March 9, 2025 • 27 mins
Michael Monks kicks off the hour with a recap of UCLA’s victory over USC to close out the Big Ten regular season before diving into Los Angeles’ deepening financial crisis. City Controller Kenneth Mejia joins to break down the city’s massive budget shortfall, overspending, and the alarming cycle of debt that could leave LA struggling to stay afloat.
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Speaker 1 (00:00):
You're listening to KFI AM six forty on demand.
Speaker 2 (00:04):
KFI AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks from KFI News.
We're with you till nine o'clock. Lots to get to
over the next two hours, starting with what just went
down in Westwood. Yes, this is a KFI Big Ten
men's basketball report. UCLA men just walloped USC ninety to
(00:28):
sixty three to close out the regular season in the
Big Ten. The Bruins are now twenty two and nine.
They finished the Big Ten conference season thirteen and seven. Meanwhile,
USC falls to under five hundred fifteen and sixteen and
seven and thirteen in conference play. With the postseason tournaments
just around the corner, the Bruins getting a little bit
(00:48):
of momentum. They're beating their crosstown rival also in Boston.
Right now, the Celtics are up on the Lakers, sixty
eight to fifty six. They're about midway through the third quarter. There,
keep an eye on that game if you're not listening
intently but would like an occasional update. That's what we're
here for. Beautiful, cool day here in southern California, lots
of sunshine. You know, like many of you, I've more
(01:12):
than once checked out that live stream from Big Bear
and the nest and the eagles and the babies and
all that snow is really something. And again, I've lived
here two years, so relatively new. Still, it's just an
amazing region that has that diversity of weather that you
can drive out and be in the ocean, drive out,
be in the desert, drive out and enjoy some sunshine
(01:34):
here in the city, or drive out and get a
little bit of snow. I am gonna talk about the
eagles because we've been watching them closely here in the
news media. It surprises me how much of a small
town Los Angeles can become. I can tell you if
we had something like this going on back home in Kentucky,
this would be wall to wall coverage for days and days.
(01:55):
And it's surprising to me that LA is so hooked
on this. You know, this is such a major, big city,
and I love when our small townness comes out and
we're watching this. I'm gonna confess, these eagles are starting
to scare me a little bit. There are some grotesque,
nightmarish scenes unfolding in that nest. I'm going to talk
about that coming up in the bottom of the hour,
(02:17):
so stay tuned for that. Let me know if you
think I'm crazy by joining our conversation on the iHeartRadio app.
Just click that talkback button. We'll place some of your
voicemails throughout the program today. Meanwhile, in downtown Los Angeles,
where there were a lot of women and their allies
marching on this International Women's Day, a lot of protests
(02:38):
against President Trump and his policies. I saw some of
those protests UPCOS and Personal Live downtown, was walking around
a bit, saw some of that action. A pretty good
crowd down there today. One thing we're gonna need to
be keeping an eye on is, of course, the national economy.
In our next hour, we will break down a brand
new forecast that came out from the UE Anderson School
(03:01):
of Management, the UCLA Anderson Forecast. They have broken down
the national economy what we might be expecting in the
coming months based on what President Trump has forecasted himself,
what he has alluded to. Beyond the national headlines, though,
we're going to break down what to expect right here
in sunny California, there are policies related to tariffs. There
(03:24):
are policies related to deportations that will impact California in
a way other states won't feel it. So we're going
to talk about that coming up in the eight o'clock hour.
The economy in La itself is also struggling. It was
struggling before these fires, but the fires have only reinforced
the challenges that we're feeling and that we will continue
(03:47):
to feel for the foreseeable future. I want to share
with you a brief story that might seem inconsequential with
all of the other headlines that go around, But this week,
the Los Angeles City Council, in a unanimous vote, voted
to find more money for crossing guards. Okay, that sounds nice, right.
(04:08):
We love crossing guards. You need them to conduct pedestrian
traffic on busy traffic school days. They approved emotion seeking
three point three million dollars just to maintain the current
staffing levels for the remainder of this school year. So
here we are midway through the second half, basically three
(04:28):
quarters of the school year is over. They need more
than three million dollars just to keep the current number
of crossing guards on the streets. Okay again, yeah, we
should have the crossing guards, right, but there's not some
checking account that they just write a check from and
then fully fund three point three million dollars to keep
(04:50):
those crossing guards on the street. So this resolution that
was voted for at City Hall by a vote of
fourteen to zero simply direct the City Administrator's office to
find three point three million dollars to maintain the current
staffing levels of crossing guards. Now, in a city as
(05:12):
large and rich as Los Angeles, should the city administrator
be able to find three point three million dollars to
fund the crossing guards for the remainder of the fiscal
year or excuse me, the school year.
Speaker 3 (05:23):
Yeah?
Speaker 2 (05:24):
Probably, But the city government of Los Angeles is not
so rich. The City of Los Angeles is broke. You
hear me say this all the time. It is bad.
So that office has to find three point three million
dollars when they are basically already exploring how to borrow
money to pay off legal settlements that are continuing to
(05:47):
pile up. When they cannot keep your street lights on,
when they cannot repair your sidewalks, when they cannot, according
to some in the Fire department, fully fund their fire
department now go off and find three point three million
dollars to keep the crossing guards on the street. Apparently,
(06:11):
the budget shortfall involving crossing guards was created through wages
and bonuses that were paid out to those staff, and
the LA Department of Transportation is said that funding will
be fully spent this month, and if that shortfall is
not filled, it will require changes to hiring and deployment.
