“We’ve created more jobs, I think, for the job centers than through the job centers. Let me restate that, if that’s not clear. The people who work in our job centers in the past have actually been more jobs than the people who go through them, because we’ve counted people’s help with resume coming in, getting a lead, and going on a job interview as help, rather than actual jobs obtained and career paths pursued.”
The Honorable Eric Garcetti Mayor
City of Los Angeles
In conversation with Patt Morrison, Columnist, Los Angeles Times
Discussion with Town Hall Los Angeles on May 12, 2014 at City Club Los Angeles
Morrison: Before we get to the questions, you have a few remarks elaborating on the State of the City address and jobs and economic development, and to which my reaction was essentially the “Home Alone” one of that we may have a population of people who live here because they can’t go anywhere else and people who live here because they can afford to buy out of the problems of the city. Could you elaborate on that?
Garcetti: Sure. First of all, thank you so much to Town Hall Los Angeles. This is a tradition that has existed with mayors I believe for 37 years, and I’m very proud to be a part of it. I’ve been a proud member of the audience for many Town Halls, so thank you for graduating me up to the stage. Or I should thank probably the voters of Los Angeles for having done that. But I couldn’t be prouder to be the 42nd mayor of this town at this moment, this place, and to come together with a group as illustrious and as accomplished and engaged as all of you. Thank you Jim Thomas, for your friendship and the work you’ve done on everything from building downtown to trying to move LA forward literally on transportation policy, and Patt and I always have a good time together. So fasten your seatbelts, we’re going to have a great discussion.
Morrison: And not just because I have a hatpin.
Garcetti: Not just because she has a hatpin, but the threat of a hatpin always makes sure your answers are concise, because you never know when it’s going to come at you. We have an amazing moment in LA’s history. I think this year has been in many ways a hinge of history for us, coming out of the worst recession in our lifetimes, in a town that we all either are lucky enough to have been born in or have chosen at some point in our life to move to.
Morrison: That’s my line.
Garcetti: You’ve got to find another one, then. And all of us who remain here have that conscious decision, I think, all of us at least in this room, to stay here and to stay here for a reason. But I think we’ve got two shortcomings in Los Angeles. One was a City Hall that had stopped working for the people and another one was an economy that had stopped thinking strategically. And the intersection of those two, where City Hall and economic development meet – for too long we were just kind of resting on our good weather, assuming the economy would move forward, and then wondering why we were down 150,000 jobs even as our population grew over the last 20 years. Looking at our peers across the country and wondering why our unemployment rates were higher and looking at certain gaps we’ve failed to fill. I think Los Angeles in some ways was built not as a liberal city, but a libertarian city, where we said let’s all stay out of each other’s lives. Do some basic things, government, just bring us some water and some power, get us some land to continue to buy on the outskirts, and we’ll take care of the rest. And it was a great formula for a long time. We built a few things like freeways that helped kill off the public transit system we had, because it was easier and better at the time. Why build schools where the population was growing when it was cheaper to do on the outskirts, and put kids on busses that would get to those places quickly and effectively? Don’t worry about implementing things like the Olmsted’s, who gave us Central Park and Prospect Park – their plan along the Los Angeles River – because everybody had a backyard. Just stay out of our way and we as the kind of individuals in private sector would define Los Angeles. Until one day sprawl hit the wall. We realized there wasn’t any more land, that it didn’t make a lot of sense not only to keep kids stuck in traffic on busses on freeways that no longer moved, but it destabilized communities when 50 percent of the kids were bussed away from their community and didn’t stabilize the place they grew up in. We suddenly choked on traffic, free in our cars to move at one mile an hour, wondered what happened to our public transportation system, and began rebuilding and reenvisioning that. And all of us
kind of looked for those common spaces and places to meet, not just the Starbucks of the world, but libraries and parks and things we hadn’t built.
So in many ways, I think the reflection of the last 20 years – at least for me as a native Angeleno, fourth generation – is that pivot for us into becoming a different city that wasn’t just a stay-out-of-our-way, but we realized government was getting in the way when we wanted it not to, with things like the highest gross receipts tax in the County of Los Angeles that literally was chasing jobs and I believe still does chase jobs away from the city, to those things when government was supposed to be there and we were nowhere to be found. We did the opposite of what we were supposed to do. We got in your way when you didn’t want us to; we didn’t help when you needed us. And so, the last year has really been about a re-envisioning. Can we make government do the opposite, help you when you need our help and get out of the way when you don’t want us to be around? To reestablish the most basic trust in things like our Department of Water and Power, to have a mayor who really exercises executive power in the true sense of the word, which is for instance our general managers, and under a new charter that strengthened the strong mayor system, allowed mayors to hire and fire general managers. But nobody had even gone through the basic review of doing that on day one, which I did for two, three months of deliberate work, an hour-long interview with each of them, a memo that I asked each of them to draft based on four values of my vision that I put out: of sustainability, of economic development, of technological innovation and customer service. Those basic kind of cornerstones of a new culture at City Hall that said you won’t have as many doors to get through to meet with the mayor and his staff, but also each of these general managers will truly be part of a cabinet, not ignored until they mess something up and then micromanaged until it’s fixed and then you go away, but more of an incorporation day to day. So, a lot of the movement that we’ve had in the last year underneath you, you don’t notice, because it’s happening at City Hall.
But outside of City Hall, we’ve turned a corner too, I think, in the way we’re looking at everything else we want to do. If I want to pave more streets, if I want to keep 10,000 cops, if I want to reduce our response times for our fire trucks and our ambulances, I’m going to need resources. And resources come first and foremost not from raising our parking fines, not from getting more taxes, but from going towards building an economy that for 20 or 30 years will be a strong foundation.
