LA City Council Approves $11.8 Billion 2022-23 Budget – Councilmember Paul Krekorian On His & City’s Priorities

Councilman Krekorian, we do this interview as the LA City Council finalizes the $11.8 billion budget for 2022-2023. As chair of the Council’s Budget Committee, put in context for our readers the city's current fiscal outlook and what it portends for the City’s economic recovery.

Paul Krekorian: I've been the Chair of the Budget Committee now for a decade. I started this role when we were still in the throes of the Great Recession, facing massive revenue shortfalls and budget deficits. From that crisis situation, we methodically chipped away at the structural deficit and reduced the size of the workforce. Through agreements with our labor partners, we were able to not only avoid massive layoffs that had been predicted at that time, but we were able to balance the budget, begin the restoration of services, and establish the largest reserve that the city had ever had.

Fast forward a few years through a very robust economic recovery in Los Angeles to the onset of COVID. We were in a situation where we were breaking records for economic indicators in terms of employment rates, hotel occupancy, traffic through the airport, and traffic through our ports. COVID hit and all of a sudden, I was faced with budget catastrophe: the sequel. We had to, once again, face the prospect of massive layoffs and drastic reductions in services. We were in the greatest crisis the city ever faced in terms of the budget.

Thankfully, because of the hard work over the previous years to develop the large reserve fund, we were able to forestall those most painful and onerous cuts by relying on our reserves. The Budget Stabilization Fund, which was created during my time as chair, helped us ride out the storm until the life preserver came from Washington with the American Rescue Plan. Once we had the commitment of the federal government to provide about $1.3 billion in support for Los Angeles over the course of two budget years, we were able to avoid the layoffs that we were prepared to engage in.

Looking forward, Los Angeles is in the middle of a very strong economic recovery. As a result, we were able to craft an $11 billion budget that again restores a fiscally responsible reserve. It begins rebuilding critical public services, most notably the police department, which will see about an 8 percent increase in budget for hiring. It also increases the Personnel Department, which allows us to expedite the hiring of vacant funded positions in all of the other departments that have seen significant vacancy rates because we haven't been able to hire fast enough as personnel is shorthanded.

There is a strong sense in the budget committee--and I’m confident the full council will agree-- that we need to continue to invest in our economic recovery. Staffing up planning, building & safety, and transportation, and ensuring that we have the people that we need to be able to encourage additional job creation and business development here in Los Angeles is going to be tremendously important to make sure that this is a sustained, long term economic recovery.

California now has a $97 billion in surplus at the state level, which has yet to be allocated. How do you, as the City Council Budget Chair, view that unallocated surplus and what it might do to assist the needs of cities like Los Angeles?

To put this into a little bit of a context, I was a member of the State Assembly from 2006 to 2010. At that time, the entire budget of the State of California was about equivalent to what the surplus is now. The indications are that Governor Newsom and the legislature see the tremendous importance of supporting local government in addressing public safety, the housing crisis, and homelessness. I think Los Angeles and other cities will presumably benefit from appropriation of some of that surplus into those areas.

I have to say, I also understand that the revenue streams of the state of California are mercurial. They're very economically sensitive, and they're so dependent on the state sales tax that gets impacted by relatively small changes in the well-being of a relatively small number of very wealthy people in California. These sorts of surpluses are not necessarily things that we can rely on in coming years. This support that we get from the state of California here will likely be one-time money, which we shouldn't see as being supportive of ongoing programs.

In addition to being an LA City Council member, you also serve as the San Fernando Valley's representative on the Metro Board, which recently approved the NoHo-Pasadena BRT line. With the Valley’s all-electric Orange Line serving as Metro’s most popular route, what is the promise of Noho-Pasadena BRT to expand mobility and transit-oriented economic development opportunities in your Council District? 

