Redevelopment Agency Warned Not to Cut Jobs

Intervening to save union jobs, Los Angeles City Council members warned Tuesday they will fight any attempt by the Community Redevelopment Agency board to make deeper staff cuts to balance the agency’s budget.

Although not offering an alternative to patch a CRA deficit, council members put the redevelopment agency board on notice that it will likely face a battle if it tries to cut more positions than recommended by agency staff.

The CRA board is considering additional staffing cuts as an alternative to CRA Administrator John Molloy’s budget proposal to issue $1 million in bonds to pay for administrative costs.

Council members grilled Board President Peggy Moore about the proposed $160-million budget, but she refused to directly answer repeated questions from council members about whether additional staff cuts might be part of a revised spending plan.

“The board has asked for additional information to give us an opportunity to carry out our fiscal responsibility in the area of policy-making for the agency,” said Moore, named to her job by Mayor Richard Riordan.

For years, the council and CRA board have approved agency budgets that used debt financing, in the form of bonds, to pay for administrative costs. But this year, board members objected that Molloy’s budget depended too much on debt financing when he suggested that $8.8 million in bonds be issued, including $1 million to pay for administrative costs. In addition, Molloy proposed reducing the staff from 210 to 200.

CRA board member Keith Richman has said one option that should be considered is cutting staff by an additional 11 positions to balance the budget without resorting to bond financing.

But Councilman Mike Hernandez said the CRA is an important tool for revitalizing the economy of the city.

“If the tool is basically dysfunctional, it’s broken, because if [the agency] doesn’t have staff, that’s going to create problems,” Hernandez said.

Councilman Nate Holden said the proposed cuts are coming just as the inner city is beginning to get redevelopment projects.

“When we start to get our share, you are saying enough is enough, there is no more left for you guys,” Holden said, addressing CRA board officials. “That’s not acceptable. This is another tactic to deny those who live in the inner city the chance to establish a project.”

The proposed budget also includes bond funds for a film studio project in the North Hollywood redevelopment area.

Councilman Richard Alatorre had proposed that the council exercise its powers to take the budget decision away from the CRA board after the panel refused on June 2 to adopt Molloy’s proposals.

Alatorre said more delays in adopting a budget by July 1 could prevent the agency from conducting business and paying its employees, and could put the agency in technical default on its bonds.

“Of equal concern is the allegation that members of the agency board are attempting to use this issue to force the agency administrator to lay off at least 10% and as many as 40% of the agency employees,” Alatorre said.

But city lawyers advised that the council may not take control of the budget before the CRA board again considers a continuing resolution of funding on Thursday.

Union leader David Cochran told the council that union members who work for the CRA are suspicious that Riordan and the board he appoints want to make additional cuts in the agency work force.

“The concern the employees have is this is a method that the office of the mayor and CRA board are using to try to get rid of employees without the right and formal processes,” Cochran told the council. “The employees are looking to this council for protection.”

Eliminating $1 million in bonds for administrative costs would force the agency to reduce its staff by an additional 11 positions, Molloy has said.

“This type of cut would have negative ramifications on our ability to provide services throughout our project areas and I would much prefer not to make such an additional reduction on the heals of the continuous staff reductions we have already made over the past five to six years,” Molloy said.

Not all of the council members oppose additional staff reductions.

“The chickens have come home to roost . . . because administrative costs have been exorbitant on many projects,” said Councilman Hal Bernson.