And we’ve seen some very good signs. I spend a lot of my week just focused on business. People say, well we messed that one up; Toyota left, or Occidental’s gone. And I say, for a long time we weren’t even in the batter’s box. We’ll have strikeouts and we’ll have home runs, but you’re never going to get any hits or home runs if you’re not there in the batter’s box. And so every week I get leads from Kelli Bernard, my deputy mayor of economic development. We went from 12 deputy mayors down to four, which each reflect the four cornerstones of my administration: public safety, economic development, budget innovation, and basic city services. And she and her staff get leads on companies like Riot Games, which didn’t exist five years ago. We can decry Occidental Petroleum leaving, but when I talked to Steve Chazen, the CEO, he said we were leaving no matter what. It had nothing to do with incentives or being un-business-friendly. Most of our operations were there and quite frankly we only had 150 people working in LA. But if we focus all of our attention and headlines on that and ignore a company like Riot Games, which didn’t exist five years ago and has 1,500 jobs, is expected to become 3,000 jobs soon, or Forever 21, where we just announced the largest solar rooftop in LA County a couple days ago, that has 3,000 jobs in their headquarters and is hiring another 2,000 just in the next two to three years – then we’re not really focused on the right things where the job creation is happening. So, that’s what we’ve done. We’ve moved many companies who are those vibrant new startups into LA and helped them locate into a city based on the advantages that we have, while promising them they’ll get things done quicker. And that’s what I hope we’ll get in to.
Let me end with a couple metrics, and then we’ll open it up for more of a conversation. Our job growth is about 2.2 percent, which is outpacing what’s happening nationally, though we have a further way to go because our unemployment is higher than what we have nationally. We’re down about 2.2 percent in our unemployment just in the last about 10-12 months, which is a great sign of the vibrant culture that we have here. In a couple sectors, we for instance look at the digital technology sector, so-called Silicon Beach or Digital LA. We have the third-highest amount of venture capital money in the world. Silicon Valley is No. 1, Tel Aviv interestingly is No. 2, we’re No. 3. And a new tech company is starting up here
every 40 hours. We’re seeing sectors like health care rapidly expand. One of our Fortune 500 companies, Health Net, is probably adding about a third more jobs because of the Affordable Care Act and Los Angeles helped carry California which helped carry the nation in terms of new enrollments. And that, like the financial services sector, are two huge sectors that we never talk about here in LA. And part of my message in Los Angeles is not only am I going to bring back those flagging sectors like the film industry, like aerospace, but also talk about those industries that have been right under our noses that we never talk about, like financial services, like health care, as well as focusing on the new emergent ones, like biotech, digital tech as well. And we’ve put a strong focus – I’ll close on this – on making sure we don’t just do things from the top down, of reducing our tax, of a number of incentive programs I hope to tell you about here today that have already processed more than $3.8 billion of new business startups in this town in a record pace, because time is money. We’ve done a lot of lip service over the years so things will be better and quicker, but we haven’t actually done it until now. But we also are looking from the bottom up.
And I’ll leave you with these two statistics. The City of Los Angeles is creating high wage jobs more quickly than low wage jobs and people are surprised when they hear that because that’s certainly not what you read in the headlines. We read we’re the poverty capital, this, that, and the other. But at the same time, our poverty rate is going up. When I saw those two statistics as mayor when I started my time, I did a lot of thinking about them, talked to economists and others. We’ve convened, by the way, a new council of economic and fiscal advisors for the first time in the city’s history, based on a convening I did of all of our university presidents and chancellors, who all knew each other but had never sat down together in one place. And they’ve each given us great folks from their universities and their colleges who are advising me. But what we came up with is that we’re creating these good jobs, but they’re not going to Angelenos. We’re attracting good people from other places to fill those jobs because we’re not graduating young people with the skills to fill those jobs. That’s a bridge that I plan on building and I’m already jumping in with something called Summers of Success, the largest youth initiative in this county in a generation, together with the County of Los Angeles, together with the private sector, to keep our parks open late at night, to have a summer youth jobs program and a summer of learning where people can get digital badges, new skills that as a young person they’ll take to an employer, college application, or their teachers. That’ll set LA apart as kind of at the front of the new economy, training young people to become those workers in those sectors that we need, so that businesses will feel that it’s more business-friendly from the top down. They’ll find those employees they’re always struggling to find from the bottom up, that they can hire tomorrow, but we aren’t doing from Los Angeles. I think together, combined with a few other things we’ll talk about – good infrastructure of our transportation – we are poised to be on the move and this first year has been beyond my expectation. We’ll go to the metrics on that and I know some people have said, what’s actually happening at City Hall. We’ve got the numbers to prove that LA is on the move, that City Hall has been a part of it, but we’re going to need you all to accelerate that even further.
Morrison: There’s a perception that much of this has happened in spite of City Hall rather than because of it. And you also cite the poverty numbers, the concerns that people have about good jobs versus simply jobs. Torrance is way outside the town of Los Angeles, but it’s part of that regional perception that things are astray and that when it comes to governance we’re essentially turning into Detroit with palm trees. What about governance issues that you talked about, specifics with business, you talked about specifics with efficiency in City Hall, but one of the things the 2020 Commission report talked about was the sense that what we had perceived as what you referred to at the beginning, government is hands-off, has become government that has turned its head away. How do you deal with that malaise, that sense of avoidance, when things are right in our faces? Almost 20 percent of the budget now has to go to pensions. How can you deal with that, because that becomes a drag on everything else you spoke about?