(06:31):
In other words, they won't be hiring people, or they'll
hire fewer people, and there will be fewer crossing guards
in certain parts of our community. Now, last year, the
city tried to increase safety for its students. The Department
of Transportation installed some street safety projects at more than
(06:52):
one hundred and eighty intersections around forty schools. They added
two hundred and fifty speed humps near ninety two schools
where speeding has been identify is a known issue, and
they hired more than five hundred crossing guards. When that happened,
they said, this is the widest deployment of crossing guards
we've had in over a decade, and we see how
(07:14):
important it is to have these crossing guards because we
saw this crash near Hancock Park elementary school where a
woman was struck and killed by a car, her six
year old daughter critically injured. You hear me almost every
week if you listen regularly on Saturday nights, read out
(07:38):
the pedestrians that have been killed over the past several days.
Crossing guards are important, so important that they decided to
hire a bunch more and then pay them more. But
now they're going to run out of money. And I,
(07:58):
as someone who watches city Hall on the regular for you,
I'm not sure where they're going to find this money. Now.
Sometimes we're surprised, Right, there's some magic fund somewhere and
it's presented to the city council for consideration and they
usually approve it. But to just direct a city officer
(08:18):
to find more than three million dollars when they have
the type of budget crunch they're dealing with, especially to
fund something as critically important as keeping your children safe
when they walk to school, that's going to be a
tough tall order, and it's something you need to pay
(08:39):
attention to the City of Los Angeles and its financial situation.
It's not good. City Controller Kenneth Mahea released a revenue
forecast report for this month and He says that the
current fiss school year that's July first, from last year
(09:01):
through June thirtieth of this year, the current fiscal year
will have a revenue shortfall of one hundred and forty
million dollars. That is one hundred and forty million dollars
that the city thought was coming in that is not
coming in to this budget wish, by the way, was
(09:24):
a budget approved very pessimistically already with a bad economic outlook,
a bad financial outlook, and the controller says it's only
gotten worse. So I want to know more from city
Controller Kenneth Mahea when we deal with issues about crossing
(09:44):
guards and suddenly needing more than three million dollars to
keep all the crossing guards on the street, with a
two and a half months of school left, how will
the city do it? Well, he's here, he's going to
join us, going to talk to him about the city's
financial state and just how challenging it is. And then
(10:06):
we'll get to these nightmarish eagles in Big Bear. They're
terrifying me at this point. I'm really scared of these eagles.
We'll talk about that this hour as well. To end
the hour on a little bit of a lighter note.
Speaker 1 (10:19):
You're listening to KFI AM six forty on demand.
Speaker 2 (10:24):
AM I AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks from KFI News.
I'm with you till nine o'clock to night. Thanks for
being with us. La was going broke before the wildfires
and the natural disaster has not helped. So what can
we expect from this cash strapped city that is about
(10:44):
to create yet another challenging budget. We're joined by city
Controller Kenneth Mahea. Controller Kenneth Mohea, Thanks so much for
coming back on KFI with us.
Speaker 3 (10:53):
Thank you guys for having me.
Speaker 2 (10:55):
So last time we talked was the autumn and things
were not looking good financially for La City Hall. I
suspect things haven't improved. What can you tell us?
Speaker 3 (11:06):
Yeah, so you know, pretty much the same trend. It's
not looking greats for us. We just released our revenue
forecasts for how much money we're going to collect you know,
this fiscal year and then also what we're projecting next
fook year and in summer. We're projecting to end this
fiscal year one hundred and forty million dollars below what
(11:30):
was in the adopted budget for general fund revenues. And
then for our next fiscal year, we're projecting to be
actually seventy three million dollars below you know, our current
estimates for this fiscal year. So you know, there are
a lot of reasons why for this discal year, sales
(11:50):
tax and business tax took a big hit. We're actually
ninety two million dollars below what we are budgeting for
for this fiscal year, and it could be due to
you know, increase higher prices, the uncertainty of the new administration.
You know, what we found is that actually household are
are cutting back spending, especially households in the bottom half
(12:14):
of our population, our cutting back on spending, and so
a lot of economy sensitive revenues are as highly optimistic
as they were. And so you know, and for NEXTPSK
for year two, like I said, we are projecting seventy
three million dollars below our current ending and that's because
(12:36):
we are projecting grants, especially federal grants to deplete this
fiscal year, mainly related to our COVID recovery funds that
we're winding down. But we don't know if we're going
to get any more federal grants right or grant receipts
in the coming risk of year. So overall we're seeing
a lot of our revenue stay flat going into the future.
Speaker 2 (12:56):
We've already seen some local school districts have to cut
staff because they had been lying so long on that
COVID money. So we know the types of detrimental impacts
that the loss of that funding can have for folks
who have not been able to make up for it
on their own. I know that LA's financial situation has
been troubled for a while. I mean, there were conversations
at this time last year as that fiscal year's budget
(13:18):
talks started, and then we have this disaster I know
in La City proper, the Palisades fire. Of course, there
was the Eaton fire in the county as well, but
in La specifically, this is something that hadn't even been
factored into an already tight budget. What has that fire
done to our financial outlook?
Speaker 3 (13:38):
Right?
Speaker 4 (13:38):
So so far based on what we see and especially
in the latest financial status report from the CEO's office,
is you know, through February fourteenth, estimates relating overall costs
to the city is about two hundred and eighty two
million dollars, and so that's just into property down Injra,
(14:00):
structural damage that belonged to the city, and also payroll
for departments who had to respond to that. So we'st
you know, that's that's a literal hit that you'll see
if the city's finances. The good thing is though, is
that they came to some of the fire recovery and responses.
