sewer bond debt alone could lead to a tripling of sewer fees by 1993.
While the City budget is and would be in nominal balance even with additional debt obligation, the fiscal
health of the City may be less than optimal. A proposal before the Governmental Accounting Standards Board
(GASB), endorsed by the Government Finance Officers Association, would require local governments to
“subtract all unpaid liabilities from the current fiscal year's operating revenue.”This would bring local
government accounting more into conformance with generally accepted accounting principles as applied in the
private sector. If the proposal is adopted by the GASB (a vote is scheduled before the end of 1988), the City of
Los Angeles could suffer a $375 million budget deficit, the Wall Street Journal reports (see WSJ, June 15, 1988).
The County does and may continue to experience budget problems, even though, as noted above, it has
made some commendable efforts to employ ASD/privatization toreduce costs of some public works and
support services (including a seven-year, $80 million contract for fleet maintenance and management with
expected annual savings of $2 million). Unanticipated provisions in the state budget and less-than-expected
revenue from local property taxes led the County's Chief Administrative Officer (CAO) to propose, early in the
fiscal-year 1988-89, significant across-the-board service cuts amounting to perhaps as much as $35 million to
$40 million. These cuts may affect basic services such as law enforcement, fire protection, and the courts.
Cost Comparisons in Los Angeles City and County
Figure 1 summarizes the results of that portion of the analysis that compares the cost of four
comparable services provided by the City (which uses public forces to deliver these services) and the County
(which uses private [contract] forces for a significant portion of the delivery of these services).
As indicated in Figure 1, the City's publicly supplied services are significantly more costly on two
separate measures of unit cost for residential refuse collection (e.g., 147 percent higher cost/unit served), asphalt
resurfacing (e.g., 106 percent higher cost/mile), and street sweeping (e.g., 56 percent higher cost/curb mile). The
City's public forces are also more expensive than the County's private suppliers for building security (65
percent higher per guard post).
Figure 1 also shows that even if one considers only the City's own total program or activity costs, which
do not include some overhead and opportunity costs, the City's publicly supplied services are still significantly
more costly on four of seven measurement units (see lower-shaded portion of first bars in each graph).