Garcetti: Well you mentioned about five things there, so let me knock some of them. I think we as Angelenos have a responsibility to not overstate the case, to really face up honestly to our challenges and problems but not to understate our advantages or our momentum. And I don’t want that to be a self- serving comment, but I think as I’ve said many times and I’ll say it again, we’re very good at publically bitching about what’s wrong and privately saying what we love about LA. We have to invert that. We have to privately do the hard work of actually coming together and solving problems, not just a one-off, this is what’s bad, but get our hands dirty and do that with our private work, and publically do a better job of
selling LA. Case in point, The Guardian UK, respected newspaper, just did a study of the brand strengths of all of the global cities of the world. So, we had 50 top cities: it was Tokyo, it was Rio de Janeiro, it was Venice, it was Seoul, it was London, New York. Guess what city came out on top, No. 1? And they based this on a scientific set of public safety, economy, they looked at opportunities, weather, and brand strength. LA was No. 1. It beat New York, which was just ahead of London, those were the top three. I don’t think many Angelenos think of themselves as No. 1 anymore, so it’s good to have some British folks do the analysis, so that we can actually see the analysis come back to us that despite the challenges that we have, we might actually have something that’s pretty remarkable here.
Morrison: But we’re not reading The Guardian here. Garcetti: Well I hope you do, it’s a great paper. Morrison: I use the royal we.
Garcetti: Yes, exactly. The reason why LA had more visitors than ever in its history last year, have more people living here than ever in its history, and more people studying here than ever, is something that’s fundamental and on the ground. People are free to travel wherever they want, to study wherever they want, and to some degree to live wherever they want, and there’s a record number of all three. So, those fundamentals are very strong. Now, looking at something like the budget and the regional leadership, I’ve tried to lead from the beginning as a regional leader. I think it’s been a shortcoming of us in the past that we have not looked at the mayor’s office. If you talk to most of the mayors around the county, they love to hate LA because we’ve been the 800 pound gorilla that is arrogant, that never listens to them, that gets all the attention, so they love to hate us and we ignore them. One of the first things I did was, I invited the 87 other mayors of LA County to meet with me when I was in my first month as mayor, and 65 of them showed up, 66 mayors of LA for the first time in one place. And we didn’t just come together for a short period, we spent the entire day together talking about economic development, about traffic and transportation, about the way that we could start to plan these things together. I’ve gone out to San Gabriel to speak to the council of governments there as a member of the MTA Board, soon the chair, to talk about the extension of the Gold Line way beyond the City of Los Angeles. And they said the importance of me coming there was a game changer like nothing they’d ever seen, because what it means is I can open up certain doors for them that they can’t themselves. To know that the LA mayor is not only somebody they don’t have to fight against, but actually might be on their side too, means when LA city has a need, when we’re extending for instance the Wilshire subway, which we’re about to sign a historic grant from the federal government on later this month – that that is something they can get behind too.
When I went to Mexico on our first trade mission – the mayor of Los Angeles is able to sit down with the president of Mexico. We have Carlos Sada, our great consul general here, and we sat down with the president of Mexico, Pena Nieto, who’s a remarkable leader. But I was among other things lobbying for a company here that’s not even in my city, Panda Restaurant Group. We all know Panda Express, orange chicken for everybody, it’s a goal we have. So, Andrew Cherng, who’s a friend, they’re expanding into Mexico and asked my help. So, we opened up one of the first ones there. They’re having 266 Panda Expresses open up in Mexico, and guess where the food’s going to be made? Right here in Rosemead. That’s not the City of Los Angeles, but we’re exporting food from LA – you don’t think about this during NAFTA – to go down there. There will be good jobs for Mexicans in the new restaurants, as well as jobs for people here and I’m sure some people who live in that factory happen to be my residents, too. If we don’t start thinking about ourselves regionally, if we don’t tie the Ports of Los Angeles and Long Beach closer together, if we don’t begin leading in a more regional way, we will be overtaken by other places who aren’t divided. So, it is a central part of my administration that we have started to unify university presidents, chambers of commerce in our neighborhoods, our mayors, to do that.
Last piece, you brought up, the pensions. Los Angeles has done more on pensions than any other big city in America, both in percentage and absolute dollar terms, and we haven’t yet done enough. But it’s important again not to pause and say there’s nothing that’s been done because if you look at us – for instance, when Governor Christie, you might’ve heard of him, he’s in New Jersey – I’m going to get him to
be the new head of my Department of Transportation – when Governor Christie was doing pension reform, he was lauded for raising the percentage of their state paycheck in New Jersey by a point and a half, so 1.5 percent – what his state employees were paying in more to pay for their pensions and health care. We went from paying as low, city employees, as 3 percent, as high at times as 6 percent, up to 11 percent. We basically doubled, in some cases tripled, what our employees now pay for their pensions. Each of the contracts that I’ve gotten, just as mayor in this first year, have all included health care contributions to their premiums for the first time. We were paying 0 percent for our premiums out of pocket, so who cares if health rates go up. We don’t have any skin in the game. And we still need to go further, but it’s put us in a position to have stabilized bond rating when other people were just downgraded two months ago, and to go from what was projected to be a $1.1 billion deficit for this past year into a $92 million deficit that I just closed with my proposed budget for my first year.