The pass administration and the current one you know, basically
(14:22):
promised to help cover the cost recovery t one hundred
and eighty days. What we are seeing now is well,
how much is this going to impact this when it
comes to future revenues?
Speaker 3 (14:36):
Right? You know, if we lost homes and property in
the policies, that is going to affect property taxes, right.
We know that we lost businesses that can affect your
business tax revenue. We know that it's going to affect
consumers who shop in the policies and they don't have
anywhere else to go, and so you are seeing potential
(14:56):
decrease in sales tax too. So you know, those are
just some of the implications of what we can see
because of these wildfires that I had on the Palisades
as it relates to the city. So we'll be monitoring
that and we'll let everyone know. But definitely it's it's
(15:17):
not good.
Speaker 2 (15:18):
You've mentioned some changes from one presidential administration to the next,
and although we expect some compensation I suppose for some
of the expenses incurred in the early response of those fires,
I've seen pessimistic expressions at city Hall about whether that
would come through. We've heard some concerns about whether President
Trump might not like LA so much for some of
(15:41):
its policies that he doesn't agree with, particularly the sanctuary
city policy. I know that this can't be reflected in
the data right now, but is your sense that any
type of federal funding could be jeopardized because of politics,
You know, anything could.
Speaker 3 (15:55):
Be jepardized based on politics or how people see anything.
You know, For the city in general, when it comes
to federal funding, it's not a large percentage of our overall,
you know, twelve point nine million dollar annual budget and so,
but it is especially in the air in relations to
the fire company. Most federal funds will be crucial because
(16:19):
the city basically, you know, we front fund a lot
of things and we pay a lot of things. And
if we know that our piggy banks are not as
great as they need to be, then the front funding
can pus an issue if that money is not going
to come. But we'll be monitoring to see if those
funds come in and when they come in and keeping
people on the you know, updated on that status.
Speaker 1 (16:40):
Well.
Speaker 2 (16:41):
One area that can be reflected in your data if
even if it's not yet is the sales tax, as
you noted, which hasn't been as great as the city
would like. But if the economy takes a turn and
people feel even more pinched in their wallets, they're not
going to be spending as much. And then la is
a global city. We have a major port, we have
a major airport, and this is a president who loves tariffs.
(17:06):
I mean, are there concerns about the global economy and
his position on certain issues that could impact us locally economically.
Speaker 3 (17:15):
Yeah, I mean definitely. I mean there's some of the
reasons why we make our we made our projections right.
Those policies on TIFFs we can then get passed on
to locals with their businesses or local consumer which can
have an effect on you know, spending and in turn
lead to less revenues for you know, the city because
(17:37):
there's going to be less in business taxes or less
in sales tax. So definitely the terroriffs are concerned the
spending cuts on funding and receive the the oversight on
an immigration as well. You know, everything especially in La
can have a big effect on consumer confidence and spending,
(18:00):
especially in this economy, and that all could have a
negative effect on our city's revenues and our budget than
what we could spend them.
Speaker 2 (18:09):
So that's high level, big picture stuff. But when can
you expect your street lights to be turned back on
in this dark city? Street repairs or more funding for
your fire department will continue with La City Controller Kenneth Mohea.
Speaker 1 (18:22):
Next, you're listening to KFI AM six forty on demand.
Speaker 2 (18:27):
KFI AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks with until
nine o'clock tonight more on the City of La and
its quest to find nickels and dimes and the couch
cushions at city Hall. We're talking with La City Controller
Kenneth Mahia. I want to take these numbers that you
(18:48):
analyze and put out and contextualize them for the audience
in ways that they can recognize that they see the
budget situation that the city faces, and a lot of
that can be visualize through the services that they are
getting or are not getting. And I know that there
were some problems with you know, last year animal services
(19:11):
cuts in various departments that people saw the impact of.
I'm wondering, do you anticipate tighter city services because of
this economic outlook for the city? Now?
Speaker 3 (19:23):
Yeah, so, so as mentioned and just so your viewers know,
and just a little financial education, with the city budgets
a higher revenue amount, they will try to spend that amount,
and so if revenues are actually not coming in and
meeting that high revenue amount, then we are going to
(19:45):
end in a shortfall because the city is still going
to try to spend. Then however, what ends up happening
is we see that the money's not coming in. So
all that money that was budgeted and all the spending
that these departments were going to do, especially some of
these underfunded other staff departs we're going to do, they
actually have to end up taking a hit, you know,
(20:07):
that could be in the form of freezing their hiring.
It could be in the form of cutting their positions
so that that money can be reappropriated to cover over
the over studding. And sort of that's what we saw
last year when when we first talked, and then what
we're seeing now and if this follows suit, we need
to find that money to cover for that revenue shortfall
(20:31):
and that can either come in the way of tapping
into our reserve fund. Right think about it as like
your household piggy emergency bank that you have, or it
could be in through like I said, stopping departments from spending,
and that could be through not letting them hire even
though the departments are short staff and they can't provide
the crucial services. Right. And so when you ask the will,
(20:54):
will this financial situation you know continue or worse and
or you know it can't get any better because we
are we definitely need the funding, we need the resources
across the board. And what we're seeing is if we're
not getting there, where we have to end up cutting
spending and cutting positions, which in turn leads to less
(21:15):
services or resources for the community.
Speaker 2 (21:18):
Well, look, I mean some of these positions that could
be in jeopardy or have already been eliminated or frozen.
