IN BRIEF

In a major setback for harbor-area secessionists, a study released Friday concluded that San Pedro and Wilmington would have to slash services if they break away from the city of Los Angeles.

The harbor area generates $123.8 million in revenue annually, which is $34.5 million less than Los Angeles now spends to provide services there, according to the study, conducted by a private consultant for the Local Agency Formation Commission. The deficit would compound to $109 million after three years, it said.

“It is unlikely that a new harbor city would be financially viable without identifying viable additional sources of revenues and/or reductions in expenditures.” The ability to balance a budget is “highly uncertain,” the consultant concluded.

LAFCO can put a cityhood measure on the ballot only if it determines that the new city would be financially feasible and would not harm what remains of Los Angeles. The study indicates that the harbor cityhood proposal is likely to fail on all tests.

As it did with a companion proposal for San Fernando Valley cityhood, LAFCO’s latest report abandons plans for a wholesale split of city government. Instead it proposes that a new harbor-area city would contract with Los Angeles for virtually all city services for at least the first three years of independence.

Under the LAFCO plan, as well as the plan promoted by secessionists, the port would remain part of Los Angeles.

With most services provided by Los Angeles, the harbor area would have a bare-bones staff of five part-time council members and 11 support positions, including a city manager and city attorney. The only way the area could maintain current levels of service would be for Los Angeles to subsidize its budget.

LAFCO has asserted that it could require Los Angeles to contract with the breakaway cities, though not at a loss. But some city officials have challenged that argument and have contended that contracting with Los Angeles defeats the purpose of secession.

“This isn’t providing anything different,” said harbor-area Councilwoman Janice Hahn. “It sounds like we’re going to get less of the same thing.”

The study was denounced by Andrew Mardesich of the Harbor Study Foundation, the leading group supporting creation of a new city of 161,000 people.

He said the report’s recommendation that all services would be provided by Los Angeles runs counter to the proposal of cityhood backers that the new municipality take over most services and contract others out to the best bidder.

“I’m in a state of shock,” Mardesich said. “I’m truly outraged by this. They have totally ignored our proposal.”

Mardesich said the budget shortfall identified in the study could be closed if the new city took over many city functions and provided them more efficiently. Contracting with the Sheriff’s Department for policing, for example, could save $20 million annually alone, he said.

Because it does not believe the LAFCO report fairly addresses the potential of a harbor-area city, the foundation plans to submit its own financial analysis that Mardesich said will show the new city is viable.

LAFCO found, however, that even if savings are achieved through a contract with the sheriff, further cutbacks would be required to balance the budget. To give an idea of the scope of cutbacks, LAFCO estimated that 250 Los Angeles employees serving the harbor area would have to be assigned to other service areas.

“This assumed reduction would eliminate several city departments that currently serve the harbor, which would most certainly decrease the level of that particular service in the harbor,” the study found.

The consultant decided to base the analysis on contracting with Los Angeles because secessionists had not provided a detailed enough plan for their own government, and Los Angeles officials had raised concerns about dividing assets and employees as part of the breakup.

The draft comprehensive fiscal analysis was drawn up by the consulting firm Public Financial Management Inc. LAFCO will hold public hearings on the study before finalizing the analysis and deciding whether to put the cityhood measure on the ballot.

Los Angeles Mayor James K. Hahn, a resident of San Pedro, supports giving residents a chance to vote on the issue, regardless of what the study says, but he also supports keeping the city together.

Councilwoman Hahn, the mayor’s sister who also lives in San Pedro, said she would probably support putting the issue before voters, but she said the study provides convincing arguments for harbor-area residents to vote against secession.

“The study shows it’s going to mean a reduction in basic city services,” she said. “That’s what people are unhappy about now, the level of basic city services.”