City Council Year in Review: Budget Woes, Medical Marijuana and NFL Dreams

City Hall officials dedicated themselves to improving the city's bleak budget scenario and broader economy in 2012, but city leaders also devoted much of their attention to thorny issues like medical marijuana and dreams of an NFL team returning to Los Angeles.   

A changing-of-the-guard in the City Council's leadership also changed
the tone and pace of city politics and business. City Council President Herb
Wesson became the first black councilman to lead the legislative body, taking
over in January for Councilman Eric Garcetti, who stepped down to turn his
attention to running for mayor.   

"My name is Herb Wesson, and I am the president of the Los Angeles City
Council,'' Wesson trumpeted as he opened the city's legislative year on January
3. Wesson would run the council in 2012 with an iron fist, ensuring that meaty
agenda items were disposed of swiftly, often limiting public comment to keep
debates and council meetings short.

Redistricting Leads to Disputes, Lawsuits  

Raw politics cast a pall over the council in the early months of the
year as a process to redraw City Council district boundaries turned ugly. Two
members of the council--Jan Perry and Bernard Parks--accused Wesson of
orchestrating the once-a-decade redistricting process to reward loyal council
members with better districts. The council in June approved moving most of
downtown out of Perry's district and into Councilman Jose Huizar's 14th
District. Parks lost USC from his South Los Angeles district.

[Local Impact: Redistricting]

Wesson, for his part, denied having influence over the 21-member
redistricting commission appointed by the city's elected officials.

"To suggest that one person, me, could influence a 21-member commission
and a 15-member [city] council in my view is kind of insulting to these ...
independent thinkers,'' Wesson said at the time.   

The redistricting plan also drew a lawsuit from a coalition of Korean
American groups angered that Koreatown was not united under one council
district. The suit, which is ongoing, alleged the maps were drawn with race as
a motivating factor in violation of the Voting Rights Act.

Budget Woes

For the third year in a row, the council struggled in 2012 to close a
massive budget deficit--$238 million--in part by further shrinking the size
of the city's workforce to early 1990s levels, raising parking fines and a mix
of budget cuts and one-time revenues.

[Local Reaction: Park Fines to Increase]

However, the heavy reliance on one-time revenues that have not yet arrived in city coffers combined with rising wage and benefit costs for city workers left city leaders with another projected deficit of well over $200 million for the fiscal year that starts on July 1 and some unpopular options to help close the deficit. They included privatizing some city services, reducing employee benefits and tax increases.   

The City Council this month approved placing a half-cent sales tax on
the March municipal election ballot. The tax is predicted to raise about $216
million per year in revenue for the city. Without the tax increase, some
council members said, the city will be forced to start shrinking the size of
its police department, just as crime dropped for the tenth year in a row.

The lion's share of the city's ongoing financial burden is the rising
cost to taxpayers of public employee pensions, including retirement health
benefits. The cost to taxpayers is projected to top $1 billion by 2014--nearly 25 percent of the city's general fund revenue, which goes to pay for
basic city services like road repairs, public safety and libraries.

As such, Mayor Antonio Villaraigosa pushed through a plan this year to
scale back retirement benefits for city workers hired after July 1 without
gaining approval from public employee unions, which threatened to sue to block
the plan from taking effect.

Former Mayor Richard Riordan became a presence in City Hall over the
summer, warning city leaders that Villaraigosa's pension plan did not go far
enough, because it only applies to new hires at a time when the city is doing
very little hiring.

Riordan organized an effort to place a pension measure on the May general election ballot that would have imposed more severe wage and benefit reductions, including freezing employees' salaries until taxpayer-funded contributions to worker's pensions fell below certain levels.

However, in the face of a major push by city employee unions to block Riordan's petition drive, the former mayor dropped his initiative, vowing to work with city
leaders to go further to reduce pension costs.   

As part of Villaraigosa's effort to cut ongoing costs, the City Council
got behind a plan to hand management of the Los Angeles Zoo over to a private
operator this year, but the deal stalled over differing legal opinions about
whether private workers would have to answer to a city employed manager or not, since the city would retain ownership of the zoo property and animals.

The city approved a private nonprofit to manage a San Fernando Valley
animal shelter and this month approved moving forward to select a private
company to manage the city's convention center.

NFL Dreams  

The city notably cleared the way this year for sports and entertainment
heavyweight Anschutz Entertainment Group to build an NFL stadium downtown
adjacent to L.A. Live and the Staples Center. In exchange for approving the
project, AEG agreed to build the city a new convention center hall to replace a
decades old hall.

The deal is contingent upon a football team committing to
move to Los Angeles and subject to approval by NFL owners and Commissioner
Roger Goodell.

Buzzing Over Medical Marijuana

City officials again spun their wheels this year trying to stop the
proliferation of medical marijuana dispensaries. After more than five years of
trying to come up with a legal way to limit the number of medical marijuana
dispensaries, City Council members finally threw up their hands in July and
banned the dispensaries until ongoing court cases or revised state law provide
clarity on how the city can legally regulate dispensaries.

Medical marijuana supporters mounted a successful referendum on the ban, forcing the city to repeal its ban in October. Meanwhile, marijuana advocates are expected to get two competing measures on the municipal ballot in March that would allow marijuana dispensaries.   

[Local Impact: Medical Marijuana Dispensaries Ban Overturned]

As the calendar year turns over, the mayor and City Council will be tasked with closing budget overruns during the current fiscal year and will have to make tough decisions about where to cut for the next fiscal year.

The decisions will be made against the backdrop of city elections that will usher
in a new generation of City Council members, a new city controller and a new
mayor and will also determine whether officials have a large new source of
revenue in an increased sales tax.