LAFCO to Release Study on Valley Breakaway

The proposal to wrest the San Fernando Valley away from Los Angeles is expected to move significantly forward this week with the release of a long-awaited report on whether a new city would be fiscally sound.

Planners for the state commission overseeing Valley secession have been closed-mouthed about their report, but others involved in the process said they believe the document will conclude that a new city would be financially viable.

If approved by the Local Agency Formation Commission next month and sent to voters in November, the report would become the blueprint for a Valley city, setting its boundaries, drawing its council districts and establishing its budget.

As of late Wednesday, LAFCO Executive Director Larry Calemine was still working on the report, which he said will probably be released Friday morning. It will be presented to the LAFCO board next Wednesday, but the board is not expected to vote on it until mid-May.

“This is going to be the whole banana,” Calemine said of his report, which has been in the works for 21/2 years and has cost more than $2 million in staff time and consulting fees.

Similar studies are ongoing for the harbor area and Hollywood, where secession movements are also active. The commission has indicated that it hopes to complete work on all three proposals in time to place them on the November ballot, although recent reports have indicated that the harbor area may not be financially healthy on its own.

Final reports on the harbor area and Hollywood are expected to be ready within two months.

In his report, Calemine is expected to address the question of how much a Valley city would have to pay Los Angeles after a split. Los Angeles has said it will be left with about $300 million in so-called stranded costs after the Valley leaves, but the LAFCO staff has rejected that argument. Instead, the staff and a commission subcommittee said the Valley should pay $36.6 million, down from an original estimate of $65 million.

Calemine said Wednesday that the figure will change in his report, but that the final number had not yet been worked out. City officials said privately that they feared that the payment would be cut even further, perhaps by as much as $20 million.

Report to Recommend Council Districts

Calemine is also expected to submit a map for council districts. Earlier proposals have recommended 12 to 14 districts. One tentative map drew criticism from some groups that said it did not provide enough Latino-majority districts; Calemine is considering a new map that would provide more.

Also in play is the date that the new city would be incorporated. Calemine said Wednesday that he plans to recommend that a new municipality come into existence on July 1, 2003, the start of the fiscal year. Previously suggested dates were Dec. 16 of this year and Jan. 1, 2003.

Other issues have to do with whether a new city would take possession of certain bank accounts and other assets owned or held in trust by Los Angeles, including parks, libraries and police and fire stations.

Calemine probably will recommend that most of the parks, fire stations and police stations in the Valley transfer to the new city, because both sides have already agreed on that. But it is unclear whether certain funds and other assets, such as Van Nuys Airport, will transfer, because the commission has received conflicting legal opinions about them.

The report also will address a request by secession proponents that a Valley city receive partial ownership of regional assets such as Los Angeles International Airport and the Port of Los Angeles.

“Everyone is on pins and needles,” said former state Assemblyman Richard Katz, a member of the board of the secession group Valley VOTE. “We’re waiting for them to actually decide on terms and conditions [including] what is the ‘alimony’ payment and how we deal with regional issues.”

Calemine said he drew on several sources for his report. The commission’s consultant, Public Financial Management, drafted the fiscal analysis of secession, which concluded that the Valley would be viable on its own and set its annual budget at about $1 billion.

Valley City Would Start With Few Employees

That study envisioned a Valley city with just 19 employees to start, because nearly all city services would be leased from Los Angeles during a transition period of up to three years. Council members would be paid $12,000 per year according to the report, but secessionists have suggested $75,000. Los Angeles council members earn about $130,000.

Calemine also is expected to consider a proposed budget submitted by Valley VOTE. The group has said that it can provide services more cheaply than envisioned by Public Financial Management.

Also in the mix are negotiations between the city and secessionists, and a lengthy report by a LAFCO subcommittee led by commissioner and county Supervisor Zev Yaroslavsky, which suggests ways to divide assets between the two cities and sets other terms for a municipal separation.

Most likely, Calemine said, he will incorporate earlier staff and subcommittee recommendations as well as items that the city and secessionists have negotiated