Riordan, City Council Battle Over Spending

Randy Newman had it right: It’s money that matters. Take, for example, the ongoing battle between Los Angeles Mayor Richard Riordan and the City Council.

Ever since Riordan took office seven years ago, the savvy businessman-turned-mayor has sought to control the city’s finances with an iron will.

He tried to boost his power over city coffers by backing a massive overhaul of the creaky old constitution that governs the city. While he has made some gains under the new City Charter, adopted by voters last year, he did not win the outright fiscal control enjoyed by powerful chief executive officers of private companies.

But Riordan is not somebody who gives up easily. The fight over who holds the purse strings goes on every day at City Hall, in subtle and not-so-subtle ways.

Last week, Riordan vetoed the council’s decision to leave the city’s risk management and revenue projection functions with the city administrative officer, instead of placing the responsibilities with the newly formed Office of Finance.

The move is significant because the head of the Office of Finance, which was created under the new charter, would report directly to Riordan. City Administrative Officer Bill Fujioka reports to both the council and the mayor. Riordan has made it clear that he would like to fire Fujioka, who the mayor and his staff believe is too cozy with council members.

“This is part of a larger problem,” said Councilman Mark Ridley-Thomas, an outspoken Riordan foe. “It’s part and parcel of the mayor’s attempt to reduce the council’s scope of influence. He’s a creature of the venture capitalist game. This is like a culture shock for him, something he has never been able to overcome.”

Riordan says his approach will ensure the best financial health for the city.

“These efforts are essential for protecting city assets,” the mayor said in his appeal to the council on the risk management issue. “Well over $100 million is now paid out of our city treasury each year” in settlements of claims against the city, in verdicts and judgments, and in workers’ compensation payments.

The Office of Finance--working on behalf of the mayor--would coordinate all of the city’s risk management policy implementation efforts in an attempt to save millions of dollars, Riordan noted.

Suspicious of the mayor’s motives, however, city lawmakers are calling on their colleagues to override Riordan’s veto in a vote Tuesday.

When rejecting Riordan’s request on the matter, council members argued that it was better to leave the risk management function with the CAO, if for no other reason than to keep the council in the loop.

“In terms of accountability and teamwork, leaving these issues in the CAO’s office is good government,” said Councilwoman Laura Chick. “The CAO’s office is the one and only link to bring the mayor and the City Council together as a team to solve these problems.”

Privately, council members and staff groused that Riordan was just pulling another power grab.

“He just wants to win,” one official said.

Riordan’s staff bristles at the allegation.

“It’s not about winning,” said Jennifer Roth, Riordan’s budget and finance director. “What we are hoping to achieve is a more sensible form of fiscal management of the city.”

The Office of Finance issue was one of several hotly contested debate points in the closing months of the charter reform deliberations.

The city’s elected charter reform commission had proposed dismantling the city administrative office and scattering some of its functions throughout the bureaucracy. That approach, favored by Riordan, would have consolidated some finance functions in the mayor’s office.

But the appointed charter commission took a different tack, supported by then-City Administrative Officer Keith Comrie. That commission largely proposed keeping the city administrative office intact, though it did redefine and rename some of its functions to emphasize its role as an agency charged with analyzing data and reporting to both the council and mayor.

When the two commissions hammered out their final proposal, they agreed to create an Office of Finance, but that entity was given limited power. In essence, the office and its director inherited the authority to collect revenue--a job that formerly fell to the city clerk--and to develop revenue policies.

For the mayor to contend that risk management should come under that office, former charter commissioners say, is a reasonable argument, but one that he already lost in the charter debate.

“He did not win this at the charter commission level,” said George Kieffer, who chaired the appointed commission on charter reform. “He fought this battle hard and lost it.”

And there are other points of contention.

When city officials were struggling to come to grips with the enormity of the Rampart scandal several months ago, a number of council members proposed giving the Police Commission a blank check to investigate the allegations of police misconduct.

Riordan’s office, however, complained that the mayor should be the one to propose the funding for the commission. The council members backed off and allowed Riordan to take the lead before they adopted a plan to allocate more than $1 million to the commission.

Shortly after that skirmish, Riordan proposed using the city’s tobacco settlement funds to pay for an anticipated $125 million in settlements and judgments in the Rampart scandal.

The council rejected that proposal, siding instead with Fujioka, who proposed using judgment obligation bonds and other debt financing to pay for the anticipated settlements.

Undeterred, Riordan incorporated use of the settlement funds to pay for Rampart in his proposed 2000-01 budget. The council is expected to reject the tobacco fund option yet again when it finalizes the city’s budget later this month.

City Hall insiders do not expect the acrimony to end any time soon.

Fujioka--who was hired by the mayor in July--believes Riordan will try to fire him again sometime this summer. The mayor now needs 10 council votes to oust the council-friendly CAO. But in July, when the new City Charter takes effect, the mayor will need just six council votes, setting into motion yet another political struggle.

“There’s real bitterness on both sides,” said one observer. “There’s clearly an effort to one-up each other. Part of it now is they don’t like to see the other one win.”

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Times staff writer Jim Newton contributed to this story.