Riordan’s Proposed Budget Adds No Police

After five years of aggressively expanding the Los Angeles Police Department, Mayor Richard Riordan unveiled a $2.7-billion budget Monday that would not add new officers to the force, ending at least for now the hiring boom that swept Riordan into office and remains the hallmark of his tenure.

Riordan’s budget, released at a morning news conference, boosts city spending by $100 million and closes a projected budget shortfall of $75 million through a combination of cuts to existing programs and new revenue--with the increased money coming from higher fees collections generated by the region’s increasingly healthy economy.

“I cannot emphasize enough that closing the gap was not an easy task,” Riordan said. “But we did it.”

The spending proposal includes no new taxes--though it does create a modest cat license fee and a $1 annual charge on rental properties to pay for a new inspection program. It also provides for a $38-million reserve fund, a potentially tempting pot of money that the Riordan administration will have to fight hard to preserve, as the proposed budget moves to City Hall for consideration by the City Council.

Hardly had the ink dried on the recommended budget before some council members spotted projects that they want paid for, but that are not included in Riordan’s proposal. Just last week, in his State of the City address, Riordan announced his support for building a network of elected neighborhood councils across the city, a move welcomed by supporters of those councils. His budget, however, does not include money for them.

Councilman Joel Wachs, who has spent a majority of his time recently on developing proposals for the councils, said he was disappointed by Riordan’s failure to fund the groups.

“You can’t have meaningful neighborhood councils and meaningful community empowerment without funding,” Wachs said. “Otherwise, it’s just going to be lip service.”

Riordan, the councilman added, is “just not putting his money where his mouth is on neighborhood councils.”

Jennifer Roth, the mayor’s budget director, acknowledged that there is no money in the current budget for the councils. But she said that was because they remain under review by the two commissions charged with overhauling the city charter.

DWP Fund Transfers

There are other potential rough spots in the budget. Among other things, it is balanced in part by requiring the city Department of Water and Power to maintain its level of transfers to the general fund, a move that helps keep municipal services intact, but one that could expedite the day of reckoning with the DWP’s debt crisis. DWP General Manager S. David Freeman had proposed reducing the city’s dividend from the utility from 5% to 3% a year as part of an ambitious plan to reduce $4 billion in debt on DWP power plants.

But making that cut now would have left a $44-million hole in the budget. So, at the request of Riordan’s staff, Freeman quietly abandoned the effort to pare the transfer.

The result: Maintaining the city’s financial reliance on the DWP helps balance the budget, but it slows the DWP’s efforts to reduce its massive debt and prepare for full competition in California’s electric power industry. Over the next five years, the DWP’s debt-reduction effort could lose more than $200 million if the Riordan administration continues to insist that the agency contribute a full 5% to the city budget.

On Monday, Riordan insisted that the decision to require DWP to keep making its full payments would not hamper that agency’s recovery efforts.

“The amount of transfer is not that significant,” said Riordan, adding that the budget announced Monday was drafted with Freeman’s cooperation and agreement.

Several council members said they viewed the DWP transfer as somewhat worrisome, given the layoffs and other changes aimed at preparing the utility for the open energy market.

“In an age of layoffs and deregulation, this may be a very difficult goal to meet,” Councilman Richard Alatorre, chairman of the council’s Budget and Finance Committee, said in a statement. “I expect this to be a very hot topic as the budget progresses.”

As usual, most attention surrounding the mayor’s budget was on public safety, and the message there was mixed: The LAPD got little in the way of new money or officers, but the Fire Department is set to begin a long-sought expansion.

The LAPD, for years the beneficiary of Riordan’s largess, suddenly finds itself scraping to stay even--partly because federal money for new police officer hiring is beginning to run dry. The city this year lost $14 million in federal money for officer hiring and is expected to lose $25 million more next year.

That adds to the annual budget gap that confronts Riordan administration officials as they sit down to hammer out their figures. This year, they noted that the LAPD will add a few new officers, those recently absorbed from the Metropolitan Transportation Authority, but those police are merely moving from one agency to another, so they are not adding to the city’s overall public safety.

In addition, the LAPD is expecting a wave of retirements in July, as veteran officers cash in on a pay hike that will boost their pensions. The administration will replace those officers, so attrition should not significantly thin the LAPD’s ranks.