Morrison: And yet, to enact fundamental pension reform, it can’t be around the edges. You may have new classes of firefighters who will…
Garcetti: And we’ve done that. I want to be clear, we haven’t done around the edges. We went to the ballot for new firefighters and police, which under the law you have to actually get a vote of all the people. We can’t do it at City Hall. And successfully passed that for all new firefighters and police. The tougher things that most places haven’t done are we negotiated with current employees those changes. I want to be clear, those weren’t for future employees. Nobody else has done that to that level. I did that as City Council president. And the importance of that is you have to get the other side to agree. How do we get that done? To their credit, our city unions knew that if we didn’t do that, it would’ve been layoffs, massive layoffs. And some of the senior folks know that the layoffs wouldn’t have been them, it would’ve been somebody junior. But they said please, imagine this. Imagine if this half of the table or this third of the room decided to retire early. This group was the senior workers and these were the new workers. You all decided to pay for their early retirement to reduce our payroll and to pay more out in your pension so that they weren’t laid off. That’s a pretty remarkable thing that this middle third of our city employees did basically on their backs, when if they really wanted to be selfish, they would’ve said, forget them, I don’t want them retiring early, and lay them off, I’ve been here for a long time, it’s not going to be on my back. It was the right thing to do. We did it at the table. It’s really easy to get kind of ideological about this stuff, but it requires people actually coming together, talking and doing this.
Morrison: What else needs to be done to get the pension part of the budget in a position that you would like it to be?
Garcetti: I don’t think we can live with an investment, assumed, an investment return rate of 7.75 percent. Those of you who are investment professionals, New York State is at 7. Some people think it should be lower. I’ve talked to some great investment professionals who run fixed income folks here who think we can hit 7.75, but I think they’re in the small, small minority. I think that needs to be lowered and that will readjust what our obligations are. I think that will mean that in future years we come back and we have to look at what we each pay into our pension.
Morrison: And to change anything else about the pension system, or even about the employment situation? So for example, firefighters, rather than living in the station, maybe they’d work shifts like the LAPD. Are there any thoughts afoot about some of those probably pretty radical changes?
Garcetti: Yeah, for instance the fire department, it’s a great thing, we have the finest firefighters in the country if not the world, but we’re working off of systems that are literally 50, 60 years old. And so we just commissioned a study that’s come back that suggested everything that should be data-driven about where we do deployment. We always have 10-person teams no matter what, which is great when there’s a fire and you need people to rush there. But when 85 percent of your calls are medical, you have to start looking at new models that can be better. I plan to pilot those. I plan to work with our firefighters to look at, when the Westside is full of traffic we’ve had motorcycles, for instance, respond to medical calls, because good luck even with sirens and four wheels getting through that. You’ve all been in that gridlock and when life’s on the line we need to look at new ways of doing that. We’ve started FIRESTAT, which is a new computer system kind of like LAPD used called COMPSTAT, which traces response times. And you all as
the public will see for the first time shortly what response times are in your neighborhood for your own paramedics and firefighters, which I think will empower accountability. The fire captains, who are the head of each one of the firehouses, love it, because for the first time they’re able to compare shifts, they’re able to compare to other places in the city, and really push people to do better.
Morrison: There are a lot of questions in here about the business tax and your plans for it. There was a question of eliminating it; you’ve talked about moderating it. What is the status of that, and where does it rebound into the city in terms of the cost of services or making up the difference?
Garcetti: Again, this comes down to sometimes overly simplistic arguments on both sides. Those who don’t want to cut it say, well what are you going to cut in the city when overnight you have a $100 million gap deficit. Those on the side who say, look, slowly we’re seeing jobs leave LA. LA County has gone up in population and up in jobs, LA City since the riots went up in population and down in jobs. And this isn’t the only factor, but it certainly is one of them, and anybody who’s an accountant in this room, I’m sure you give your clients good advice, and more often than not it’s don’t incorporate in Los Angeles, if you can. Go to Beverly Hills, go to Culver City, go to Burbank, Glendale. I didn’t come to this ideologically. I probably was on the other side of things when I became a councilmember, but I found a law in Hollywood when I was a councilmember that Jackie Goldberg, my predecessor had passed but hadn’t been used, that any entertainment-based company could have its gross receipts tax waved if they came to the physical area of Hollywood. And as I worked hard on the revitalization of that neighborhood – I see Chris Essel back there – together with many great partners, we were able to actually wave that gross receipts tax at a moment when Nielson Entertainment, for instance, and TV Guide were looking at headquartering or consolidating. And they’re like, we don’t know with this gross receipts tax. And they needed some other issues, it wasn’t the only one, but when we said we were able to waive that, it was the straw that broke the camel’s back in a positive way. They said we’re coming. Now to give you an idea of the impact of that, that was just between those two companies about 1,000 jobs averaging about $80,000 per job. Those are people who spent money at new restaurants that popped up, they had people who parked and spent parking taxes, we had a W Hotel that was built and a lot of the business was people who were visiting those companies. We saw the tax revenues out of the Hollywood area go up 475 percent, the biggest comeback story of any neighborhood in California over that decade when we were able to attract those companies that became the new tent poles. So, I’m not saying that every company needs a reduction, but you have to throw a wide net and catch them all if you’re going to catch those who otherwise wouldn’t come or wouldn’t stay. And we made that revenue up many-fold.
So I’m a strong believer, as long as you have trapdoors so it doesn’t come just in a single year and you do it over time, we need to eliminate our city’s gross receipts tax. Even in a tough year like this with the deficit, I got a historic agreement with our budget chair, Paul Krekorian, and our City Council president, Herb Wesson, because we actually like each other and are all getting along at City Hall. It might not be as many fireworks, but it’s good I think for the public. And a four-year deal to chip away at our highest rate. It’ll be about a 15 percent reduction on the way to what I say will be then, when the economy’s back, even bigger reductions. I would like to put in place the final elimination of it while I’m mayor. Whether it’s implemented while I’m mayor or not, I think we can vote on the plan as our business tax advisory committee, which we commissioned, showed us over 15 years to get rid of this once and for all.