I mean, yeah, these might be people who are answering
phones or doing scheduling for managers or whatever, and God
bless those people. But we're also talking about public facing individuals.
I live in downtown LA and it is shockingly dark
in some places because the street lights are out, and
(21:38):
you know, there doesn't seem to be a comprehensive plan
to deal with that. It seems like something people would
want to deal with. But my understanding is there isn't
money or resources for that, So how do we fix that? Right?
Speaker 3 (21:52):
And in the street lighting, they got a hit to
their operating budget this fiscal year, so they got to
cut too, And you know, it's going to.
Speaker 4 (22:03):
Take people to lobby the the people who.
Speaker 3 (22:09):
Hold the power on the budget and the spending, and
that is the gifting council members and the mayor. Right
in my office, we provide you with the transparency and
the numbers and you know, the data, and at the
end of the day, it's going to be a well,
are people going to fight for more resources for streetlighting?
Are they going to fight for more resources for street services, meditation,
(22:31):
for the fire department, et cetera, et cetera. And so
that's what that's what it's going to take. And the
budget's going to drop next month and we're going to
tell everyone, you know, this is the proposal, right, And
so I would say people now need to start making
their voices heard, understanding how the budget works. And we
actually have a you know, we day a town home
(22:53):
with a PowerPoint slights and we could send that to
you or anyone who wants to see it. Pretty much,
we tell you how the budget works, how it's builken down,
and you can get involved. But like I said, those
sixteen people liketed officials are the people will hold the
power to the budget and how the city spent.
Speaker 2 (23:10):
I watched every budget meeting last year. I watched your
analysis of them also. I mean it's very wonky. The
meetings are very long, they are laborious, but they are important.
I certainly learned a lot about this city's governance and
people's concerns and where we might be lacking this year.
That's certainly played out. It looks like a tighter budget ahead.
Before I let you run, I know I've probably kept
you longer than I said it would, but if you
(23:31):
can stick for one more question, I mean I'm seeing
some heavy issues weighing on the city as they begin
this obviously recovery from the wildfires. Two increased attention on
the fire departments budgeting, and three, how on earth can
this city even begin to prepare for the Olympics in
(23:52):
twenty twenty eight when they've got this dire financial situation?
I mean, am I right in that thinking that those
are three pretty significant areas that will be considered?
Speaker 3 (24:01):
Yeah? I mean you mentioned those are all three very
big issues and concerns that we may not have, you know,
maybe with the exception of the Olympics. But the other
two that you mentioned didn't force see. We did force
see though, and I didn't warn everyone that there was
going to be an operating budget cut in the fire department.
(24:22):
So that's something I've been talking about even since last April.
But you know, the fires, we didn't. Who knew there
was going to be the largest natural disaster for our
city in January? Right? So all these things you mentioned,
the recovery from the fires, the department budget for the
(24:43):
fire department, and the Olympics. So there are all things
that are going to affect the city financially, and if
we want to be able to succeed and move forward
and be prepared for the next big disaster or even
the Olympics or any other big event. Then that is
going to take proper planning and proper budgeting in order
(25:05):
in order to get there. But I think it's really
important that our elected officials and the public knows what
their money is going to be spent on, so that
way they're not shocked or surprised when something happens and
then they look at that department who is responsible for it,
and they say, Okay, that department is under funded. Oh
that department actually got their budget co or they got
(25:28):
their positions eliminated. Right. So I think it's really good
going to come down to transparency and education on what
the city is doing with their money in order to
tackle not only these three issues, but any issue everything
touches money in the city. So you know, we'll be
here as a source of data and a source of
where people can go to learn about the city standards.
Speaker 2 (25:50):
Kenneth Mahia is the LA City Controller. I know you'll
be keeping an eye on the budget process. We'll be
doing that too. Hopefully we'll get to talk again as
we start to see the picture materialize more over the
coming weeks.
Speaker 3 (26:01):
Yeah, and I just want to make a plug. If
you all go to your browser and you want to
learn more about the city finances and the city's budget process,
just type in your browser dot ly forward flash Controller
town Hall seb twenty seven, and if you put all
that in lowercase, you can see a PowerPoint presentation on
(26:22):
the city's budget, the city's budget process, the finances, and
then we even do a breakdown on what happened to
the fire department budget.
Speaker 2 (26:28):
Thank you so much for taking the time with us.
We do appreciate it, all right, Mike, thanks you. And
again that was City Controller Kenneth Mahea talking to me
in a recorded interview from earlier this week. If you
missed the first part, you want to hear the whole thing,
We'll make sure that we have that on the podcast
at KFI AM sixty dot com. And I also told
(26:49):
you at the bottom of the hour we'd be talking
about the fears I have the nightmares I'm having about
these eagles and big Bear. Please stick around. We're going
to talk about these eagles. Of course, we get some
more news, some important stuff to get into, including the
fact that everybody in La County is going to be
paying a higher tax in the next few weeks. No
matter how old you are, no matter what your job is,
no matter what your property ownership status is. A tax
(27:11):
is going up and it's related to homelessness. And speaking
of homelessness, a scathing audit has come out again. Another one, yes,
another one about how poorly managed homeless funds are in
the City of La and the County of LA. We'll
talk about that, and then we have an economic forecast.
What can President Trump's policies on tariffs and deportations mean
(27:33):
to the state of California and the city of Los Angeles.
