Hawthorne Request for Tax Advance Rejected : Crisis: County supervisors say strapped city must present a plan for balancing its budget before receiving any April property assessment revenue early.
Sternly rebuking the financial policies of Hawthorne city officials, the Los Angeles County Board of Supervisors voted Tuesday to require that the cash-strapped city come up with a plan to clean its fiscal house before receiving a $1-million advance on property tax revenue.
Citing the financial debacle that has befallen Orange County, the supervisors said they hope that their action will be an incentive for the city to resolve its fiscal crisis.
The city has a $10.5-million budget shortfall, among other problems, and the crisis is so severe that municipal leaders have said they may consider such measures as selling City Hall or eliminating the Fire Department.
Saying an infusion of cash is necessary to prevent a collapse of services, the city had asked the county for an immediate $1-million advance on tax revenue that would normally be forwarded in April.
Such requests are usually handled by the county treasurer, but the supervisors adopted an emergency motion granting themselves discretion for approving such requests.
“We’ve got a city spending itself into bankruptcy, and they come to the county asking for a favor,” said Supervisor Zev Yaroslavsky, who drafted the motion.
“We can be blind to the reckless spending, or we can exert some leadership here on behalf of the citizens of Hawthorne.”
Yaroslavsky called the city “out of control” and “not disciplined enough to spend within its means.”
Under the motion, Hawthorne leaders must present a plan for balancing the budget that must be approved by county Chief Administrative Officer Sally Reed before they receive the advance.
Supervisors said they had the right to assert some authority over the issue because the county might be forced to assume responsibility for fire and safety services if the city goes bankrupt.
Reed said Hawthorne probably will wind up filing for bankruptcy protection anyway.
“It’s highly likely the city will go bankrupt without the advance, but it is also highly likely they will anyway,” she told the board. “This (Hawthorne proposal) buys some time for the city, but the problems are very serious.”
No Hawthorne officials attended the board meeting. City Manager Todd W. Argow learned of the board’s action late in the afternoon. He said the city is pursuing ways to resolve its problems.
“We have a plan of action, and we will be giving our report to the county (today) to go over it and see what else is needed,” he said.
Responding to Yaroslavsky’s comments, Argow said the city is committed to cleaning house.
“I’ve been here a month, (and) the finance director has been here three months and is bringing in a new team,” he said.
“We’re taking dramatic steps to turn things around. The only reason we approached the county is because we have extraordinary circumstances here, and basically under extraordinary circumstances, you turn to other public agencies for aid.”