Morrison: There were a couple questions about Promise Zones and concerns they’re going to places that are already doing well, not the places that need it. So, maybe you could speak to that.
Garcetti: Yeah, that’s been a caricature. There’s no, these places aren’t doing well, where the Promise Zone is delineated. The Promise Zone is the signature anti-poverty initiative of the Obama administration. We were one of the first five communities – one was an Indian reservation and one was a rural area in Kentucky. It was great to be at the White House and seeing Senator McConnell and Rand Paul and myself and Adam Schiff all saying we love this together, because it was one of those true moments of bipartisanship in a country that doesn’t have it enough. But we were one of the first three cities, with San Antonio and Philadelphia. A huge honor to be selected for this, but it was less that the White House is going to bring us a lot of new stuff than the White House saw a reflection of a lot of great work we’re already doing here on the ground. To be able to not, nobody has a lot of new funding, but what we started
doing in the City of Los Angeles under my leadership of the committee that I chaired about 10 years ago – was instead of having, if you have let’s say a mental health problem, we send you here, you have a legal aid problem, we send you there, if you need after-school help, we send you there, tax preparation, we send you there. We started consolidating these together in family-source centers, which are one-stop shops people can go to now and essentially have one shot to be able to go in and you’re getting your child enrolled in health care. Well, you learned you can get some free tax assistance and get the earned income tax credit, $3,000 back for your family that you didn’t know about. And while you’re there, there are some mental or some counseling issues that you need for your family, and you get that help in one place. The promise zone win was a reflection of that. We were the only city that won all three grants that qualified you for that ahead of time, the only city in the country. And we’ve been in negotiations – we wanted to do it throughout the City of LA, both in the central part of the city where poverty is tied with the part just south of here, the true South Central along Central Avenue part of Los Angeles – but the rules said that you had to have won a previous grant. I lobbied for that to be changed, I’m still lobbying it right now, and I’m hopeful that we can apply for and win, if not expand our existing promise zone, to South LA, to the Eastside, to the northeast San Fernando Valley.
But whether we get the Promise Zone designation or not, and this was a huge honor. That Promise Zone will help all of those places because here’s what we’re going to be doing to combat poverty across the city. We’re going to be doing the summer youth jobs that I mentioned, we’re going to be doing the Summer of Learning that I mentioned, we’re going to fundamentally change our job training programs in the city. We’ve created more jobs, I think, for the job centers than through the job centers. Let me restate that, if that’s not clear. The people who work in our job centers in the past have actually been more jobs than the people who go through them, because we’ve counted people’s help with resume coming in, getting a lead, and going on a job interview as help, rather than actual jobs obtained and career paths pursued. This year, 45,000 Angelenos will be trained under the new policies I’m implementing, and that whole contract will go out, is out to rebid, to make sure that we actually have for the first time metric- driven policy. And if you leave here with nothing else, I hope that you know that City Hall now is measuring its results, is now measuring its goals, and is putting them forward publically. Later this month, we’ll put out our second iteration of our – if you go to LAMayor.org – our performance statistics. And you can either by subject area, like the environment, or by department, like the Department of Water and Power, see where our metrics are and suggest to us which ones we should measure. So, you can see that sort of progress. And certainly our job training is going to be a core part of that.
Morrison: Speaking of the Department of Water and Power, so much of how government is regarded is the perception that people have on the level which they deal with it daily, whether it’s trash pickup, the electricity system, or the LAPD. The DWP is regarded as a real problem in terms not of the delivery of electricity, but whether or not people are getting their money’s worth. And in City Hall, it’s seen as a political obstacle which may or may not be surmountable. What’s going on with the DWP, with the fund? Is the city going to put another $4 million toward it, as it has every year for 10 years now?
Garcetti: There’s a lot happening at DWP, and I agree with you, it’s probably the symbol in some ways of everybody’s frustration with City Hall, and to me the cornerstone of a lot of the reform work that we’re doing. First of all, leadership. We brought in a new board, led by Mel Levine, who’s doing a bang-up job with four other great commissioners, our former congressman and somebody who knows the energy sector really well. And his experience as a lawyer has been already manifested in a lot of the initiatives he’s taken. Second is a new general manager. We had a very good one, Ron Nichols, who decided to retire. Marcie Edwards, the first woman to head up the department, man or woman the best person for the job, but this will be the seventh glass ceiling that she’ll break in the DWP at a moment when women – and they still very rarely do in what are called the trades, actually doing the electricity side and the steam plant operation side – she filled those jobs working her way up over 30 years, a third-generation DWPer. Her grandfather’s retirement papers were signed by William Mulholland. We recruited her in after spending part of her career at DWP and touching so many different elements of it. She went to head up Anaheim’s utility, which has among the best customer ratings in the state if not the country, certainly for a public utility. Then was the Anaheim city manager, and I recruited her to head this up. And she is doing a fabulous job, even in the short-term, owning the problems that we’ve all inherited, like the wait time – 40 minutes when people called the DWP helpline. Has anybody in here been there? My father has, so I
certainly get to hear about it. And making sure that we put forward a new transparency, a new accountability, but also rebuild a department. This is not a department that I want to beat up on. We’ve got great employees there. We’ve got a historic contract, the first time in 20 years with no raises for four years. There’s been a raise every year for the last 20 years. So, dealing with that kind of inequality of that, and that’s one place where I congratulate the union for stepping up with us and doing the right thing.
