Miguel Santana: A Respected Public Servant Moves Forward

TPR is honored to have you with us in your new role as president of Fairplex, which hosts the Los Angeles County Fair. To commence: What enticed you to leave the city of LA and take this new position?

Miguel Santana: I loved being CAO of the city of Los Angeles. We went through some difficult times, but we’re now starting to deal with some of the structural problems and quality of life issues.

What attracted me to this new position is the fact that Fairplex is a 500-acre campus with an established history of nearly 100 years, and with a tremendous amount of potential for its future.

The campus is at the nexus of the San Gabriel Valley and the Inland Empire. Six million people live within a 30-mile radius around the campus, and three million people go to the campus every year. It’s part of the LA fabric, and it’s a public asset.

The majority of the campus is owned by the county of Los Angeles, and it’s managed by a private non-profit organization, which is Fairplex. My public sector experience of more than 25 years is relevant to the future of this asset. 

Los Angeles was at one time a significant agricultural county. Share the history of the county fair, and its evolving plans for the 21st Century. 

Ours is still the largest county fair in the country. Agriculture is definitely part of our history, and, I believe, part of our future—it just looks different in 2017.

Today, we are more mindful about the sourcing of our food. There’s a movement toward urban gardening. And there has to be a real effort to help young people understand how their food is grown, and to focus on healthy eating and lifestyles.

We don’t want to take away the essence of the campus, but we want to bring it into the 21st century. Fairplex has evolved over the last 100 years from being used strictly for the fair. It became the birthplace of drag racing. It has a childcare center serving nearly 250 kids, from six weeks to six years old. It has a 250-room hotel managed by the Sheraton, a conference center, two museums, and an actual farm, with rabbits and hens, where we teach kids where their tomatoes come from. We also offer intensive training in craftsmanship, the automotive arts, and a number of other areas.

There is a central theme behind these diverse parts of the campus. The essence of a fair is that it’s a place where people develop, learn about, and share the things that they’re passionate about—whether it’s quilting or baking or cars or ceramics. The campus has evolved into a place that celebrates people’s passions. Agriculture is an important part of that.

That brings us to Fairplex’s 2017 Strategic Planning Process. How are you proceeding? 

The strategic planning process is about asking three things: Why is it that we are engaged in these activities? How do those activities get presented today? And how should we present them into the future?

We’ve structured the plan by topic; food and agriculture will be our first. We’re going to talk about our history of agriculture, how it’s reflected in the farm we have today, and what it will look like into the next 100 years, as our region becomes more urban.

The next conversation will be about education and craftsmanship. Education is one of our core values; it’s critical to our mission. We’ll be asking: How did we come to provide the educational services we do? Going forward, how are we going to expand our capacity to complement the education system and prepare the next generation for the jobs of the future?

Preparing for the future is about building the capacity in individuals and helping them unleash their own potential in areas they’re passionate about. Most young people today won’t end up working in a big corporation. As the economy rapidly changes, they will have to rely on their own brainpower to make a living. So how do we teach our young people those skills?

You were chosen to lead Fairplex in part because of its fiscal challenges: the county is pressing for back rent, and the “excessive” salary paid to your predecessor was of concern to the County Board of Supervisors. How are you addressing these issues?

 Fairplex’s financial picture is significantly different than the one I inherited when I became CAO of the city.  Fairplex is solvent and has strong finances. It has an $85-million budget, which has grown over the years. It makes a surplus of anywhere from $5-10 million on an annual basis, which is reinvested back into the infrastructure of the place.

It has the same structural relationship to the county as LACMA, the Natural History Museum, the Music Center, and other public assets, with one significant difference: they all receive public subsidies.  Fairplex does not. Not a penny of the General Fund goes to  Fairplex. It is a self-contained, self-sufficient organization.

The challenges we face are about how to reconcile our public purpose with our fiscal realities. Do we define success by how much money we make, or by how much public good is generated? I think we should define it by both. Our success will be defined by our ability to balance generating revenue with providing public benefit.

