Stellar Credit Ratings Lead to Millions in Taxpayer Savings

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Saving taxpayers millions of dollars in interest payments, Los Angeles County achieved its highest long-term credit ratings in a decade, thanks to an upgrade by Moody’s this week.

Moody’s joined Fitch and S&P, the Big Three credit rating agencies, in deeming the County to be very creditworthy and unlikely to default on its financial obligations. In upgrading the County’s rating from Aa2 to Aa1, Moody’s cited its “strong and stable financial position” and “strong management team that has positioned the County well to address ongoing challenges,” among other factors.

Treasurer and Tax Collector Joseph Kelly estimates every upgrade in the County’s long-term credit rating can slash interest and debt service payments on a $100 million loan by as much as $3 million over a 30-year period.

The Big Three also assigned the highest short-term rating to the County’s $800 million Tax and Revenue Anticipation Note (TRAN) issuance, which will finance current operations before tax revenues are received.

“Excellent credit ratings mean lower interest payments, saving the County millions of dollars that can instead be used to pay for critically needed public services,” said Board of Supervisors Chairman Mark Ridley-Thomas. “It also validates the County’s prudent, disciplined and conservative fiscal management with long-term strategic planning over the last several years.”

The credit ratings upgrade came after Board Chairman Ridley-Thomas, along with the County’s Chief Executive Officer Sachi Hamai, Auditor-Controller John Naimo, and Treasurer and Tax Collector Joseph Kelly met with representatives of the Big Three in New York late last month. Health Agency Director Mitch Katz, M.D. participated by teleconference.

They discussed the County’s efforts to build reserves, pre-fund long-term liabilities, and stabilize the Department of Health Services during a time of uncertainty over the fate of the Affordable Care Act. They also noted the County successfully went to voters seeking ongoing revenue for combatting homeless, which constitutes a threat to the solvency of the County with respect to the drain on resources associated with law enforcement and emergency health services.

The County, which has a budget of approximately $30 billion, has a track record of fiscally responsible practices, which allowed it to weather the Great Recession without substantial service cutbacks or any layoffs.

Impact of Cannabis Businesses

Board of Supervisors Chairman Mark Ridley-Thomas at June 6, 2017 meeting. Bryan Chan / Board of Supervisors

Los Angeles County Board of Supervisors Chairman Mark Ridley-Thomas issued the following statement regarding an ordinance prohibiting all cannabis businesses and activities in the unincorporated areas of the County. The ordinance also imposes reasonable regulations on personal cannabis cultivation while businesses are further studied for potential regulation.

Many of us here face a great task — that of implementing Prop. 64. The ban does not mean that we are reinstating the war on drugs or that we are opposing the vote of the people. We are trying to create rational, responsible, and accountable cannabis commerce. This is not a gold rush for businesses. It is the people of California calling for smart, responsible regulation of marijuana, and those who operate illegally are in direct opposition to this call for accountability, transparency, and responsibility.

This is particularly salient in the 2nd district, where both alcohol and marijuana businesses have operated irresponsibly for years, wreaking havoc on not only the quality of the neighborhoods, but the health and safety of our residents. We know this given our failed efforts to date to control the sale of cannabis in County unincorporated communities, which has been illegal since 2010. We also know this given our efforts to regulate alcohol sales with its well documented history of causing blight and increased crime in our disadvantaged communities.

The Board recognized the necessity of establishing enhanced standards of conduct for liquor stores with the recent adoption of the “Deemed Approved” Ordinance for pre-1992 liquor licenses. We can expect that the sale of cannabis will have comparable impact including increased crime, addiction and private sector disinvestment in neighborhood-serving commercial corridors.

And unlike alcohol, cannabis remains illegal under federal law, which adds to the difficulty of effectively regulating the business. There can be no doubt that businesses that operate outside the legal banking system and federal law and taxation regulations are particularly vulnerable to infiltration by organized crime and gangs.

The County needs to establish guidelines and regulations for the cannabis industry to minimize these anticipated negative impacts. We need rules focused on creating responsible and accountable cannabis commerce. Equally important, we cannot ignore the public safety and public health issues associated with cannabis. We can expect that the issues we confront as we move forward will be unique and more profound than has been the experience in other jurisdictions.

Likewise, we regulate personal cultivation, to the extent allowed by the law, because one’s right and choice to use marijuana does not negate their obligation to be a good neighbor. These are psychoactive substances with a pervasive odor that must be grown and kept in a responsible manner.

Los Angeles is not Denver or Seattle. The problems we face are far more dynamic and impactful, requiring a sustained investment of time and resources. We should look to the industry to provide the resources the County will need to address the impacts from the cultivation, distribution and sale of cannabis in those communities that allow it. The County must prepare itself, not just as it pertains to land use regulations, but in addressing the public health impacts on our youth and vulnerable populations, and with the increased resources that will be required to address the foreseeable demands places on public safety resources.

Legalization of cannabis in California will have a disproportional impact on low income communities and communities of color. We cannot let businesses profit off of these communities until we can effectively minimize these negative effects and regulate these businesses for the benefit of these neighborhoods.

Cutting-Edge Data Center Saves Millions

Board of Supervisors Chairman Mark Ridley-Thomas speaks at the unveiling of DataCenter1 in El Segundo. Photo by Diandra Jay / Board of Supervisors

Breaking new ground in the digital age, Los Angeles County unveiled Data Center One, modernizing its information technology infrastructure while saving taxpayers hundreds of millions of dollars. 

Located in El Segundo, the privately leased facility dubbed “DC1” will replace the County’s 49 data centers and provide greater security and efficiency for millions of documents and transactions, from health assessments to online book catalogue visits to pet adoptions.

