For the dozens of Southern California cities facing deep financial woes, from San Diego to Montebello, from Duarte to the city of Los Angeles itself, the last 12 months have been a serious wake-up call. When Vallejo declared bankruptcy back in 2008, California’s municipal governments looked on with empathy but still thought, that’s not us; that can’t happen to us. But then it did happen — in Mammoth Lakes, Stockton and San Bernardino, as well as several other cities and towns across the country.
The similarities among insolvent cities are glaring: budget cuts, increasing expenses and decreasing revenues, unemployment, pension liabilities, California’s housing boom and bust, and Gov. Jerry Brown’s decision to dissolve local redevelopment agencies this past February are leading to cutbacks in community programs, key personnel and valuable services. City councils across Los Angeles County are being forced to make difficult decisions that no one in government wants to make: reducing law enforcement; increasing fees; reducing landscaping, graffiti removal and other beautification programs; eliminating community programs; and closing community centers, such as libraries and public pools.
When staring down the possibility of closing a fire or police station or laying off hundreds of city staff members, cities are viewing bankruptcy as a viable option, which worries many analysts.
“People are waiting to see whether these (cities) are the exceptions to the rule or whether we have a new trend,” Jim Spiotto, a Chapter 9 bankruptcy specialist at the law firm of Chapman & Cutler in Chicago, told the Huffington Post recently.
So what comes next for the county and its cities on the brink? Namely, a careful look at fiscal responsibility, newfound government transparency and an unwavering sense of community so basic services can be maintained and faith in public policymaking can be renewed.
City officials need to come back to the community that elected them, be transparent with the constituency; determine where priorities lie; and educate the public on the most effective ways to raise revenue and prevent further cuts in staff and services, which may very well be increases in taxes or fees.
The new goal for cities should be to create an environment where residents fully understand and are actively a part of the process for their city’s short-and long-term financial decisions. By utilizing careful messaging, identifying and reaching out to likely voters, building coalitions of support, organizing community meetings, harnessing social media and reaching the public on a grassroots level, Southern California cities can successfully create a more inclusive and open government and engage the community in a way that has never been done before.
And still, there might be other options to raise revenues or decrease expenditures. Cities might want to consider establishing business improvement districts and/or community improvement districts, which are effective tools for financing changes that can enhance a business climate, create jobs, and increase tax revenue and property values, beyond what the city government is obligated or able to provide.
Saving revenue
In numerous county neighborhoods – from Hollywood to downtown Los Angeles to East Long Beach – these non-profit organizations have helped raise money to fund direct improvements to the area, from crime reduction to beautification programs, reducing or eliminating the need for services that were being provided by the city, thus saving revenues that could be spent elsewhere.
BIDs and CIDs empower the residents and business owners, giving them a stronger voice and better control over how money is spent to directly benefit the community in which they live and work.
Or, instead of raising taxes, perhaps local cities can look at other financial opportunities sitting right before them, such as banding together in a larger effort to collect what has amounted to millions of dollars in uncollected receivables from parking tickets.
While only time will tell if more municipal insolvencies are on the horizon for Southern California, the recent bankruptcies seen locally and nationwide should be a wake-up call for all county communities to re-examine their affairs immediately, before the problems become too large to fix.
Every local community is facing challenges right now. As business owners and residents, we’re all familiar with cutbacks, the struggling housing market, and the frustration of tax and fee increases. However, many of us in the county are also finding solidarity in tough times, reaching out and reconnecting with our neighbors and local government officials to see how we can roll up our sleeves to make real improvements.
In the coming months and years, as California’s cities continue to climb out of the financial holes so many have fallen into, the key factors will be honesty and integrity, responsibility, transparency and, perhaps most important, solidarity. We must work with our local government officials to find viable answers; cities must listen to and educate the public about possible solutions. Cities must reconnect with their constituencies; residents must remain committed to investing in their city’s future.
Rod Wilson is president and chief executive of Pacific Research & Strategies Inc. in Long Beach and is president of the East Anaheim Street Business Alliance Business Improvement District, which includes more than 500 businesses in East Long Beach.