But transparency is also important. So, for the joint training institutes, the nonprofits you’ve heard about, the joint safety institute, things that probably should exist – most companies have them and most utilities do – but we need to know where that money is being spent. We’re going to be like a dog with a bone, and I’m so pleased that it isn’t just the City Council and mayor who are getting along, our city attorney, our city controller, together the three of us have gone after this, have gone into court, have won every step of the way. Right now, as the judge reviewing, he put it on hold, but not to reverse it, just while he’s doing the reading. And I hope that we’ll see those books. If there’s nothing to hide, it should be a one-day story. It should’ve been a one-day story, but the principle’s important. If there is something to hide, we’ll get to see it.
Morrison: You are a great exponent of bringing technology into government, but the medium is not the message. Just because I can send a tweet about a pothole doesn’t mean the pothole’s going to get fixed. Where will the technology meet the actual delivery? Not just services for residents, but how things work in City Hall, which as you know, it’s almost like Eisenhower never left the building.
Garcetti: I say we have cutting-edge technology from 1982, and that’s what we have in Los Angeles right now. This is also something that’s on the move very quickly. Steve Reneker, our great chief technology officer, came from Riverside, a guy who’s done everything from bridging the digital divide to making sure that all of our households and communities have Internet and broadband access, to looking at our internal operations, where we literally, I show up. By the way, one of my management things that I do is I call city employees when they don’t expect it to say congratulations on something they’ve done and I also show up where general managers don’t know, just to say hey, show me around your operations. So they can’t plan and prepare and just show the best.
Morrison: How’s that working?
Garcetti: It’s going great, I love it. It’s like Undercover Boss without being undercover. So, I went to look at the racks that we have under City Hall east, of all of our servers for our computer stuff. I literally was able to see with my eyes the battery acid dripping out of some of them, at a moment when most companies are moving to what’s called the cloud, outsourcing their stuff. It’s crazy that we have, I moved our city’s email just a few years ago to Google – that’s who won the bid – and you would’ve thought I was telling people they had to ride to work on a horse or something, it was so against… We have interns who program in languages that aren’t used anymore, who guard these boxes, and that’s secure. And I was saying, that feels secure? I think Google probably, Gmail is probably as secure if not more than that, and by the way we can save a couple million dollars a year, which we did. So moving more of our operations out is going to be something that’s going to characterize what we’re doing, but also making it much more transparent in. I see Bill Boyarsky; I know you’ve written about this. You can’t build something overnight where you press a button and say, ok where I live here, how many cats have been picked up by animal services here in the last three months? It takes some time to build it, but I think you’ll see in our second step, in some ways, the incentive is then don’t do anything, because if you put anything out there, people will criticize it. I’m going to continue pushing forward, and you’ll see as I said, later this month our second iteration of performance metrics that will keep us accountable. People will see technology used in a positive way. By the way, if you do tweet, we will fill that pothole, I guarantee you, because every single day on Twitter, people are telling me that stuff, and I can’t tell you anything more fulfilling than the person who puts a picture on Twitter on my account – this couch still isn’t picked up after three weeks – and then by the end of the day they said thank you. You know, one of them said, “Garcetti for President, the couch was picked up three hours later.” And that shouldn’t be just when you contact the mayor on his Twitter account. That is going to be the way that we communicate. Our 311 app allows you – if you have not downloaded it to your smartphone, download it. You can take a picture of a pothole or a couch on your street, of a light that’s out, and hit send. With the GPS in your phone, we know where it is. And that
comes to us in seconds without an expensive operator taking the call in, and we can get to work on actually fixing that thing. And we do potholes within 48 hours, as soon as we find them – 48 working hours, not on the weekends.
So, those things have fundamentally changed with technology. You’re going to see a lot more roll out. We’re going to have, later this morning, for our tech week, a lot of new apps, as well as the new website come out. And if you ever went to this year’s budget, for any of you who are budget geeks, you could actually for the first time manipulate the city’s budget and see over time things like pension costs. In each department you could look at salary costs over time. That is a huge game-changer, and we’re giving that data for the first time to programmers and to journalists and to whoever else wants to manipulate it, to either create more accountability or to do their own programming. And if any of you – now I’m going to really geek out – but if you any of you know programmers, come to our hackathon, which is we – hacking in the positive sense – we bring programmers into City Hall. We’re going to give them all of our data sets, everything from traffic and transportation to public safety and they can create applications to enhance all the quality of our lives through that data finally being public.
Morrison: If anybody were using a technology metaphor, if anybody were designing a city government today, what they would design would not resemble anything like City Hall. What would it look like for you if you didn’t have to worry about 15 votes on the City Council?
Garcetti: I’ll be honest, again, not to caricature our city government – I’m not concerned with 15 votes on the City Council. I think people often think there’s these great compromises. I think it’s not by commission, it’s by omission that we’ve made most of our failures. It’s not that there’s … when I was first City Council member, I sat alphabetically next to Ruth Galanter and somebody came up in public comment once saying, you guys are bought and paid for by some developer – maybe it was Jim Thomas, who knows. And you guys are just going to, you’re not listening to what we say, you’re going to approve this project no matter what. And Ruth turns to me and she goes, you know the problem with a conspiracy theory around here Eric? Nobody’s smart enough to pull it off. And I think that’s true, most people think there’s some great…
Morrison: We said that in the LA Times, too.
Garcetti: …conspiracy in City Hall, absolutely, but it’s by omission more than anything else. How would I redesign city government? I would redesign it based on output and outcomes. To give you an example, in our building and safety department, the way you’ve gone up is by enforcing the law, which we all want our building and safety inspectors to do. But that means people are going after nitpicky things that make the quality of life for an apartment owner, for a building owner, that becomes the metric of success rather than, how many jobs did you create?
Morrison: And if I may say, overlooking big transgressors.