We'll talk to the director of the UCLA Anderson Forecast
about specific impacts on the Golden State. That's coming up
in the next hour right here on Michael Monks Reports
with until nine o'clock tonight on KFI AM six forty
Speaker 1 (27:48):
KFI AM six forty on demand
You're listening to KFI AM six forty on demand.
Speaker 2 (00:04):
KFI AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks from KFI News.
We're with you till nine o'clock. Lots to get to
over the next two hours, starting with what just went
down in Westwood. Yes, this is a KFI Big Ten
men's basketball report. UCLA men just walloped USC ninety to
(00:28):
sixty three to close out the regular season in the
Big Ten. The Bruins are now twenty two and nine.
They finished the Big Ten conference season thirteen and seven. Meanwhile,
USC falls to under five hundred fifteen and sixteen and
seven and thirteen in conference play. With the postseason tournaments
just around the corner, the Bruins getting a little bit
(00:48):
of momentum. They're beating their crosstown rival also in Boston.
Right now, the Celtics are up on the Lakers, sixty
eight to fifty six. They're about midway through the third quarter. There,
keep an eye on that game if you're not listening
intently but would like an occasional update. That's what we're
here for. Beautiful, cool day here in southern California, lots
of sunshine. You know, like many of you, I've more
(01:12):
than once checked out that live stream from Big Bear
and the nest and the eagles and the babies and
all that snow is really something. And again, I've lived
here two years, so relatively new. Still, it's just an
amazing region that has that diversity of weather that you
can drive out and be in the ocean, drive out,
be in the desert, drive out and enjoy some sunshine
(01:34):
here in the city, or drive out and get a
little bit of snow. I am gonna talk about the
eagles because we've been watching them closely here in the
news media. It surprises me how much of a small
town Los Angeles can become. I can tell you if
we had something like this going on back home in Kentucky,
this would be wall to wall coverage for days and days.
(01:55):
And it's surprising to me that LA is so hooked
on this. You know, this is such a major, big city,
and I love when our small townness comes out and
we're watching this. I'm gonna confess, these eagles are starting
to scare me a little bit. There are some grotesque,
nightmarish scenes unfolding in that nest. I'm going to talk
about that coming up in the bottom of the hour,
(02:17):
so stay tuned for that. Let me know if you
think I'm crazy by joining our conversation on the iHeartRadio app.
Just click that talkback button. We'll place some of your
voicemails throughout the program today. Meanwhile, in downtown Los Angeles,
where there were a lot of women and their allies
marching on this International Women's Day, a lot of protests
(02:38):
against President Trump and his policies. I saw some of
those protests UPCOS and Personal Live downtown, was walking around
a bit, saw some of that action. A pretty good
crowd down there today. One thing we're gonna need to
be keeping an eye on is, of course, the national economy.
In our next hour, we will break down a brand
new forecast that came out from the UE Anderson School
(03:01):
of Management, the UCLA Anderson Forecast. They have broken down
the national economy what we might be expecting in the
coming months based on what President Trump has forecasted himself,
what he has alluded to. Beyond the national headlines, though,
we're going to break down what to expect right here
in sunny California, there are policies related to tariffs. There
(03:24):
are policies related to deportations that will impact California in
a way other states won't feel it. So we're going
to talk about that coming up in the eight o'clock hour.
The economy in La itself is also struggling. It was
struggling before these fires, but the fires have only reinforced
the challenges that we're feeling and that we will continue
(03:47):
to feel for the foreseeable future. I want to share
with you a brief story that might seem inconsequential with
all of the other headlines that go around, But this week,
the Los Angeles City Council, in a unanimous vote, voted
to find more money for crossing guards. Okay, that sounds nice, right.
(04:08):
We love crossing guards. You need them to conduct pedestrian
traffic on busy traffic school days. They approved emotion seeking
three point three million dollars just to maintain the current
staffing levels for the remainder of this school year. So
here we are midway through the second half, basically three
(04:28):
quarters of the school year is over. They need more
than three million dollars just to keep the current number
of crossing guards on the streets. Okay again, yeah, we
should have the crossing guards, right, but there's not some
checking account that they just write a check from and
then fully fund three point three million dollars to keep
(04:50):
those crossing guards on the street. So this resolution that
was voted for at City Hall by a vote of
fourteen to zero simply direct the City Administrator's office to
find three point three million dollars to maintain the current
staffing levels of crossing guards. Now, in a city as
(05:12):
large and rich as Los Angeles, should the city administrator
be able to find three point three million dollars to
fund the crossing guards for the remainder of the fiscal
year or excuse me, the school year.
Speaker 3 (05:23):
Yeah?
Speaker 2 (05:24):
Probably, But the city government of Los Angeles is not
so rich. The City of Los Angeles is broke. You
hear me say this all the time. It is bad.
So that office has to find three point three million
dollars when they are basically already exploring how to borrow
money to pay off legal settlements that are continuing to
(05:47):
pile up. When they cannot keep your street lights on,
when they cannot repair your sidewalks, when they cannot, according
to some in the Fire department, fully fund their fire
department now go off and find three point three million
dollars to keep the crossing guards on the street. Apparently,
(06:11):
the budget shortfall involving crossing guards was created through wages
and bonuses that were paid out to those staff, and
the LA Department of Transportation is said that funding will
be fully spent this month, and if that shortfall is
not filled, it will require changes to hiring and deployment.
