Secession Group’s Income Drops Steeply

The group pushing San Fernando Valley cityhood received just $20,454 in income last year--a tiny fraction of what it raised the year before--forcing the organization to go deeper into debt and cut the pay of its president by 86%, according to tax returns released Tuesday.

Valley VOTE raised $252,160 in 1998, when it organized a successful petition drive in which one-fourth of all Valley voters signed up to say they favored a study of cityhood.

The shortage of revenue last year meant the group could not pay off $64,000 in loans from 1998, mostly from Valley power brokers David Fleming, a president of the city Fire Commission, and Bert Boeckmann, a city police commissioner, whose business lent money to the group.

The shortage of cash also forced the group to go deeper into debt, ending the year $69,633 in the red, and cut the pay of President Jeff Brain from $23,500 in 1998 to just $3,186.

Finances are about the same this year as last, with about $20,000 in income expected, Brain said Tuesday. Brain and Valley VOTE Chairman Richard Close, however, denied that the group is in financial trouble or suffering from waning public support. They said the finances reflect a period of relatively dormant activity for Valley VOTE as the action has shifted to a county commission that is conducting the cityhood study.

“In prior years we had the petition-gathering process and there were a number of legal questions that arose,” said Close. “So we needed more funding in those years. In 1999, there wasn’t the need for money.”

Close said the tax return shows that Valley VOTE is a grass-roots effort that relies heavily on volunteers.

This year, the group began a dues-paying membership program that has drawn hundreds of people paying $20 each to defray the group’s costs, Brain said.

Despite the new source of income, Brain said he expects to be paid less than $3,000 as president of Valley VOTE this year, which means he has relied more on his real estate business and a consultant contract with the city’s Business Improvement District in Sherman Oaks.

The release of the tax returns comes just as Valley VOTE and secession groups in the Harbor area and Hollywood pick consultants to help them participate in the trio of cityhood studies that are underway. The contracts could cost up to $400,000, the bulk of which may have to be paid by Valley VOTE.

Close said he is confident Valley VOTE will be able to pay the bills because of a fund-raising drive planned for early 2001.

“When we needed funding before for the petition drive, which was more speculative than the situation now, the funds were there,” Close said. “I think it will be easier now because most people believe it [cityhood] will be on the ballot.”

Fleming and Boeckmann have formed a separate group called San Fernando Valley CIVIC Foundation, which is prepared to step in and raise funds for educational efforts and study costs if the Local Agency Formation Commission needs help, Fleming said. The group has raised about $67,000 in start-up funds, with $5,300 in the bank at the end of last year, but could raise significantly more money if needed, Fleming said.

A Studio City attorney, Fleming said he is not concerned that Valley VOTE has not repaid any of the $37,500 loan that he made to the group in 1998. “I’m patient,” he said. “I don’t need the money.”

Fleming is chairman of the Economic Alliance of the San Fernando Valley, a leading business advocacy group, and is an appointee of Mayor Richard Riordan to the Fire Commission. Boeckmann is one of the Valley’s major political donors and is a Riordan appointee to the Police Commission.

Although Valley VOTE has confirmed that major contributions were received in previous years from Boeckmann, Fleming and the Daily News of Los Angeles, the group has refused to release a complete list of donors, and refused to do so again Tuesday.

The Local Agency Formation Commission is studying whether Valley cityhood would financially harm the Valley or the rest of Los Angeles. If the study finds that secession is viable, LAFCO may put the cityhood issue on the November 2002 ballot. The Valley would become an independent city if secession were approved both by a majority of citywide voters and a majority of voters in the Valley.

Close said Valley VOTE will be capable of paying a consultant to analyze and respond to LAFCO’s financial study.

He downplayed the growth in debt last year and the reduction in pay to Brain, denying that they are signs that Valley VOTE is in dire financial straits.

The loans carried over from 1998 are mostly from Fleming and Galpin Motors Inc., Boeckmann’s car dealership, although Close said he had to dip into his own pocket last year to lend the group money to meet expenses.

“The people who lent money, including myself, are not pressing for payment,” Close said.