Prop. Q Passage Is Complicated If Secession Succeeds By JACQUELINE FOX Staff Reporter Secessionists were among the loudest opponents of Proposition Q, the police and fire bond measure narrowly approved by Los Angeles voters last month. Now that it’s a done deal, what, if any, of the Valley projects the bond is supposed to pay for will be completed? What, if any, portion of the $600 million bond indebtedness would be assumed by a new Valley city, should a Nov. 5 secession initiative prove successful? The general obligation bonds, repaid by property taxes, are supposed to fund a replacement for the Northwest Valley police station, a new traffic control center in Panorama City and upgrades at other Valley facilities. Funds would also cover construction of a new downtown jail and emergency operations center. But because the bonds aren’t likely to be issued before a possible new Valley city would incorporate, it’s unclear if and how the debt could be transferred to a new municipality, and exactly what percentage of that debt the Valley would be responsible for. There is some question as to whether Los Angeles would still be obligated to issue bonds for Valley-based projects if a new city is formed. Some say the city is locked into completing all of the projects now proposed in the measure and that it would likely opt to negotiate with the new Valley City over division of the debt. Still others say the city isn’t locked in until the bonds are issued, and could decide to restructure the bond program to exclude any projects planned for the new Valley city. Members of Valley VOTE, the group that has led the cause for a breakup, challenged the costs and the timing of the measure during the election campaign, saying it should have been tabled until after a secession vote. They added that previous bond issues were supposed to bring new police and fire facilities to the Valley but never did and, with the city down about 1,000 police officers and crime up 17 percent since 2000, money is needed to put more cops and firefighters on the streets, not build buildings. “The right time to make these decisions as to what facilities a new city would need should have come after Nov. 2, not vice versa,” said Valley VOTE Chairman Richard Close. Close said the Local Agency Formation Commission (LAFCO), the state agency that will ultimately decide whether a secession initiative lands on the Nov. 5 ballot, would likely negotiate a division of the bond debt much in the way it has been negotiating the division of existing assets between Valley VOTE and city representatives. In addition, Close said the promise of future tax revenue bodes well for secessionists because it means the new city might have that much more money available to it, at least on paper, upon its incorporation (probably Jan. 1, 2003). “The bond could actually come back to bite the city of Los Angeles, because that money would be available to the infrastructure of the new Valley city,” said Close. But LAFCO Deputy Executive Officer Sandor Winger said the bonds likely would be issued long after his agency’s job of negotiating a Valley split is finished and the new city would be left to determine on its own what, if any of, its portion of the debt would be. “Prop. Q is now part of the city process, so one must assume that it’s now part of the city’s allocation of funds,” said Winger. “But we won’t get involved because this will all take place long after incorporation.” Winger said the city is obligated by law to issue the full bond, but suggested it could find itself at an impasse with the new Valley city over the issue. The new city could refuse to pay its share of the debt until the upgrades they’re supposed to pay for are underway; Los Angeles could refuse to provide the upgrades until the funds are made available. “The only way that revenue can be taken from the new city is if they receive the services they were promised,” Winger said, “but I don’t know if a new Valley city can challenge the debt. That’s a legal question I don’t have an answer for.” Steve Afriat, campaign manager for the Yes on Prop. Q campaign, agreed the city is locked into the measure’s proposals, including the plans for Valley facilities. But he added that if the new city were to decide not to collect the taxes, it would be shooting itself in the foot. “All the items promised under the measure are already subject to an irrevocable city ordinance, so there’s no way the city can withhold them,” Afriat said. “And I would think, as a Valley resident, I would have more protection with future bonds. Of course, I could (file a) class action (lawsuit) not to pay my property taxes, but why would I want to lose a year or two there waiting for results, while in the meantime the new buildings and upgrades are needed now?” But according to Larry Kosmont, president and CEO of Kosmont Realty Corp. and a Los Angeles-based economic development consultant, the city may actually have a few options. He said, should a new city be formed, Los Angeles could decide to restructure the bond so that it taxed only Los Angeles homeowners and eliminate or put on hold any Valley-based projects. “I believe that, because the debt hasn’t been issued yet, the city could downsize the bond, or do an initial financing for just those projects that would be in Los Angeles and maybe never get around to issuing the other portion of the bonds,” Kosmont said. Another alternative, said Kosmont, would be to restructure the bond but not reduce it, and then use it entirely for projects outside the Valley. And, although he said it was the least likely of possibilities, Kosmont suggested the city could opt to issue the entire bond and enter into some sort of co-payment agreement with the new city. “A co-agreement would seem unlikely to me because today they can’t even get along, so can you imagine a co-payment agreement?” Kosmont asked. Close agreed there is a real need for facility upgrades but suggested the money should have come from the city’s general fund, not taxpayers’ pocketbooks. “No question, it’s criminal the city council found the money to refurbish City Hall, but makes its own police officers operate out of a broom closet,” Close said. “One of the key arguments against (Prop. Q) is that money is needed first to hire more officers, not build new buildings, which would actually take officers off the streets.” The city received $100 million in federal grants in 1998 for training police and fire department recruits, but has come dangerously close to having to return most of the money because, until recently, it hasn’t been able to hire the required number of officers to qualify for the money. So far, the city has spent about $4 million of those funds and the grants expire in February 2003. However, Julie Wong, spokeswoman for Mayor James Hahn, said the city now has enough officers on staff to begin tapping the grants. Using the West Valley police station as an example, Wong added that Prop. Q funds aren’t intended to augment those grants, but rather provide both existing and new public safety officers with better resources. The West Valley station was built for a capacity of 92 but now has more than 300 officers and staff sharing the space.
