$97-million find helps L.A. avoid some cuts

The Los Angeles City Council’s budget committee pulled a rabbit out of its financial hat Wednesday, coming up with enough money to stave off an array of budget cuts without slowing Mayor Antonio Villaraigosa’s plan for expanding the Police Department.

By tapping money from a pending legal settlement and a planned property sale, the council’s Budget and Finance Committee voted to restore funding for library supplies, sidewalk repairs and several cultural events, including Downtown on Ice -- an ice rink installed in Pershing Square each holiday season.

Armed with about $97 million in additional revenue, the committee also killed Villaraigosa’s plan to delay an $81-million payment into the city’s employee pension fund -- a move considered financially risky by some elected officials.

“I thought it endangered the city’s bond rating, which has taken years of careful budgeting to obtain,” said Council President Eric Garcetti. “That’s the last gimmick you want to use.”

The committee forwarded the mayor’s budget to the full council, which is expected to approve it Monday without major changes. After Wednesday’s vote, Deputy Mayor Sally Choi said she was happy to see the committee preserve Villaraigosa’s priorities -- public safety and road repairs.

Although Villaraigosa saw his budget survive largely unscathed, he suffered a setback as his nominee for the city’s top financial post withdrew. Marcus Allen, who had sought to become the next city administrative officer, pulled out amid questions from council members about his salary demands and his ties to City Hall lobbying firms.

In a letter to Villaraigosa sent Wednesday, Allen said he was dropping out for “personal and professional reasons.”

Allen needed the council to vote for him to secure the post. A day earlier, Councilwoman Janice Hahn called his nomination “problematic,” both because of his demand for a $290,000 annual salary and because of his work for two high-profile lobbyists with a wide range of city clients.

Allen’s decision leaves the city with a key vacancy at a critical time. Choi, who prepared Villaraigosa’s budget, is leaving her job to run the city’s pension system.

And although the mayor’s budget cuts more than 700 jobs and eliminates a $406-million shortfall, “substantial deficits are expected in 2009-10 and beyond,” according to Gerry Miller, the council’s top policy analyst.

To get the city through the current year, Miller helped the council identify one-time budget fixes, such as approving the mayor’s plan for boosting residential trash fees from $26 to $36 a month starting in September instead of October. By hiking those fees a month early, the city will take in an additional $8 million, Miller said.

More than half the $97 million in newfound money came from two major sources: a legal settlement with Los Angeles County, which had sued over a planned redevelopment area in downtown, and the pending sale of city-owned land at 1st and Alameda streets, expected to generate $38 million.

Committee members were surprised that their advisors had found so much money at the last minute. “I’ve never really seen more than $50 million” discovered during previous budget deliberations, said Councilwoman Wendy Greuel. The committee made other changes, by restoring:

* $880,000 for cultural activities, including the Festival of Lights, the holiday show at Griffith Park; and El Grito, a Mexican-themed concert

* $1.4 million to pay for Sunday hours at eight branch libraries

* $3.4 million for homeless services

* $18 million for the city’s parking revenue fund, allowing it to pay for a parking garage on Broadway

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david.zahniser@latimes.com