Way back when I was president of the San Fernando Valley Council of Governments, this connection between the San Gabriel Valley and the San Fernando Valley was one of my top priorities. Through the bottom-up process of gathering stakeholder engagement throughout the Valley, this was clearly on everyone's mind as a very important missing piece of the county-wide transportation puzzle. The idea of a direct connection that would support the Orange Line, the Red Line, and connect with the Gold Line in Pasadena seemed like an obvious piece that was missing. The people in the Valley really wanted to see this happen along with the upgrades to the Orange Line, the East Valley Transit Corridor, and the upgrades to Sepulveda Pass, which is why the Valley voted for Measure M.

I see a great opportunity in this line, both for point-to-point mobility, but also for placemaking. We've seen the great success that the Orange Line has had by far exceeding all predictions of ridership. BRT will, in some ways, be even more successful because it is not on a segregated right of way, but it actually engages the surrounding community. Where the stations are located, there will be a great opportunity for those areas to become more walkable and transit friendly and welcome additional commercial and housing development that will make these places more vibrant destinations. 

In addition to the approval by Metro of the Noho-Pasadena BRT, the East San Fernando Valley light rail line last week was slated to receive $1 billion dollars in federal funding. What is the promise of this light rail line?

This is a historic step forward for the Valley. When my mom was growing up in the Valley, we had rail lines criss-crossing the entire valley. Since the early 1960s, that has no longer been the case. When we were campaigning for Measure M, I often said there were 100 rail stations that Metro operates in the county of Los Angeles, and exactly two of them were in the San Fernando Valley, the home of 2 million people. It was an absurd lack of transit resources that the Valley had received in Measure R and all previous commitments.

The East San Fernando Valley line will be the return of light rail to the San Fernando Valley. It will be an opportunity for people from Sylmar to Van Nuys to be able to connect to the Orange Line and the rest of the county. Again, the addition of transit to that corridor is an incredible opportunity for economic development. This is not just an opportunity for people to get access to transit; it's also an opportunity for transit to spark investment and development to uplift that entire community.

Because of Metro’s broader policies around transit plans, it will come not just with transit. The construction of that line will also come with local job creation through the local hire program, procurement opportunities for local businesses, commitments to develop the surrounding areas where Metro has property with affordable housing, and an investment in increasing the tree canopy in an area that doesn't have enough tree coverage.

We still have a ways to go. We don't have the full funding grant agreement in place yet, but I believe at this point, it’s almost a foregone conclusion. We're certainly going to be ready to begin on phase one.

Pivoting to another priority of yours, in April, the L.A. City Council unanimously approved a motion you introduced instructing city departments to take serious actions towards citywide comprehensive waste reduction. How well is the City of LA currently addressing single use plastics and waste reduction?

The entire world, especially the United States, is just awash in single use plastic waste. The result of it is that we see beaches and islands around the world destroyed by plastic and sea life and birds who are dying from ingesting plastic. As important as that, we see consumers being saddled with the cost of packaging that essentially keeps the petroleum industry in business now that we're electrifying the transportation sector. It is an environmental and economic catastrophe for the world.

Los Angeles has led the nation in sort of one-off approaches to addressing this with the plastic bag, plastic straw, and plastic utensil ordinances that are intended to address that part of the problem. I felt we needed to get our arms around a more comprehensive approach to waste. The city, working with the County, has developed this working group to implement the policy approaches that are most likely to have a significant impact on the overall problem and are most likely to be implemented.

This particular ordinance will include changes in the city's own procurement and use of single use items at its events and facilities, but it will also look more comprehensively at ordinances that deal with things like packaging, takeout food materials, expansion of the bag ordinance, and so forth.

The big point of this is to change the way people think about stuff. The solution to this problem is not just throwing your stuff in the blue bin; it's not using as much in the first place. If that's not our new way of thinking, we're never going to get out of this problem. We’ve only recycled 5 percent of the plastic that's ever been produced. It's only gotten that much more challenging because of the Chinese policy of not accepting most plastics anymore for recycling.

Under the chairmanship of L.A. City Councilmember O’Farrell, the Council’s Energy and Climate Change Committee has been seriously implementing LA’s ambitious LA100 plan. What specific steps is the city taking to ensure it will, without the lights going out in between, meet its targets for achieving 100% clean energy by 2035?

