Business groups are blasting a proposal to create a city health department, saying it would delay inspections for restaurants, food manufacturers and others, and cost the city a fortune that could only come from more taxes or fees on businesses.

The Los Angeles Area Chamber of Commerce, the Valley Industry and Commerce Association and the Los Angeles County Business Federation in recent weeks have announced that they will oppose an initiative sponsored by the AIDS Healthcare Foundation that is scheduled for the city ballot next year. They say the city of Los Angeles cannot afford to spend hundreds of millions of dollars a year on a new health department and that businesses will see huge increases in fees as a result. They also fear that it would create intolerable delays for tens of thousands of local businesses such as restaurants that need to get health inspections and permits.

“With the city having no money to set up a health department, how are inspectors going to get hired and trained in time?” asked Stuart Waldman, chief executive of Vica. “And how long would business have to wait to get health inspections? And where will the money come from? We fear it will come from new fees and taxes on businesses and residents.”

AIDS Healthcare, a Hollywood organization with international offices that advocates on AIDS issues and contracts with the county to provide services to patients with AIDS and HIV, has said Los Angeles County would simply transfer the roughly $200 million it now spends to cover the city of Los Angeles to the city and that no additional fees or taxes would be required.

But according to the city’s budget office, the annual cost for a city public health department would be at least $333 million and that only about $72 million in county money can legally be transferred, leaving a gap of at least $261 million.

The foundation declined to comment for this article because of a dispute over coverage of the organization by the San Fernando Valley Business Journal, a sister publication.

AIDS Healthcare filed the initiative to create a separate city health department early this year, a move that stems from its ongoing dispute with the county’s Department of Public Health. The county has alleged that the foundation overbilled for its services and is calling for an in-depth audit. The AIDS group has sued the county, alleging that the county has misspent money by going after it and other organizations that have criticized the department. The suit is pending.

In filing the initiative, foundation President Michael Weinstein said in a statement that the county health department is a “calcified institution” encumbered by bureaucracy.

“With this measure we wanted to spark a public conversation on public health, and now we are going to have it,” Weinstein said.

The initiative states that three other cities in the county – Long Beach, Pasadena and Vernon – have their own health departments and that those departments “are better able to address the needs of these individual cities.”

Randy Gordon, chief executive of the Long Beach Area Chamber of Commerce, said businesses in his city have not had major complaints about Long Beach’s public health department. In fact, “the department has maintained a great reputation in our city.”

The AIDS foundation and other initiative proponents gathered 70,000 signatures, nearly twice the amount needed to qualify for the next year’s statewide primary ballot next June. When the signatures were presented to the City Council this June, the council could have adopted the initiative immediately and created the department. The council voted to place the measure on the ballot but filed a lawsuit challenging its validity. That lawsuit is pending.

Growing alarm

Meanwhile, local business groups have grown increasingly alarmed about the prospect of a city-run health department, with the Business Federation, or BizFed, board voting Aug. 20 to oppose the measure.

Local hospitals also oppose the initiative. The Hospital Association of Southern California contends it would result in higher fees for permits and inspections at hospitals and could even lead to confusion over reporting communicable diseases.

Because the city does not have a health department, the county now provides those services within the city limits, including giving the familiar A, B and C ratings to restaurants. Under the initiative, restaurant inspections within city limits would be done by the new city health department along with inspections of hospitals and food-making businesses.

Local businesses don’t complain much about the county, but they have long criticized City Hall – especially the planning and building and safety departments – saying it takes way too long to get routine permits and inspections. They fear the same slow-footedness would affect a new health department.

There have been numerous failed attempts over the years to streamline the city’s permit process. A recent express permit program for restaurants has been a rare success.

One local restaurant co-owner said that adding in a whole new department would be a recipe for disaster.

“With the city of Los Angeles, things almost never go well,” said Jeff Kavin, co-owner of Greenblatt’s Deli in Hollywood. “The city is unable to competently provide and manage the services it is supposed to deliver now. The city can’t even maintain the streets and sidewalks or even regulate the marijuana shops. And now we’re talking about setting up a whole new massive department?”

Among other things, the new health department would have to hire and train enough workers to inspect more than 7,000 sit-down restaurants and tens of thousands of other establishments – from gyms to hospitals to food manufacturers – that under state law must have health permits to open and then pass annual inspections to continue operating.

Specific language in the initiative bars the city from hiring or contracting with any county health inspectors, so the hundreds of new inspectors would have to come from elsewhere.

The initiative states that a new health department must be fully operating within 120 days after voters approve the initiative, a timeframe that business groups called laughable.

“This whole proposal is ridiculous, especially the idea that the city will hire and train everyone within 120 days,” said Gary Toebben, chief executive of the L.A.-area chamber.

Vica’s Waldman said he fears that it could be one to two years before a new city health department is fully staffed, and that in the meantime, businesses will face long delays in getting required health inspections and permits.

“If I want to open a restaurant in Los Angeles and it takes a year to get a health inspection with this new city department, I’m going to give up and look for somewhere else,” he said.

Deli owner Kavin said he’s concerned that if he ever wanted to remodel or expand his restaurant, he could face long delays.

“Any delays for the approval of remodeling changes would be a huge problem for the industry,” he said.