Nevertheless, that means that the LAPD will have about 9,760 sworn officers--more than at any point in its history but far fewer than Riordan promised when he ran for office in 1993. The Police Department also is being asked to absorb a $10-million cut in annual overtime costs, from $33.6 million to $23.6 million.

Riordan, whose championing of a bigger LAPD has been relentless over the past five years, sounded a different tune Monday.

“We had dramatic increases,” he said. “We just had to stop, take a good look at it.”

Riordan also said that the LAPD’s current chief, Bernard C. Parks, has improved the deployment of officers, getting them out of offices and onto the streets, and therefore has reduced some of the pressure on the department to grow quickly. But the mayor held out the possibility of adding more officers in future years, assuming that city revenues continue to grow.

“It certainly could be better, but with the city’s current fiscal situation, I think they felt they couldn’t give us much more,” said William R. Moran, who is head of the LAPD’s Fiscal and Support Bureau. “We’ll have to work with what we get.”

In contrast to the LAPD, the tragedy-struck Fire Department was picked to receive money to hire 126 new recruits and buy two helicopters to replace ones that have been downed in recent months. The Fire Department also was budgeted for a new station in the San Fernando Valley--which has the dual political benefit of helping a popular department and delivering a visible sign of city support to a region where some are weighing secession from the city.

What may prove the most contentious aspect of Riordan’s budget appears on the surface as one of its driest features: The administration wants the City Council to create a $38-million reserve fund to calm nerves on Wall Street about the city’s fiscal responsibility.

The council, however, has rarely seen a pot of money that it didn’t covet, and persuading city legislators to leave those funds alone will test Riordan’s always suspect political strength at City Hall. Even as Riordan released his budget, some city officials wondered whether the council can be persuaded to take the reserve fund seriously.

“Typically, this becomes a pork barrel,” Riordan said in an afternoon meeting with Times editors and reporters.

Riordan’s proposal on the reserve did, however, get a mild endorsement from a frequent critic, Controller Rick Tuttle.

“My impression is the mayor is moving in the right direction with the reserve fund,” said Tuttle, who believes that it should be even higher, at 2% of the total budget. “As we’ve ratcheted up our voter-approved debt in the city, this [a strong reserve] is something the rating agencies would like to see.”

Five-Year Outlook

In general, city officials said the latest Riordan budget is relatively noncontroversial, aided greatly by the city’s healthy economy, which is producing more tax revenues of various kinds.

“The revenue estimates are solid,” said City Administrative Officer Keith Comrie, a longtime veteran of the city budget process. “We have a great economy--$100 million in additional revenues--that helps an awful lot.”

In fact, the five-year outlook is even stronger. With the economy showing signs of sustained growth, Riordan administration officials, who once wrestled with shortfalls of $200 million, predict that the city budget will be in the black by 2003.

And yet, beneath the grand issues of fiscal responsibility and public safety lurks yet one other potentially explosive topic in the mayor’s budget: his recommendation that cat owners be required to pay a license fee for their animals.

At $8 for a spayed or neutered cat or $30 for an unfixed one, the fee is expected to generate only about $200,000 and is intended as a way of registering cats for their safety, not as a way to raise money. Moreover, dogs already are required to be licensed, so the cat fee, officials said, was a matter of “animal equity.”

Still, Riordan knows the risks of offending any constituency, and cat owners could be his next nightmare.

“My daughter, who owns cats, was picketing my house this morning,” Riordan joked. “But being a dog lover myself, I believe in equal treatment.”

The City Council’s five-member budget committee will hold budget hearings between April 30 and May 12. The full council is expected to approve a city spending plan by the end of May.

*

Times staff writers Jeff Rabin and Matt Lait contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

L.A. PLAN

Highlights of Mayor Richard Riordan’s proposed 1998-99 budget:

Total: $2.7 billion, a $100 million increase over this year.

New taxes: None, but a few new fees, including $1-a-year levy on rental properties to pay for inspections.

Public safety: LAPD gets no new officers and must cut $10 million in overtime. Fire Department gets permission to hire 126 recruits.

Cat fee: $30 unless animal is spayed or neutered, then $8.