Well, this has been a long road. LA100 began with a motion I introduced six years ago along with Councilmember Bonin. At that time, I was told by at least one of my colleagues that 100 percent clean energy would be impossible ever to achieve.

The point of LA100 was to do the hard work of actually assessing the physics, economics, and infrastructure needs of being able to achieve that. With the greatest experts on energy in the world at the National Renewable Energy Lab and millions of super computer modeling calculations, we determined that yes, this is absolutely feasible through different approaches. With leadership of Councilmember O’Farrell, myself, and others, we expedited the goal to get to 100 percent clean energy and we know, from LA100, what it's going to take to get there.

The point about keeping the lights on is one of those hard questions that a lot of times people who advocate for renewable energy don't want to spend a lot of time answering. The truth is the bulk of our renewable portfolio is intermittent.

We have to figure out more advanced storage. We have to figure out what other sorts of clean fuels can we use for that dispatchable power. As we're speaking, the Council voted to pursue a Department of Energy Grant for a green hydrogen hub here in Los Angeles. There are a lot of issues with hydrogen that will have to be answered, but there's no better place to be answering those questions than a place of innovation, vision, and absolute commitment to clean energy like Los Angeles.

Continuing electrification of the transportation sector is absolutely imperative to get to LA100. That's why we pushed forward with the EV Master Plan, both to encourage and require procurement of electric vehicles by the city, but also to invest in the infrastructure that the city and the public will need to make sure we have the most robust possible EV sector.

You also have introduced a motion requiring building owners in the City of Los Angeles to reasonably fireproof vacant structures. What’s the reasoning behind that motion?

In my district and throughout the city, we have had a recurring challenge of buildings that are kept vacant by property owners. At the same time, we are confronting the challenge of having tens of thousands of people who are living unhoused and unsheltered in the city. When you have those two things happening at the same time, the natural result will be that you're going to have people trying to shelter in some of those empty and vacant buildings. What we've seen repeatedly is that when that situation arises, it also often includes cooking and other things that have resulted in destructive, potentially deadly fires.

The first line of defense in preventing that is to have the property owner securing buildings. Then, the next line of defense is having the property owners protect the building from fire. If they can't do the first one, they're going to need to do the second one in order to avoid this public safety risk. I introduced a motion in January to initiate an ordinance that would require property owners to install and maintain fire life safety equipment and enhance security measures once a building is vacant more than 180 days. If you can't do anything with your property for more than 180 days, you better at least protect the community from the natural result of keeping that property vacant.

We've also taken other steps to ensure that the fire department, building and safety, and other departments are properly staffed and funded to be able to address and prevent this problem. We included, in this year's budget, heavy equipment for the fire department to be able to knock a vacant structure down quickly when a fire is burning. It's a problem that's going to be with us for a while as long as buildings are sitting vacant, so we're going to need to address it.

Finally, what are your thoughts both on how best to address the city's dwindling supply of affordable housing and on the role of LAHD in ameliorating that problem and facilitating more such housing?

Unquestionably LA needs a lot more housing stock at all price points. We are one of the least affordable housing markets in the entire nation, and the trends are not going in the right direction. We need to build more in the first place.

We also need to figure out ways to change our housing models. Younger generations are not looking for the same kinds of things that people were looking at when I was growing up for their housing. That gives us an opportunity to think differently about how we build, what we build, where we build, and how densely we build in certain areas.

 At the same time, no matter how much we build, that is only going to be part of the answer in bending the arc on affordability. We're going to have to find more ways to ensure that our affordable housing fund is properly funded, so that we can subsidize affordability. We're going to have to do more to preserve and extend affordability covenants in existing buildings. We're also going to have to do a heck of a lot more to ensure that we get continuing housing support from the federal government and to ensure that people who hold federal and other vouchers are able to find a place to live without discrimination.

Those are a few of the many steps that we're going to need to take to ensure that future generations feel like they can have a future in Los Angeles. If we're going to have a stable community, be a vibrant city, and be a place that's forward looking and optimistic about the future, we're going to have to address that problem.