Controller to Review Plan for Cityhood

The Los Angeles City Council voted Wednesday to ask for a state review of a study that found Hollywood would be financially viable if it seceded.

Councilman Eric Garcetti, who represents much of Hollywood, said a state controller’s review will give voters more information to consider if the secession proposal is placed on the November ballot.

“There is an intense desire within Hollywood to stay within Los Angeles, but we have to make that case,” Garcetti told his colleagues. “We have to have the clear information out there so people know what $10 million in cuts each year for three years are going to look like.”

The Local Agency Formation Commission recently released its study of Hollywood secession, concluding that a new city would be financially healthy but might have to make some cuts to build a reasonable reserve fund.

State law allows anyone to request a controller’s review of the studies. The city recently paid for reviews of San Fernando Valley and harbor-area cityhood proposals.

State Controller Kathleen Connell found that a harbor-area city would have financial viability problems but that a Valley city could work if it increased its reserves.

The latest council request for a state controller review was no surprise to Hollywood VOTE board member Fares Wehbe, who said the city is looking for any ammunition against secession.

“I’m concerned the city is trying to wiggle out of letting the voters decide. It’s a waste of taxpayers’ money,” Wehbe said of the review. “The finding is going to be the same, that we generate more money than the cost of services, and we are financially viable.”

The council agreed to pay $25,000 toward a Hollywood review, which will take 45 days and is not expected to delay the commission’s decision in May on whether to put the cityhood measure on the ballot, according to Larry Calemine, the commission’s executive director.

The council also voted Wednesday to send three other reports to the commission that raise objections to terms and conditions for all three cityhood proposals and assert that the Valley and harbor plans would hurt Los Angeles financially. The council insists that a new Valley city would owe Los Angeles $306 million in annual “alimony” payments.

Los Angeles asserts that the cityhood proposals fail the test of “revenue neutrality” required before they go on the ballot.

Chief Legislative Analyst Ron Deaton said the city has an obligation to go on record with its concerns about the viability of all three proposals.