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Mayor candidates slash rivals for "irresponsible" bankruptcy claim

February 8, 2013 |  5:08 pm

Photo: Los Angeles mayoral candidates second from left, Eric Garcetti, Wendy Greul, Kevin James, Jan Perry and Emanuel Pleitez are introduced before the start of the debate at Loyola Marymount University Tuesday night. Photo: Wally Skalij / Los Angeles Times

The two City Hall veterans leading the mayor’s race pushed back against criticism of L.A.’s finances during a debate Friday, arguing that they had made progress in pulling the city back from the brink of insolvency.

The outsider candidates in the mayor’s race, Kevin James and Emanuel Pleitez, have attempted to cast the three elected officials in the race—City Council members Eric Garcetti and Jan Perry, as well as City Controller Wendy Greuel—as irresponsible stewards after the city’s reserves were drained and its bond rating downgraded following the recession.

During a mayoral forum sponsored by LA5 The Rotary Club of Los Angeles, Garcetti struck an optimistic note when moderator Gray Davis, the state’s former governor, asked whether the city was clear from the danger of bankruptcy.

FULL COVERAGE: L.A.'s race for mayor

Garcetti, who served as council president during that time, listed a series of actions that the council took to lower what had been a projected 2013-14 deficit of more than $1 billion to about $212 million. Among the reductions, he noted, were $220 million in department cuts, $263 million in pension savings, $83 million in salary savings and $61 million in workers' compensation and human resources savings.

“Anyone who says there’s not still more work to do is being irresponsible,” Garcetti said Friday. “Anyone who says we’re right on the edge of bankruptcy is being irresponsible too.

"It reminds me of the preacher in central California who kept saying the end of days was near, and as soon as that day that was supposed to be Armageddon came, he said, ‘whoops, I miscalculated. It was a couple weeks later.’ And when that day came he kept pushing it off. We have done dramatic work in this city, and it is not done and I have led that work.”

Greuel, who was elected controller in 2009, argued that she had already identified a number of areas where the city could save money, pointing to her audits of city cellphone usage and fuel usage. She said she was open to an array of solutions to try to bring down employee pension costs, such as ending pension spiking, capping pensions and raising the retirement ago.

“If we’re at the brink, it is, I believe, a cop out to say we should go bankrupt,” Greuel said. “That’s not the way to deal with the problems the city faces. You need to make the difficult decisions, which is looking at structural change….I’ve worked very hard as city controller to look at the ways we can do things better.”

But James and Pleitez continued to hammer the City Hall insiders, arguing that they were sugarcoating the facts.

“The question  about bankruptcy is a serious question. What is irresponsible is not admitting how close we are to bankruptcy because you want political gain from it,” said James, an attorney and former radio host. “You hear about their records, and they talk about how they’re running on their records. Well, I’m running on their records too, because that’s what caused the crisis that we’re in today."

Pleitez, a former technology executive, said the response from the elected officials showed that they did not grasp the complexity of the city’s finances and its needs.

“Someone should help my colleagues understand what bankruptcy means, right? It means that you don’t meet your obligations and then you ask for bankruptcy protection. It doesn’t mean that you have no money.”

He said the city is running a deficit every year, and homed in on Garcetti’s remarks as reflective of what is wrong with City Hall.

“To say you’re proud of cutting a $1.2-billion projected deficit to a $200-million deficit -– I don’t know about you, but I wouldn’t be proud of saying I cut $1 billion and removed a bunch of [people] from the City Hall, that’s not something to be proud of, that’s not a record to stand on,” Pleitez said.

He also chided the elected officials for failing to fully address the matter during their many years in elected office.

“I want to stop saying that 'I’m going to sit and look at books and look where else I can find waste' because you’ve had over a decade to do that,” he said. “We need a mayor who understands numbers and is unafraid to make that change.”

Perry sought to take the middle ground, offering a sober assessment of the city’s finances while also acknowledging the progress that has been made.

“Bankruptcy, insolvency, whatever you want to call it, our expenses exceed our revenues and projections are still slow, so we have to take this opportunity to reassess and reposition,” she said. “ … we have made some progress, but we still have more work to do.”

Perry said her independence from special interests would allow her to get the job done and slapped at some of the proposals offered by her rivals in the race.

“The hardest part of this is to ask our employees, convince our employees, cajole our employees to make them understand, it is for our mutual long-term survivability and our ability to deliver core city services –- fire, police, sanitation, provide public works to all of you -- that they come back to table,” she said.

“Anything short of that is window dressing -- pension spiking, whatever, those are easy things to do. Creating an additional pension tier for people who have not been hired, that is a simple thing to do. The hardest thing to do is ask employees to come back and do what fire and police do already -- pay 10% to their healthcare costs and 11% on their pensions. It has to be done. It is the most difficult thing to do, and I have the freedom to be able to do that because I am not beholden nor am I leveraged by any particular interest group in the city of Los Angeles.”

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-- Maeve Reston and Seema Mehta

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Photo: Los Angeles mayoral candidates second from left, Eric Garcetti, Wendy Greul, Kevin James, Jan Perry and Emanuel Pleitez are introduced before the start of the debate at Loyola Marymount University Tuesday night. Photo: Wally Skalij / Los Angeles Times

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