Garcetti: Sometimes that’s the case too. I don’t think we do that as part of business, but there’s cases where that’s happened, certainly. But my point is, if you change – people are competitive, right? They will compete to get ahead, no matter what it is. If the new metric is, we’re going to judge you by how many jobs you created or how much carbon you took out of the air as a general manager who you thought had nothing to do with the environment, or how many hours you’re able to reduce people’s commute in a given year rather than how many tickets you put out, how many enforcement mechanisms were you able to put down, people will compete for that new thing. And so what I have done, when I pick up the phone and thank – this was in the State of the City, but I assume most all of you weren’t there because you had better things to do that day – but I talked about one guy who was in charge. There’s only one person in all of our Rec and Parks Department with over 100 facilities who’s in charge of our HVAC systems. That’s how cut to the bone we are. When people say government’s fat, right now we’ve never been more anorexic. We are cut to the bone. And when you look at it right now, there’s one guy who is in charge of all of those, and our air conditioning was on in most of our places the entire time it was open. In other words, when there’s nobody playing in the gym, the air conditioning was still on. It drove him crazy. He kind of went up the chain of command asking. They said no, that’ll take too long, you’re going to have to
ask permission, we have to put out a request for proposals. So, he went to the store on his own dime, on his own time, and got a button and a timer and a button that you can press when you leave if you’re playing basketball, shut it off. When you come back you put it on. And if people forget to do that the timer will click it off after a certain amount of time. And he put it in, it was a success down at the harbor. He brought that to his superiors who said, that’s a good idea, thanks for doing that. And now we’re doing that citywide. In the first year, we’ll save hundreds of thousands of dollars in our energy bill. That’s the sort of innovation that I think hasn’t been there as the metric for success. That’s what we’re changing. And it may not make a lot of headlines; it may not be super sexy. I guarantee it’s why you want me to be your mayor.
Morrison: There are concerns that the transit system may be a victim of its own success, that the demand will outstrip the ability to do it, that people can’t match up things to make the system work. Are you concerned about that? What are you doing to address that?
Garcetti: Interesting. I’m not worried because of the way that we’re building most of our new transit. You’re able to actually ramp up on rapid bus ways and trains, you just run more buses or trains. So, as the capacity goes up, as more people do it and every single one of these things we’ve built has way surpassed our expectation, you know, some cases threefold. The Orange Line in the Valley on Chandler is three times more ridership than we expected. So, you just can run more. Now, is there greater cost that comes with that, absolutely, but that’s a good problem to have, because it’s taking a lot of car trips and other things off the road. Right now, we’re engaged in the largest public transportation program in the country. As mayor, I immediately went to DC and I’ve lobbied Anthony Fox and the president on this, and we got for the first time in 17 years a federal grant for what will be the downtown connector here, finally connecting our lines, so you can go straight from the beach to East LA, you can go to Long Beach to Pasadena without switching twice. And we’re about to announce that we’re going to get it for the Wilshire Line as well, for the extension down Wilshire Boulevard of the Purple Line. We broke ground on the Crenshaw Line, we’re extending the Gold Line out in San Gabriel Valley. I announced that we will bring rail to LAX, and don’t believe, with all respect, the LA Times headlines. I even called the reporter, who said I don’t write the headlines. We have only plans to bring rail to LAX, and it said, blow to rail that one of seven, or two of seven options for rail were decided to not move forward because they were more expensive. So, those things are changing, I think, fundamentally how we’re looking at transportation.
And we’ve put down the marker on a couple things, too. I think, you know, the success, and I know they’re controversial, but they’ve been more and more embraced and they’ve been very successful for both folks in and out of the diamond lanes – the hot lanes are things that we’re having communities around LA County line up and saying, please let us put that in on our freeways now. To be able to wait for a subway to go in the 405 is going to be a long wait. We’re looking at tunneling in there, but that’s going to be a long time. When those carpool lanes open up and we get a rapid bus going through the Sepulveda Pass, I hope a lot of people will decide not to be stuck in their cars, and go from the Valley to UCLA in 10 minutes.
Morrison: With the ports, I understand the value of joint operations, of unifying the ports. You would have efficiencies of scale. But, how would that attract more trade as you had suggested? The trade’s already coming in.
Garcetti: So, in an ideal world, we would have a single port. I’m not proposing that and I think what we need is actually greater consolidation. We have a mayor’s race in Long Beach, so with a new board – we’re both under new searches for executive directors, two new mayors will be in – I think there’s a real moment for Long Beach and LA to stop competing with one another. Why? It’s kind of like the film industry, right? I’ve been working very hard, as many of you know, to bring more filming back to Los Angeles. We’ve had success even before we’ve expanded the state tax credit. But essentially, we’re living in a world where every state is trying to outdo the next, to the point where some of them are going so deep with their subsidies they’re actually cannibalizing their own budgets to do so. To have the prestige of filming, they’re actually taking money out of their basic services. We can’t be doing that between two ports too, where we try to undercut the rates so much that at a certain point we don’t have enough money to modernize these ports to make sure they’re the best they can be. We’re really competing regionally. The 70 percent of goods that come into our port, that’s for the Southwest of the United States, will be coming
in there no matter what. It’s that other 30 percent that we’re competing with the widening of the Panama Canal, with Mexican and Canadian ports, and eventually our East Coast ports. But today, we can get you 10 days quicker to the East Coast by coming into LA/Long Beach port and getting on a train or truck than going through the Panama Canal to the East Coast. So, even after it’s widened, I was thinking I should get t-shirts that say, I lost 10 days, ask me how. And we could tell you about the Port of LA.
Morrison: And the guy with the sandwich board has a job, too.