Consolidating dozens of scattered data centers into a single facility operated by T5 Data Centers frees up to 67,000 square feet of space while expanding the County’s capacity to support 603 databases, store approximately 33 million documents, and process 83 million transactions per month. DC1 also has state-of-the-art energy efficiency features and enables fast access to new technologies and sophisticated data analysis tools to empower faster resource allocation, smarter decision-making and more efficient operations.

“We are on the path to modernizing countywide information technology, and we are doing it in a cutting-edge, cost effective and energy efficient way,” Board of Supervisors Chairman Mark Ridley-Thomas said as he cut the ribbon during the grand opening ceremony. “It’s the pinnacle of what public-private partnership should be.”

 “This facility will save the County hundreds of millions of dollars,” he added. “That means more dollars available to provide LA County residents with the goods and services they really need. Whether it is fighting homelessness, promoting child protection, or a variety of other initiatives, those resources will be put to better use.”

Chairman Ridley-Thomas co-authored the motion directing the County’s chief executive officer, chief information officer and Internal Services director to merge the County’s 49 data centers and consolidate the technology infrastructure of the County’s 37 departments into a single facility. The goal was to reduce the cost of hardware, software and operations; shift to more efficient computing platforms; use less energy and real estate; and boost cybersecurity.

Leasing the DC1 costs $2 million a year – far less expensive than the 58,000-square foot data center that the County’s previous CEO originally recommended building for over $200 million, not including power, cooling and operational expenses. Concerned that the original proposal was too expensive, oversized, and likely to become obsolete, Chair Ridley-Thomas asked the Board to consult an independent expert. Gartner Inc.’s analysis concluded that leasing no more than 10,000 square feet of space would be more efficient, both operationally and fiscally.

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Opportunity Knocks for Future EMT’s

Young Men from Los Angeles County’s Second District Attend an Orientation at Central Baptist Church in Carson

Young Men from Los Angeles County’s Second District Attend an Orientation at Central Baptist Church in Carson

For the first time, a unique pilot program to train underserved young men of color to become Emergency Medical Technicians is on its way to Los Angeles County. The program is a partnership between the Office of Los Angeles County Board of Supervisors Chairman Mark Ridley-Thomas and the Workers Education and Resource Center with funding support from the California Endowment.

“This pilot program is a win-win. Our young men of color deserve access to the best opportunities,” said Chairman Ridley-Thomas. “And our communities deserve first rate emergency medical technicians.”

On the heels of a successful recent program in Alameda County, 21 young men from Los Angeles County’s Second District and their accountability partners, made up of parents, friends or significant others, participated in the orientation and kickoff at Central Baptist Church in Carson. Representatives from the Los Angeles County Departments of Children and Family Services, Probation, and Fire were on hand to provide words of wisdom and to participate in the launch of the program.

The five month intensive program will include technical skill development, life skill building and culminate in EMT certification. The young men selected through a rigorous application process will earn a training stipend of $1,200 per month.

This group is the first of three groups that will participate in the pilot program in Los Angeles County’s Second District over the next two years.

Candlelight Vigil
25 Years After Civil Unrest

About 300 people joined Board of Supervisors Chairman Mark Ridley-Thomas in marking the 25th anniversary of the 1992 Civil Unrest in Los Angeles with a teach-in and a candlelight vigil.

Photo by Diandra Jay/Board of Supervisors

Photo by Diandra Jay/Board of Supervisors

“We come together to stand in solidarity, not to simply remember the events of 1992 but also to reflect on lessons learned after 25 years of recovery, revitalization and resilience,” Board Chair Ridley-Thomas said.

At the teach-in, the Academy Award-winning filmmaker of “OJ:  Made in America,”  Ezra Edelman, looked back on the turmoil. “Reliving, discussing and absorbing our history is the only way to move forward,” he said.

Photo by Diandra Jay/Board of Supervisors

Ezra Edelman. Photo by Diandra Jay/Board of Supervisors

Prof. Paul Ong, director of the UCLA Center for Neighborhood Knowledge, unveiled a study entitled “1992 Revisited,” which tracked socioeconomic changes between the time of the civil unrest and the present.

“Without the heroic efforts of community organizers and elected officials, conditions would be far worse; nonetheless, the unfortunate reality as evident in the empirical facts is that much more must be done to address the continued economic marginalization of South Los Angeles,” he said. “This will require a comprehensive, inclusive and coordinated effort, one that cuts across silos and institutional layers, and guided by a common vision anchored in a commitment to social justice.”

Paul Ong, Maria Elena Durazo, Marc Brown, Peter Hong and Rep. Karen Bass. Photo by Diandra Jay/Board of Supervisors

Paul Ong, Maria Elena Durazo, Marc Brown, Peter Hong and Rep. Karen Bass. Photo by Diandra Jay/Board of Supervisors

“We have come a long way in building local organizations to address issues of education, environmental justice, and other local issues,” Unite Here General Vice President Maria Elena Durazo said. “Unfortunately, the poverty level has grown in most of the communities that were impacted by the unrest. We have to fight for jobs that truly lift people out of poverty – and we have to give equal access to those good jobs to everyone in the community.”

US Rep. Karen Bass and CalState LA Director of Strategic Initiatives Peter Hong also spoke at the teach-in, hosted by KABC-7 anchor Marc Brown at the auditorium of the historic Golden State Mutual Life Insurance Building. Mayor Eric Garcetti also addressed participants.

Afterwards, teach-in attendees and members of the community went across the street for a candlelight vigil. Each carried a flame that illuminated the corner of Western and Adams, where a gas station was razed during the civil unrest.

Photo by Bryan Chan/Board of Supervisors

Photo by Bryan Chan/Board of Supervisors