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April 10, 2012

60,000 Angelenos Can't Be Wrong

A few weeks ago I shared my concerns about worsening response times in the Los Angeles Fire Department, the impact on the safety of Angelenos, and offered a plan to address the problem.

The response from people throughout Los Angeles has been overwhelming -- more than 60,000 have viewed the information we shared. For those keeping score, that's more people than turned out on opening day to cheer on the Dodgers and their new ownership.

The response from City Hall has been less encouraging -- expressions of "surprise" and "outrage," finger-pointing and blaming others and, of course, the ritual of "audits," "hearings" and posturing for the media. Insiders have circled the wagons and assert this should not become "political," implying these issues don't deserve a public discussion.

Let's take a step back to see how Los Angeles got here. A weak economy and a hostile attitude toward employers have kept City revenues flat since 2008. The CAO currently forecasts revenues to grow 13% over the next four years (flat the last four years, up 13% the next four -- I'll take the "under" on 13% unless the City changes its approach to business) and costs to grow 20% over the same period, creating a cumulative budget deficit of almost $800 million. It should be clear to everyone in City Hall that city government has to start doing things differently, very differently.

The Fire Department provides a good case study. As far back as 2006, every elected official was asked by then-Controller Laura Chick to consider the wisdom of building a new $100 million dispatch center in the face of other looming needs for the money. It has since been shown the better choice would have been to co-locate fire and police dispatch, saving lots of money which could have been invested in boots on the ground and in technology to make the department more efficient. It costs less than $1 million to staff an ambulance crew -- how many lives might have been saved with the $100 million?

More recently, in 2009, everyone in City Council (including mayoral candidates Eric Garcetti, Wendy Greuel and Jan Perry) was warned by then-Chief Barry the plan they were proposing "will equate to longer response times to both medical emergencies and fires." The City's own data has shown this to be the case.

Yet again, in 2011, the City Council was warned the cutbacks would result in longer response times. "It was clearly stated... there will be an impact on response times," according to Chief Cummings. Unfortunately, he was right and the media has only begun to chronicle the human cost.

How could Greuel, Garcetti, Perry and the City Hall insiders now claim to be surprised? What questions did they ask in 2006, 2009, 2011 or any time along the way to follow up on this or better understand the issues? Shouldn't they be held accountable for the decisions they made?

Much of the attention thus far, deservedly so, has been on the human impact of the service cuts and the tragic consequences for families throughout Los Angeles. The broader mission of the Fire Department, however, is to "preserve life and property and foster economic growth" in Los Angeles. Yes, the same economy which provides jobs to support families and provides a tax base to pay for city services like public safety.

Last November, a fire destroyed part of a shopping center in Reseda including an auto parts store. When the business re-opened four months later they could only afford to rehire five of the 15 employees they had prior to the fire. Station 73, the closest fire station, had lost its engine company due to cutbacks and the firefighters on the scene lacked the resources to contain the blaze.

In February of this year, 600 residents were left without power in Brentwood after a fire severely damaged one house and spread to another. I am told it took 12 minutes, versus the goal of five minutes, for the firefighters to arrive at the scene.

Insurance providers look carefully at the capabilities of public safety when they set insurance rates and most rely on a company called Insurance Services Office (ISO) which evaluates the risks in any particular city. ISO "focuses on a fire department's first-alarm response and initial efforts to minimize potential loss."

The good news is Los Angeles is currently a 2 on the ISO 1-10 scale. The bad news is the classification was last set in 1987. Could Los Angeles be "downgraded?"

In 2009, Atlanta was downgraded in rating from 2 to 3 after a review by ISO, their first since 1974. Atlanta had just gone through a round of cutbacks in its fire department resources due to city budget issues. Georgia's Insurance and Fire Safety Commissioner has been outspoken on the part the downgrade has played in rising insurance costs in Atlanta.

Los Angeles can ill afford the double whammy from the loss of jobs like those in Reseda and the impact increasing insurance costs could have on employers throughout the City.

The City of Los Angeles is the second biggest in our country, providing services to almost four million residents. It employs over 47,000 people, has revenues of about $20 billion and invests $4 billion each year in capital projects ranging from roads and power plants to library books and fire trucks. Los Angeles is inextricably linked to the global economy and is America's window to Asia and Latin America, as demonstrated by the presence of 96 consuls general from around the world, second only to New York City. The City charter states that "management authority shall be vested in the Mayor who shall be the Chief Executive Officer" of this vast enterprise.

It's often said a city is not a business. While that is true, it misses the point, because a city is a very large and complex service enterprise and many of the same practices well-run businesses use can be applied to making a city work better. In business, leaders build and empower teams, find ways to get parties with opposing views to work together, make informed choices, measure progress along the way, and most importantly, get things done.

A City Council member manages a staff of 15-20 people and a budget of about $1 million; the Controller a staff of 180. As an aside, many City staffers get a free car and gas -- who made the choice to keep the cars while cutting firefighters?

Quite a step up from a staff of 20 to oversee 47,000 employees. City Hall insiders can't have it both ways -- if their experience in City Hall makes them qualified to be mayor, then they should be judged on the record of City Hall during their tenure. Not just on the Fire Department, but on what has happened to the City's roads, sidewalks, schools, traffic, homeless population, job market, finances and other issues during their long tenure in City Hall.

Los Angeles will face many challenges in the years ahead to realize its promise of becoming a great 21st century City. Our diversity, creative culture and location at the center of a changing global economy provide the opportunity. Los Angeles' next mayor will have to lead city government through an even tougher set of choices, trying to do more with less. We have seen in our fire department the results of the decisions career politicians have made. The results are not good.

I spent 30 years in business and one in City Hall. My year in City Hall taught me the City needs to do things very differently if it's going to start solving problems like those we are now facing in the Fire Department.


Austin Beutner, a businessman, is a candidate for mayor in Los Angeles.


"Applying Some Heat" Originally appeared in the Los Angeles Business Journal

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