We’re in conversation with the county about the issues raised in the audit. I believe the answers are found in jointly planning for our future, and making this public asset into an economic engine that generates significantly more revenue for the county than the dollars they believe we owe them. We could limit the conversation to a couple million dollars, or we could have a conversation about generating significant property taxes, sales taxes, and other revenue sources for the county, city, and state. The county has been receptive to engaging in this process.

We are focused on the outcomes that we’re seeking to achieve, and on providing clarity as to the public benefit we create.

In the strategic planning process, you’ve reportedly reached out to your neighbors in the community. Speak to Fairplex’s relationship with Cal Poly Pomona, which is also in the midst of a planning process.

It’s a critical relationship. Cal Poly Pomona is one of the strongest members of the California State University system. Its history is grounded in agriculture, like ours, but it’s also the strongest school in engineering and architecture. It is not only a regional asset, but a statewide and national asset.

We’re working closely together on creating a vision for the part of the earth that we share. Because we have a common history and overlapping leadership, and are part of the same city of Pomona, our interests are in many ways tied to each other.

We’re fortunate that Cal Poly is going through a strategic planning process at the same time that we are. We’re working to develop a common set of goals so that our plans don’t compete against each other, but complement each other. We’re part of their process and they’re part of ours.

Let’s take a step back. Upon leaving your position as CAO for the city of Los Angeles, perhaps you penned a letter to your successor. What advice might you have offered? To be more provocative, how should the city’s underfunded structural deficit be addressed going forward?

It’s important for any CAO to stay true to three fundamental principles. The first and most important is independence.

The CAO reports both to the mayor and the council. The public relies on the office for independent analysis. Bond-rating agencies, investors, and the press rely on the accuracy and independence of the information provided. Whoever takes on that responsibility must always maintain that independence.

Being independent doesn’t always make you the most popular person on campus. It doesn’t always win you friends. But it provides a level of reassurance that, at the foundation of any policy pursued by the mayor and the council and understood by all the stakeholders, is independent, accurate, and sophisticated data and analysis. That mission is inherent in the office.

The second primary responsibility is providing, not only an analysis of the fiscal challenges that the city is confronting, but also a path forward. It’s not good enough to say, “Guess what? You have a problem.” It’s the responsibility of the CAO to lay out options—a framework for policymakers to identify solutions.

But it’s not good enough even to say, “This is a problem and here are the options.” The third piece of the CAO’s role, which I took very seriously, is to help build a consensus toward actual outcomes. It’s making sure that the office doesn’t write a report that just sits on the shelf.

That means working in partnership with the city council, neighborhood councils, the mayor, labor, and other stakeholders to find a path forward. That’s not easy work. And it has to be done, not only around finances, but also on big policy issues such as homelessness, infrastructure, and other parts of what the city does.

Success is not defined by simply balancing the books. Success is defined by balancing the books and still providing service to the community—the reason the city exists in the first place.

If whoever takes on the job stays true to those three principles, then the city will be in much better shape.

In your many interviews with The Planning Report as CAO, you were always crystal clear on your recommendations for balancing the city’s budget. Given that some of your recommendations have met resistance and ultimately failed to materialize, how would you now recalibrate the actions necessary to address the city’s structural budget deficit?

The city pursued pension reform of the three pension systems: DWP, Public Safety, and civilians. The civilian pension reform was challenged by labor groups who started with the premise that we didn’t have a pension problem. It wasn’t simply that they didn’t agree with our reform; they felt that there shouldn’t be any. Yet today, through negotiations and settlement discussions, a resolution has been reached and all three systems have been reformed.

The city also reduced the size of its workforce by 50 percent. Some positions were pushed to other departments, but those that were eliminated were not rehired. We have pretty much maintained that level of staff.