(06:31):
In other words, they won't be hiring people, or they'll
hire fewer people, and there will be fewer crossing guards
in certain parts of our community. Now, last year, the
city tried to increase safety for its students. The Department
of Transportation installed some street safety projects at more than
(06:52):
one hundred and eighty intersections around forty schools. They added
two hundred and fifty speed humps near ninety two schools
where speeding has been identify is a known issue, and
they hired more than five hundred crossing guards. When that happened,
they said, this is the widest deployment of crossing guards
we've had in over a decade, and we see how
(07:14):
important it is to have these crossing guards because we
saw this crash near Hancock Park elementary school where a
woman was struck and killed by a car, her six
year old daughter critically injured. You hear me almost every
week if you listen regularly on Saturday nights, read out
(07:38):
the pedestrians that have been killed over the past several days.
Crossing guards are important, so important that they decided to
hire a bunch more and then pay them more. But
now they're going to run out of money. And I,
(07:58):
as someone who watches city Hall on the regular for you,
I'm not sure where they're going to find this money. Now.
Sometimes we're surprised, Right, there's some magic fund somewhere and
it's presented to the city council for consideration and they
usually approve it. But to just direct a city officer
(08:18):
to find more than three million dollars when they have
the type of budget crunch they're dealing with, especially to
fund something as critically important as keeping your children safe
when they walk to school, that's going to be a
tough tall order, and it's something you need to pay
(08:39):
attention to the City of Los Angeles and its financial situation.
It's not good. City Controller Kenneth Mahea released a revenue
forecast report for this month and He says that the
current fiss school year that's July first, from last year
(09:01):
through June thirtieth of this year, the current fiscal year
will have a revenue shortfall of one hundred and forty
million dollars. That is one hundred and forty million dollars
that the city thought was coming in that is not
coming in to this budget wish, by the way, was
(09:24):
a budget approved very pessimistically already with a bad economic outlook,
a bad financial outlook, and the controller says it's only
gotten worse. So I want to know more from city
Controller Kenneth Mahea when we deal with issues about crossing
(09:44):
guards and suddenly needing more than three million dollars to
keep all the crossing guards on the street, with a
two and a half months of school left, how will
the city do it? Well, he's here, he's going to
join us, going to talk to him about the city's
financial state and just how challenging it is. And then
(10:06):
we'll get to these nightmarish eagles in Big Bear. They're
terrifying me at this point. I'm really scared of these eagles.
We'll talk about that this hour as well. To end
the hour on a little bit of a lighter note.
Speaker 1 (10:19):
You're listening to KFI AM six forty on demand.
Speaker 2 (10:24):
AM I AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks from KFI News.
I'm with you till nine o'clock to night. Thanks for
being with us. La was going broke before the wildfires
and the natural disaster has not helped. So what can
we expect from this cash strapped city that is about
(10:44):
to create yet another challenging budget. We're joined by city
Controller Kenneth Mahea. Controller Kenneth Mohea, Thanks so much for
coming back on KFI with us.
Speaker 3 (10:53):
Thank you guys for having me.
Speaker 2 (10:55):
So last time we talked was the autumn and things
were not looking good financially for La City Hall. I
suspect things haven't improved. What can you tell us?
Speaker 3 (11:06):
Yeah, so you know, pretty much the same trend. It's
not looking greats for us. We just released our revenue
forecasts for how much money we're going to collect you know,
this fiscal year and then also what we're projecting next
fook year and in summer. We're projecting to end this
fiscal year one hundred and forty million dollars below what
(11:30):
was in the adopted budget for general fund revenues. And
then for our next fiscal year, we're projecting to be
actually seventy three million dollars below you know, our current
estimates for this fiscal year. So you know, there are
a lot of reasons why for this discal year, sales
(11:50):
tax and business tax took a big hit. We're actually
ninety two million dollars below what we are budgeting for
for this fiscal year, and it could be due to
you know, increase higher prices, the uncertainty of the new administration.
You know, what we found is that actually household are
are cutting back spending, especially households in the bottom half
(12:14):
of our population, our cutting back on spending, and so
a lot of economy sensitive revenues are as highly optimistic
as they were. And so you know, and for NEXTPSK
for year two, like I said, we are projecting seventy
three million dollars below our current ending and that's because
(12:36):
we are projecting grants, especially federal grants to deplete this
fiscal year, mainly related to our COVID recovery funds that
we're winding down. But we don't know if we're going
to get any more federal grants right or grant receipts
in the coming risk of year. So overall we're seeing
a lot of our revenue stay flat going into the future.
Speaker 2 (12:56):
We've already seen some local school districts have to cut
staff because they had been lying so long on that
COVID money. So we know the types of detrimental impacts
that the loss of that funding can have for folks
who have not been able to make up for it
on their own. I know that LA's financial situation has
been troubled for a while. I mean, there were conversations
at this time last year as that fiscal year's budget
(13:18):
talks started, and then we have this disaster I know
in La City proper, the Palisades fire. Of course, there
was the Eaton fire in the county as well, but
in La specifically, this is something that hadn't even been
factored into an already tight budget. What has that fire
done to our financial outlook?
Speaker 3 (13:38):
Right?
Speaker 4 (13:38):
So so far based on what we see and especially
in the latest financial status report from the CEO's office,
is you know, through February fourteenth, estimates relating overall costs
to the city is about two hundred and eighty two
million dollars, and so that's just into property down Injra,
(14:00):
structural damage that belonged to the city, and also payroll
for departments who had to respond to that. So we'st
you know, that's that's a literal hit that you'll see
if the city's finances. The good thing is though, is
that they came to some of the fire recovery and responses.
The pass administration and the current one you know, basically
(14:22):
promised to help cover the cost recovery t one hundred
and eighty days. What we are seeing now is well,
how much is this going to impact this when it
comes to future revenues?
