Misuse of trash-fee funds breaks no laws,
only promises

EDITOR'S NOTE - The following was first seen as a LA Daily News EDITORIAL - (You can also download the Controller's Letter and Report below).

July 9, 2008

"From a legal standpoint," says City Controller Laura Chick about the $137 million the city has raised through hiking trash fees, "we believe the funds have been used appropriately."

From a moral standpoint, an ethical standpoint, an honesty standpoint, or a good-government standpoint - well, that's a different story.

In 2006, Mayor Antonio Villaraigosa vowed to hire 1,000 new cops at the Los Angeles Police Department. To do it, he said, the city would need to raise trash fees. Most Angelenos were skeptical, but the mayor and the rest of the city's leaders - including Chick - were adamant that the money would be properly spent.

"Every new dollar residents pay for trash pickup," Villaraigosa promised in a press release, "will be used to put more officers on the streets."

Two years later, Chick has broken down the math to measure the truthfulness of that promise. It wasn't easy. Getting accurate numbers out of the Mayor's Office proved to be a nine-month accounting ordeal.

Now we know why.

In her investigation, Chick learned that the department raised $137 million - nearly three times more than it needed to pay the costs associated with the 405 cops it's hired since then.

So what became of the rest of all those millions?

Most went to cover cost-of-living pay raises for officers and others already on the LAPD payroll. Which should surprise no one, seeing that the council and the mayor agreed to give LAPD employees three consecutive years of pay raises (worth 3 percent or more each) at the same time they ramped up the trash-fee increase faster than they originally proposed.

But that means city leaders used money that they said would go to hire cops for all sorts of other general-fund purposes. And when Angelenos swallowed the trash-fee hikes, they thought they were paying for a department that would be bigger - not bigger and a lot more expensive.

"Probably the public did not think at the time that (the trash-fee increase) was going to pay for raises," Chick now says in a remarkable understatement. "If there were misperceptions or unrealistic expectations that the money was only going to be used for police hires, my report dispels that myth."

Great. Nothing like having politicians' fabricated "myths" dispelled after we've already paid for them.

Still, Chick's legal seal of approval for City Hall's chicanery is nonetheless an implicit condemnation of Villaraigosa's deceptions.

In April - a mere three months ago - the mayor claimed that the trash money was insufficient to pay for more cops. So he pushed for another increase, which the cash-starved council dutifully approved.

But now it turns out that, far from underfunding the new hires, the trash money had produced far more than needed - meaning that either the Mayor's Office massively miscalculated or blatantly lied.

Maybe both.

After all, from the very beginning, city leaders were careful to make sure that even though they promised to use the trash funds to hire new cops, they didn't commit to that in legally binding writing.

The reason is that under state law, fees can only pay for the services provided. The city may raise trash fees to pay for trash collection, but not for any other purpose, such as hiring cops. That would be a tax hike, and thus would need to be approved by a vote of the people.

So city officials did a clever two-step, saying that the funds would be used only to hire new cops, while claiming that they retained the right to spend the money any way they pleased. (A right, they assured us, they would never actually exercise - wink, wink.)

It's that two-step that makes city leaders' decision to use "new" funds to underwrite the same old spending technically legal. And it's that legal fiction that allows Chick - who is usually a faithful watchdog of the public interest - to give her official imprimatur on what's proved to be a deceitful ploy to raise taxes without the constitutionally required vote of the people.

Is it legal? Well, legal enough. Politicians write the laws, so they're pretty good at working around them.

But legal or not, it still stinks.

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Download the Laura Chick
Controller's Letter and Report
(pdf file)

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