Garcetti: That’s exactly, that’s right. Figuring out a way that we can focus on what’s important, I think we took our eye off the business element of the port for a while. We’ve done some amazing things environmentally, but we need to make sure. Ports, if you go to Hong Kong, you will see the clothes that go into that port, that are shipped to France, being tagged, being put on the racks, price tags on them, and mechanically being put from the trucks onto the ship before they leave. They’re a generation or two ahead of us. We need to bring that technology here, because luckily, the rest of the United States doesn’t have that. We already are building one of the first automated terminals, so that it’ll actually be, the boxes will be taken and moved straight into a warehouse that will move them around before putting them on a truck without human hands being on them. And the union has supported this, because they know they can stay old fashioned and have no jobs in 30 years, or they can back an automated terminal because there’ll be new jobs that come with that, and support many millions of jobs here in the Southland. And to their credit, they’ve kind of been forward-looking at this. So, that’s the sort of investment I want to be making. We’re spending over $1 million a day in the port to modernize it and I’m going to make sure that’s a real cornerstone of our economic strategy going forward.
Morrison: In the nearly year since you’ve been in office, and you referenced this in one matter, did you come in thinking X and have been changed over to Y because of the realities that you have found? And maybe you can give us another example.
Garcetti: Not in any big macro way. I think there’s small issues where you learn something, like that was a dumb campaign promise, or I didn’t realize things worked that way. But luckily, by and large, I’ve been at City Hall for 12 years. So, you’ve got kind of the best, I hope, of a rookie and a veteran in me. I still have a very younger sense of wonderment about things and not looking at the world the way it is, but I’ve also been there 12 years. I’m the longest-serving elected official at City Hall now, which should scare you as much as it scares me to say, but welcome to the term limits that you voted on. But, it gives me an ability that there’s no place that I didn’t see things. What I was surprised about now, as a chief executive, was how much quicker you can do things as mayor. It’s not a two-year studying, drafting a piece of legislation, waiting, getting your eight votes. Most of the time you can pick up the phone and tell a general manager, do it. If they haven’t done it, why isn’t it done? And at the end of the day, you can hire and fire them.
I think the greatest surprise for me is how little coordination we’ve done regionally and how easy it is to do, how little convening power has been exercised in the past by City Hall, because in some ways that’s your strongest piece. People often say it’s a weak mayor system, it’s not. It’s strong on paper and it’s strong in implementation if you bring together the force of 87 other mayors, the force of the only city to have three top 25 universities and a dozen amazing institutions of higher learning. Those things make your job as mayor much easier, and I think the surprise I’ve had is this is actually, it’s a pretty open field for us to run down. There’s not as many barriers as people would think when you read about City Hall actually being there.
Morrison: I did what I think was the last interview with Mayor Yorty. And he said when he was traveling in the ’50s, people would say Los Angeles, is that anywhere near Hollywood? We still seem to have that perception. How do you want to make Los Angeles perceived beyond Hollywood? You talked about the British newspaper assessment of this, but how do you want us to be seen? We’re so much more than Hollywood.
Garcetti: I would say three themes, and we’re in the process of kind of a rebranding not because our brand isn’t strong, but maybe remarketing, I should say, Los Angeles. Because look at filming. Every
other state and country has a film office. We didn’t even have one and we’re wondering why it’s going away. Aerospace, we haven’t come together, and I pulled together a collaboration on aerospace of five counties, working with USC, with Annenberg and others, to bring together all of our aerospace and defense companies to compete for some of the retooling of manufacturing. We’re the manufacturing capital of America and people don’t talk about that.
But the three themes I would say are, one, I want people to think of LA as the place where creativity lives. And that comes from rovers that we put on Mars to fashion, the only place where you can go from design to red carpet in the world, to of course our more traditional creative industries like Hollywood, like music. Second is, I want the world to think of Los Angeles as their second home. We can make the demographic case better than any city in human history to that, because everybody, no matter where they come from, can find a place and people that remind them of home, that feel like home, and that make them want to invest here. I have no doubt in my mind that Chinese investment – first pick in America is Los Angeles. I’m going to be going there, I think, later in the fall. We haven’t picked the exact dates yet. But I had, for instance, a Chinese investor who came to my office. The interaction that we had on a personal level – I made him a cup of coffee, right, which my staff was horrified because if you travel to China it’s usually a big production with tea and somebody backs out never letting them see your back or their back. And the guy wrote on his blog that the mayor of LA had made him a cup of coffee and how friendly LA was and how much he loved it .And he’s investing considerable money here. So, we forget sometimes that we have to make – the advantage of LA is that this place feels like home and it demographically is home. It’s increasingly the gateway for Asians to Latin America, for Latin Americans to Asia. It’s the best geographical position on the face of the earth, given the current global economy. So, it’s where creativity lives; it’s your second home.
And then the third is, this will be the modern city. That’s something that I think we’ve lost and we have to get back. Whether it’s the operations of City Hall, whether it’s, you know, going after things like the Olympics, bringing in, you know, the world’s attention at signature festivals like our Made in America concert that we’re going to be doing here in Grand Park with Jay-Z.We’ve got to be on the cutting edge. We can’t be a city that is the filming capital of America, the entertainment capital of America, but filming happens elsewhere. We can’t be the music capital of the world, but everybody goes to Coachella and we don’t have a signature festival here. We can’t be the ideas factory and the patents capital of the world, and then everybody goes to South by Southwest. It is time for LA to kind of be that modern city to be everybody’s second home and also to make sure that we are the creative capital of the world.
Morrison: Won’t you please thank the mayor, Town Hall Los Angeles, and the wait staff?
http://www.townhall-la.org/sites/default/files/2014/Garcetti.Morrisontranscript.5122014.pdf
