “Is there a lot more? No.”

The Administration’s greatest near-term hope appears to be at the huge, city-owned Department of Water and Power. Appointees there have a freer hand in spending funds and the DWP makes annual payments to the general budget, often exceeding $100 million. However, officials say a commission vote could shift more funds to the general city budget if profits can be increased, either by cutting costs or raising rates.

DWP residential and commercial water and power bills are comparatively low and Riordan reportedly broached the idea of a rate increase with some City Council members this year. But he has since publicly backed away from the idea.

For now, cutting expenses is the focus. With Administration backing, the City Council soon is expected to approve a major independent audit of DWP operations that will compare costs, staffing and productivity with other utilities.

DWP commission President Dennis Tito, a pension fund manager who has been consulting regularly with Riordan, said his charge is to somehow get a better deal for the city out of the utility. “It’s not going to be easy,” Tito said. “(But) that’s really the mayor’s primary goal--create more efficiency in government and use those revenues to make the city” safer.

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An early, contentious issue has been the DWP employee pension fund. Tito said annual city contributions are abnormally high and the account is about $400 million overfunded by conventional industry standards, including those used by other city retirement accounts.

“Ninety-nine percent of the other pension funds in the country, together with the federal government, can’t be all that stupid,” Tito said, adding that an expert review of the account has been ordered.

But angry employee groups, who have friends on the liberal-leaning City Council, say they will mount an all-out political and legal campaign to preserve the system.

Tito’s analysis does not fully consider costs of the relatively high number of DWP workers who go on to earn full retirement benefits, said Duncan, whose union includes 2,500 utility workers. “There will be a big-time fight. We are not going to let them take a pension plan and tear it apart.”

The Riordon Scorecard

STAFFING:

PLEDGE: Hire 3,000 more police officers with no new taxes.

ANALYSIS: The linchpin of the plan, leasing out LAX, faces legal and political uncertainties.

STATUS: Proposed hiring 2,855 additional officers over five years and increasing patrol force by “equivalent” of 4,335 officers through use of overtime and redeployment. Begins with 50% boost in patrol hours by next summer, but bulk of required funding not identified.

* PLEDGE: Appoint commissioners reflective of city’s diversity and geography.

ANALYSIS: Can be implemented immediately.

STATUS: Fifty-seven percent of commissioners are white, compared to 42% under former Mayor Tom Bradley; whites make up 37% of the city’s population. Disproportionately drawn from Westside and San Fernando Valley, number of appointees from central, South-Central and southwest areas has declined.

MONEY:

PLEDGE: Cut mayor and City Council budgets by 20%

ANALYSIS: City Council could override.

STATUS: New mayor’s initial staff budget was reduced 10% and positions were down about 30% overall. Urged City Council to reduce its budget, but no formal proposal for 20% cut.

* PLEDGE: Travel at personal expense and work for $1 a year.

ANALYSIS: Can be implemented immediately.

STATUS: Forgoing salary, except for $1 per year.

Paying personally for all travel, including city business trips.

SERVICES:

PLEDGE: Contract out garbage collection but assure that no current workers lose jobs.

ANALYSIS: Requires City Council approval, denied in past because of opposition from minority-group council members and labor.

STATUS: Under study; no specific proposal.

* PLEDGE: Eliminate Board of Public Works.

ANALYSIS: Requires City Council approval, denied in past.

STATUS: Public Works board members appointed and instructed to work toward elimination of the panel in one year.

* PLEDGE: Consolidate departments of planning, transportation, community development and housing.

ANALYSIS: Requires City Council approval.

STATUS: Under study; no specific proposal.

* PLEDGE: Meet regularly with the public

ANALYSIS: Can be implemented immediately.

STATUS: “Meet the Mayor” sessions with public held in 12 areas of the city; frequent appearances on radio and TV talk shows.

BUSINESS:

PLEDGE: Sell government bonds to provide capital to attract high-tech firms to L.A.

ANALYSIS: Requires City Council approval.

STATUS: Under study; no specific proposal.

* PLEDGE: Require processing of environmental impact reports for building projects within a year.

ANALYSIS: Implementation began under Mayor Tom Bradley’s Administration but faces funding problems if more staff is required.

STATUS: Under study: no specific proposal.

Source: Riordon campaign literature, inyerviews and public remarks