Speaker 3 (14:36):
Right? You know, if we lost homes and property in
the policies, that is going to affect property taxes, right.
We know that we lost businesses that can affect your
business tax revenue. We know that it's going to affect
consumers who shop in the policies and they don't have
anywhere else to go, and so you are seeing potential
(14:56):
decrease in sales tax too. So you know, those are
just some of the implications of what we can see
because of these wildfires that I had on the Palisades
as it relates to the city. So we'll be monitoring
that and we'll let everyone know. But definitely it's it's
(15:17):
not good.
Speaker 2 (15:18):
You've mentioned some changes from one presidential administration to the next,
and although we expect some compensation I suppose for some
of the expenses incurred in the early response of those fires,
I've seen pessimistic expressions at city Hall about whether that
would come through. We've heard some concerns about whether President
Trump might not like LA so much for some of
(15:41):
its policies that he doesn't agree with, particularly the sanctuary
city policy. I know that this can't be reflected in
the data right now, but is your sense that any
type of federal funding could be jeopardized because of politics,
You know, anything could.
Speaker 3 (15:55):
Be jepardized based on politics or how people see anything.
You know, For the city in general, when it comes
to federal funding, it's not a large percentage of our overall,
you know, twelve point nine million dollar annual budget and so,
but it is especially in the air in relations to
the fire company. Most federal funds will be crucial because
(16:19):
the city basically, you know, we front fund a lot
of things and we pay a lot of things. And
if we know that our piggy banks are not as
great as they need to be, then the front funding
can pus an issue if that money is not going
to come. But we'll be monitoring to see if those
funds come in and when they come in and keeping
people on the you know, updated on that status.
Speaker 1 (16:40):
Well.
Speaker 2 (16:41):
One area that can be reflected in your data if
even if it's not yet is the sales tax, as
you noted, which hasn't been as great as the city
would like. But if the economy takes a turn and
people feel even more pinched in their wallets, they're not
going to be spending as much. And then la is
a global city. We have a major port, we have
a major airport, and this is a president who loves tariffs.
(17:06):
I mean, are there concerns about the global economy and
his position on certain issues that could impact us locally economically.
Speaker 3 (17:15):
Yeah, I mean definitely. I mean there's some of the
reasons why we make our we made our projections right.
Those policies on TIFFs we can then get passed on
to locals with their businesses or local consumer which can
have an effect on you know, spending and in turn
lead to less revenues for you know, the city because
(17:37):
there's going to be less in business taxes or less
in sales tax. So definitely the terroriffs are concerned the
spending cuts on funding and receive the the oversight on
an immigration as well. You know, everything especially in La
can have a big effect on consumer confidence and spending,
(18:00):
especially in this economy, and that all could have a
negative effect on our city's revenues and our budget than
what we could spend them.
Speaker 2 (18:09):
So that's high level, big picture stuff. But when can
you expect your street lights to be turned back on
in this dark city? Street repairs or more funding for
your fire department will continue with La City Controller Kenneth Mohea.
Speaker 1 (18:22):
Next, you're listening to KFI AM six forty on demand.
Speaker 2 (18:27):
KFI AM six forty live everywhere on the iHeartRadio app.
This is Michael Monks Reports. I'm Michael Monks with until
nine o'clock tonight more on the City of La and
its quest to find nickels and dimes and the couch
cushions at city Hall. We're talking with La City Controller
Kenneth Mahia. I want to take these numbers that you
(18:48):
analyze and put out and contextualize them for the audience
in ways that they can recognize that they see the
budget situation that the city faces, and a lot of
that can be visualize through the services that they are
getting or are not getting. And I know that there
were some problems with you know, last year animal services
(19:11):
cuts in various departments that people saw the impact of.
I'm wondering, do you anticipate tighter city services because of
this economic outlook for the city? Now?
Speaker 3 (19:23):
Yeah, so, so as mentioned and just so your viewers know,
and just a little financial education, with the city budgets
a higher revenue amount, they will try to spend that amount,
and so if revenues are actually not coming in and
meeting that high revenue amount, then we are going to
(19:45):
end in a shortfall because the city is still going
to try to spend. Then however, what ends up happening
is we see that the money's not coming in. So
all that money that was budgeted and all the spending
that these departments were going to do, especially some of
these underfunded other staff departs we're going to do, they
actually have to end up taking a hit, you know,
(20:07):
that could be in the form of freezing their hiring.
It could be in the form of cutting their positions
so that that money can be reappropriated to cover over
the over studding. And sort of that's what we saw
last year when when we first talked, and then what
we're seeing now and if this follows suit, we need
to find that money to cover for that revenue shortfall
(20:31):
and that can either come in the way of tapping
into our reserve fund. Right think about it as like
your household piggy emergency bank that you have, or it
could be in through like I said, stopping departments from spending,
and that could be through not letting them hire even
though the departments are short staff and they can't provide
the crucial services. Right. And so when you ask the will,
(20:54):
will this financial situation you know continue or worse and
or you know it can't get any better because we
are we definitely need the funding, we need the resources
across the board. And what we're seeing is if we're
not getting there, where we have to end up cutting
spending and cutting positions, which in turn leads to less
(21:15):
services or resources for the community.
Speaker 2 (21:18):
Well, look, I mean some of these positions that could
be in jeopardy or have already been eliminated or frozen.
I mean, yeah, these might be people who are answering
phones or doing scheduling for managers or whatever, and God
bless those people. But we're also talking about public facing individuals.