Now, the plan to update the general and community plans on a six-year cycle is, in effect, a hiring decision. And it still doesn’t have a revenue stream, so the general fund will become that. At the same time, the city has a commitment to maintain 10,000 officers and to restore certain services. All of these decisions require are tradeoffs; that’s where policy gets made.

Part of the role of any organization is to lay out a path forward and constantly refresh it based on the latest information. All a budget is, frankly, is a plan. It makes assumptions about revenue and expenditures. What this city does that few other municipalities do is check in on a quarterly basis on how that’s working. That should continue to happen.

There will always be that element of review and change. For better or for worse, you’re never done.

In November, LA City Controller Ron Galperin released recommendations for better utilization and monitoring of the nearly 9,000 parcels owned by the city. Comment on how an improved asset management system could benefit the city.

The asset management has multiple homes within the city. The Department of General Services oversees the actual assets; they maintain city buildings, empty lots. Several years ago, the CAO’s office issued a report that said, “We don’t know what assets we own, and we don’t have a comprehensive plan for those assets.” At the request of the mayor and the council, a special asset management unit was put in the CAO’s office to develop strategies and principles around the city’s assets.

My office then recommended engaging in a strategic plan to refresh the Civic Center. From that has come the Civic Center Master Plan, which harnesses the organic development already taking place in Downtown through a P3. It’s not just about Parker Center; it looks at the entire campus—including the old Children’s Museum site and the LA Mall—and at the surrounding community.

The asset management program also looked at connecting the issue of homelessness to city assets. The unit identified 12 parcels around the city, from Venice to the San Fernando Valley to South Los Angeles and the Eastside, as potential sites for permanent supportive housing and affordable housing. The council adopted those sites, and in very short order, we conducted an RFP and identified developers. Development agreements have now been approved, and a conversation is beginning with the community about what kind of development should go there.

The Controller’s report said, “This is where the property is.” That was helpful; it’s a basic requirement of a robust asset management program that we didn’t have before. Now, the CAO’s unit is developing a system to look at the quality of each of those properties, how they’re currently being used, and their potential. They are creating a set of policies and objectives for those assets. That’s one of the things I’m proud to have put together in office, and it’s well on its way. 

Leading up to the March city election, Measure S brought increased focus to the question of who is going to be the steward of our built environment. Drawing on your experience, how could the city best integrate its priorities on housing, planning, and fiscal stability?

That’s a particularly hard question in this city, where accountability is horizontal. This city operates best when the different spheres of authority are coordinated and rowing in the same direction.

Los Angeles is a unique breed. It’s not like a corporation or a dictatorship, and it’s not like Chicago or New York. LA operates by consensus. When a vision is laid out—often by the mayor—city departments, the CAO, and the Legislative Analyst have to build consensus on the initiatives tied to effectuating that vision, and work together to implement it.

This all means that it’s harder to get things done—but once everyone is rowing in the same direction, things move very fast. The work that we did on homelessness is a perfect example.

In two years, we went from not talking about homelessness at all to having a special committee on the council, a commitment from the mayor, and a comprehensive strategy in coordination with the county, with clearly identified roles and responsibilities. The city passed a housing bond, and the county approved an increased sales tax for services. All of that happened in two years—yet no one in the city or county is really “in charge” of homelessness. It’s proof that great things can happen if we spend less time talking about how to reorganize ourselves to fix the city, and simply start working together to fix the city.

At the Fairplex, we spent some time in our strategic planning process looking at ourselves in terms of governance. But a conversation about governance and accountability is irrelevant if there’s no outcome associated with it—no content behind it. The conversation should be driven by identifying the problem and coming up with a solution.

If we speak in 2018, what successes do you hope to be reporting from Fairplex?

I can’t answer, yet, where we’re going. But we’re going to define success in terms of being an economic engine for the San Gabriel Valley and the region, training young people for the jobs of the future, strengthening or connections to our agricultural roots, and laying out a vision for a campus where you can live, work, play, and learn, and that represents all of the values of Fairplex.