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    The Mayor's Letter: The Power of Myth

    (April 11, 2004) -- The Mayor of CA's fifth largest city set out to castigate the Long Beach Press-Telegram -- a publication which endorsed her -- for its refusal to endorse four Council incumbents for reelection.

    We consider the Mayor's letter a watershed moment, a turning point.

    We believe part of what she has written is mythology, untrue even if deeply believed. We consider other parts of the letter unjustified.

    Other publications have carried the Mayor's letter, but to our knowledge is the only LB media outlet that has directly challenged the Mayor on her assertions.

    We are glad to have the Mayor directly state her case. She has done so...and so have we.

    The Mayor wrote says
    "[T]he current City Council...has supported the City's [city management's] Three-Year Plan, and has not deviated from the plan."Untrue.

    In August 2003, the Mayor did not dissent in forwarding to the Council a management budget that broke the Three-Year financial plan.

    The Three Year plan devised by City Manager Jerry Miller sought to control City Hall's spiraling deficit, ultimately attributable to Council spending exceeding revenue.

    The Three Year plan said that in FY 04, Council use of one time resources to sustain ongoing spending should be limited to $2.6 million. In contrast, the budget forwarded by the Mayor to the Council from management proposed spending $17.5 million in one time resources.

    And before the budget was done, spending of one time resources ballooned to $19.5 million (which management justified on grounds Sacramento had imposed $2 million in one-time cost items.)

    "In October 2002, the City Council became concerned about the growth in the City's General Fund structural deficit and called for the creation of a Three-Year Plan to eliminate the structural deficit."Half true, inviting a conclusion about Council incumbents that's false.

    In September 2001 -- despite 9-11-01 -- the Council increased spending in the months leading up to 2002 city elections to reelect Mayor O'Neill, Council incumbents Colonna and Kell and the City Auditor (the latter uncontested). The incumbents' supporters claimed that the city was "on the right track"...despite the fact city management warned the Mayor and Council in publicly agendized memoranda of a looming deficit (reported by Council incumbents, without dissent from the Mayor, moved to "receive and file" the warnings.

    Once safely reelected, the Mayor did not dissent when Council voted to boost pensions for city employees. That action has now saddled LB taxpayers with devastating long-term consequences. The Mayor's letter doesn't even mention this vote (leaving us to wonder if she's ashamed or proud of it.)

    In August 2002 -- just weeks after the Council's devastating pension vote -- the Mayor and (soon to be former) City Manager held a somber news conference to announce that City Hall faced a huge deficit.

    In September 2002, Councilmembers moved to fire the City Manager and subsequently asked new management to deliver a plan to get them out of their hot water. In Sept. 2003, Council incumbents broke the Plan, overspending its restrictions on one time resources by roughly $15-17 million (depending on how it's reckoned)

    "The General Fund has had a structural deficit for approximately 15 years, and this is the first City Council to deal with this issue in a long-term, strategic way."Self-devastating. Most of the following occurred during the O'Neill administration (which took power in July 1994). Text source for the following: Evaluation of Financial Condition by Len Wood and Associates, agendized at July 1, 2003 LB City Council meeting:

  • During 10 of the 11 years between 1993 and 2003, the City adopted a structurally unbalanced budget.

  • Between the period from 1993 to 2003 the City appropriated $86,589,000 more in expenditures than it appropriated in current revenues.

  • In 2003, the City appropriated and approved, $368,163,055 in expenditures. On the revenue side, the City budgeted $361,336,443. The budget was out of balance by $6,826,612.

  • Over these years, the City has balanced the budget by using carryovers (unspent monies and unanticipated revenues), reserve funds and other one- time financing sources.

  • New and increased revenues were used to enhance existing programs as well as funding new programs rather than applying these monies to reduce the structural deficit.

  • From 1996-97 through 2002, General Fund expenditures were increased between the proposed budget and final budget. This trend was halted in 2003, when the adopted budget was $368,964 lower than the proposed budget.

  • While the cost of programs have increased, General Fund expenditures and revenues have decreased when adjusted for population and inflation.
  • "The City's Three-Year Plan and related budget actions were reviewed with the major municipal credit rating agencies resulting in the City's continued AA/AA- bond credit ratings. These ratings illustrate the confidence the financial community has in the leadership of the City of Long Beach to address and resolve our fiscal challenges."Silly. The fact that LB City Hall can borrow more money doesn't justify years of deficits that overspent beyond revenue.

    In his Evaluation of Financial Condition of the City of Long Beach, independent civic fiscal expert Len Wood wrote:

    "This report addresses the City’s financial condition...The City of Long Beach General Fund has a major structural imbalance. Simply stated, ongoing revenues are insufficient to provide the dollars needed to support ongoing programs. For several years, this problem has been masked by the use of one-time revenues to close the gap. This has created a false impression of solvency...

    "During the recent years, Long Beach has maintained cash and to some degree, budgetary solvency. Cash solvency has been maintained due to the City’s healthy cash flow. This has enabled it to meet current obligations without borrowing. Unfortunately, while budgetary solvency has been achieved, it has been done through the use of one-time financial sources. Long-term solvency, however, has not been attained for several years."

    We publicly challenge LB City Hall to produce any correspondence advising major bond rating agencies that in September 2003 LB's Council incumbents exceeded the limits of city management's Three Year Financial Plan by roughly $15-17 million in enacting the current FY 04 budget. That amount explains most of the amount by which the three year deficit ballooned from about $80 million in 2003 to about $105 million now.

    "In my 10 years as Mayor, and in my prior career and years of involvement in the City of Long Beach, I have never seen a newspaper exhibit such apparent disdain for all elected officials."A brush-back pitch.

    Holding public officials accountable isn't disdain. Reelection isn't an entitlement of incumbency.

    The Press-Telegram has been extraordinarily kind to the incumbent Mayor, arguably too kind. Among other things, they endorsed her reelection.

    We also noticed that the Mayor's letter came from her City Hall office...and was even cc'd to City Hall's Public Information Officer.

    We think the Mayor's letter was obviously political and was not city business. Prove it yourself. Do you think Mayor O'Neill could declare the following from her Council chair during a Council meeting?

    "The four City Councilmembers up for re-election, Dan Baker, Dennis Carroll, Laura Richardson and Rob Webb, as well as the entire City Council, have a comprehensive understanding of this [budget] process and the challenges we face -- the learning process took a long time...Now is not the time for a change in leadership."

    How can this be acceptable using taxpayer resources, when the Mayor silenced and admonished people at the City Council podium who tried to turn that taxpayer paid platform into a political foghorn?

    This is the second time in as many months that Mayor O'Neill acted beyond her powers. In March, after a LB activist uncovered a Mayoral letter to Senator Dianne Feinstein which suggested LB City Hall supported a proposal to build an LNG facility in the Port of LB, and reported the story, Mayor O'Neill conceded it was wrong for her to have suggested that her personal approval implied the Council approval.

    But she didn't back away from her own support for the LNG project. Mayor O'Neill does not back down when she believes she's right.

    Neither should media outlets or voters...who have a duty to compare the Mayor's words with the facts...and hold Council incumbents accountable accordingly.

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