I live in downtown LA and it is shockingly dark
in some places because the street lights are out, and
(21:38):
you know, there doesn't seem to be a comprehensive plan
to deal with that. It seems like something people would
want to deal with. But my understanding is there isn't
money or resources for that, So how do we fix that? Right?
Speaker 3 (21:52):
And in the street lighting, they got a hit to
their operating budget this fiscal year, so they got to
cut too, And you know, it's going to.
Speaker 4 (22:03):
Take people to lobby the the people who.
Speaker 3 (22:09):
Hold the power on the budget and the spending, and
that is the gifting council members and the mayor. Right
in my office, we provide you with the transparency and
the numbers and you know, the data, and at the
end of the day, it's going to be a well,
are people going to fight for more resources for streetlighting?
Are they going to fight for more resources for street services, meditation,
(22:31):
for the fire department, et cetera, et cetera. And so
that's what that's what it's going to take. And the
budget's going to drop next month and we're going to
tell everyone, you know, this is the proposal, right, And
so I would say people now need to start making
their voices heard, understanding how the budget works. And we
actually have a you know, we day a town home
(22:53):
with a PowerPoint slights and we could send that to
you or anyone who wants to see it. Pretty much,
we tell you how the budget works, how it's builken down,
and you can get involved. But like I said, those
sixteen people liketed officials are the people will hold the
power to the budget and how the city spent.
Speaker 2 (23:10):
I watched every budget meeting last year. I watched your
analysis of them also. I mean it's very wonky. The
meetings are very long, they are laborious, but they are important.
I certainly learned a lot about this city's governance and
people's concerns and where we might be lacking this year.
That's certainly played out. It looks like a tighter budget ahead.
Before I let you run, I know I've probably kept
you longer than I said it would, but if you
(23:31):
can stick for one more question, I mean I'm seeing
some heavy issues weighing on the city as they begin
this obviously recovery from the wildfires. Two increased attention on
the fire departments budgeting, and three, how on earth can
this city even begin to prepare for the Olympics in
(23:52):
twenty twenty eight when they've got this dire financial situation?
I mean, am I right in that thinking that those
are three pretty significant areas that will be considered?
Speaker 3 (24:01):
Yeah? I mean you mentioned those are all three very
big issues and concerns that we may not have, you know,
maybe with the exception of the Olympics. But the other
two that you mentioned didn't force see. We did force
see though, and I didn't warn everyone that there was
going to be an operating budget cut in the fire department.
(24:22):
So that's something I've been talking about even since last April.
But you know, the fires, we didn't. Who knew there
was going to be the largest natural disaster for our
city in January? Right? So all these things you mentioned,
the recovery from the fires, the department budget for the
(24:43):
fire department, and the Olympics. So there are all things
that are going to affect the city financially, and if
we want to be able to succeed and move forward
and be prepared for the next big disaster or even
the Olympics or any other big event. Then that is
going to take proper planning and proper budgeting in order
(25:05):
in order to get there. But I think it's really
important that our elected officials and the public knows what
their money is going to be spent on, so that
way they're not shocked or surprised when something happens and
then they look at that department who is responsible for it,
and they say, Okay, that department is under funded. Oh
that department actually got their budget co or they got
(25:28):
their positions eliminated. Right. So I think it's really good
going to come down to transparency and education on what
the city is doing with their money in order to
tackle not only these three issues, but any issue everything
touches money in the city. So you know, we'll be
here as a source of data and a source of
where people can go to learn about the city standards.
Speaker 2 (25:50):
Kenneth Mahia is the LA City Controller. I know you'll
be keeping an eye on the budget process. We'll be
doing that too. Hopefully we'll get to talk again as
we start to see the picture materialize more over the
coming weeks.
Speaker 3 (26:01):
Yeah, and I just want to make a plug. If
you all go to your browser and you want to
learn more about the city finances and the city's budget process,
just type in your browser dot ly forward flash Controller
town Hall seb twenty seven, and if you put all
that in lowercase, you can see a PowerPoint presentation on
(26:22):
the city's budget, the city's budget process, the finances, and
then we even do a breakdown on what happened to
the fire department budget.
Speaker 2 (26:28):
Thank you so much for taking the time with us.
We do appreciate it, all right, Mike, thanks you. And
again that was City Controller Kenneth Mahea talking to me
in a recorded interview from earlier this week. If you
missed the first part, you want to hear the whole thing,
We'll make sure that we have that on the podcast
at KFI AM sixty dot com. And I also told
(26:49):
you at the bottom of the hour we'd be talking
about the fears I have the nightmares I'm having about
these eagles and big Bear. Please stick around. We're going
to talk about these eagles. Of course, we get some
more news, some important stuff to get into, including the
fact that everybody in La County is going to be
paying a higher tax in the next few weeks. No
matter how old you are, no matter what your job is,
no matter what your property ownership status is. A tax
(27:11):
is going up and it's related to homelessness. And speaking
of homelessness, a scathing audit has come out again. Another one, yes,
another one about how poorly managed homeless funds are in
the City of La and the County of LA. We'll
talk about that, and then we have an economic forecast.
What can President Trump's policies on tariffs and deportations mean
(27:33):
to the state of California and the city of Los Angeles.
We'll talk to the director of the UCLA Anderson Forecast
about specific impacts on the Golden State. That's coming up
in the next hour right here on Michael Monks Reports
with until nine o'clock tonight on KFI AM six forty
Speaker 1 (27:48):
KFI AM six forty on demand
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