2013 L.A. Economic Forecast Summary: Hon. Mr. Don Knabe

The following is a summary of the presentation by Supervisor of Los Angeles County- 4th District- the Honorable Mr. Don Knabe from the Los Angeles Economic & Business Forecast for 2013

, which took place Thursday, February 21, 2013 at Metropolitan Water District Headquarters in Los Angeles, CA, and was sponsored by Metropolitan Water District of Southern California and the Latin Business Association:

Communications Office

Remarks for


EVENT: Los Angeles Economic and Business Forecast for 2013
DA: February 21, 2013

It is a pleasure to be here today! I’d like to tell you a little bit about what is going on at the County and then get into how we are trying to support small business in the region.


  • Let’s talk money first! At the national level, you are hearing a lot about the budget, looming sequestration cuts and a whole lot of partisan bickering about how we should raise and spend money.
  • At the federal level, this has been going on for a long time … because it can! The Senate hasn’t proposed a budget in nearly 4 years! All of you know you can’t responsibly run a business like that – and nor can you run a government like that.
  • You don’t read about Fiscal Cliffs at the County. You see, we have to balance our budget every year.
  • Back in the good old days, we put money away. We didn’t go on a spending spree. We were prudent and responsible.
  • Thanks to the commitment of our department heads and the relationships we have with our unions – over 60 bargaining units! – we have had no lay-offs and no furloughs, thanks to our partnership with labor. Everyone realizes that we are all on the same team, serving as the ultimate safety net for people who need us most.
  • The County’s track record of fiscal discipline has not gone unnoticed. Last October, Standard & Poor’s raised the County’s long-term credit rating from AA- to AA.
  • This is virtually unheard of – a government credit rating GOING UP! In fact, the AA rating is the highest S&P has ever assigned to the County. We were also the largest municipality to have its rating upgraded in 2012.
  • I cannot overstate the importance of our solid financial position. You see evidence of it every day.
  • In some cities, they can’t even fill the potholes and pave the streets. At the County, we continue to invest in our infrastructure, knowing that investments today will pay off tomorrow.
  • Those investments extend to our support of small, local businesses. As we all know, a strong, local government is essential in creating an environment for businesses to thrive.
  • Business Friendly Environment

  • 65% of business in Los Angeles is small business. That is ground-zero for job creation and where most hiring now occurs. Some of the environment at the state level (taxes and regulation, for example) don’t help our cause in supporting the development and retention of small business. But at the County, we are behind you. Let me tell you about some recent activities:
      • Bid preference: On my motion, local small businesses are eligible for an 8% bid price reduction – or preference – during the evaluation process when bidding for goods and services for work with the County. This boost will help small vendors who want to do business with the County and we’re going to see them get more contracts. It also encourages them to hire more employees.
      • Prompt Payment: I get what a struggle cash flow can be for small businesses. And I also know that huge organizations like the County might not have the fastest payment processes in town. So, we created a Prompt Payment Program for local small businesses so that we pay our invoices within 15 days.
      • Last month, Supervisor Mark Ridley-Thomas and I partnered on a motion that, among other measures, did a couple of key things: #1 – looks at establishing a targeted amount of the County’s contracts and purchasing dollars to be awarded to small businesses. #2 – establishes a Disabled Veterans Business Enterprise Preference Program. We’ll hear back in the next couple months on how these initiatives will move forward.
      Clean Water Initiative

  • I’ve told you what we are doing to support small business, but even I must admit that we don’t always get it right. Sometimes, in fact, we get really stupid – like now, when we are trying to tax the rain!
      • Last December, during the busiest mail season of the year, parcel owners across Los Angeles County received a notification from our Public Works Department regarding a “Clean Water, Clean Beaches” measure. Unfortunately, it looked like junk mail, so many people threw it out. (show example)
      • The flier talked about the Los Angeles County Flood Control District’s proposal to adopt a Clean Water, Clean Beaches Measure, which would establish an annual fee to pay for clean water programs.
      • That thing many of you received in the mail was, in fact, a protest ballot for a new parcel fee. The way the process works is we would need over half of the parcel owners to protest (over 1 million!) or the initiative would move forward to an election.

      • Let me be clear – I want clean water and I think most people do. But this thing was such a mess – my office received so many complaints from the public who do not understand the fee and questioned the credibility of the process.

      • So, in the spirit of David Letterman, let me give you Don Knabe’s Top 10 Reasons I think this initiative sucks:

      • #10: This is the largest parcel fee the County has ever undertaken. We need the process to be convenient, transparent and open so that stakeholders will have their voices heard. Unfortunately, it’s been the opposite of that.

      • #9: The way the distribution was handled was such a mess that some huge organizations – like Metro – never even received notices.

      • #8: People have a right to know how their money is being spent – we need a specific project list so you know where your money is going.

      • #7: In the beginning, there was no email or online protest ability. Come on: it’s 2013!

      • #6: Many property owners and businesses are already required to do the things the parcel fee is meant to achieve – this will be a double tax for them. That’s simply not fair.

      • #5: Only property owners received the mailing, yet it would impact everyone – school children, churchmembers, renters, small business owners – through program cuts or higher costs.
      • #4: Look who has to pay: Voters just passed Prop 30 to support our schools. If this fee is passed, school districts could have to pay $14 million annually, which means that funds meant to go in the classroom will go to pay this fee instead. Churches and non-profit organizations which are already struggling in this tough economy would also have to divert funds from their programs to pay this fee.
      • And get this: we’re charging open space! The national forests, state parks, and organizations like the Santa Monica Mountains Conservancy and the Puente Hills Habitat Authority, will all have to pay. Come on! Open space is part of the solution to pollution, but we’re penalizing them as if they’re part of the problem.
      • #3: Look at the fees they are paying! –

      Description Annual Fee ($)
      LAUSD $4.7 million
      City of Los Angeles $7.2 million
      Archdiocese of LA $820,000
      Boys and Girls Club $21,000

      • #2: If this moves forward, the election method could be a mail-in ballot, which would only require 50% + 1 approval of the mail-in ballots turned in to pass. A normal ballot measure during an election would require 2/3 for approval. I’m concerned it was set up like this because it was an easier way to get it passed.

      • #1: It never ends! This is a forever tax – no sunset date.

      • There is your Top Ten! I raised these concerns last month and the Department of Public Works is scheduled to report back on March 12th. In the meantime, they have finally provided an email protest capability – it is 2013!

    Property owners who have not already submitted a protest form can now do so. You can go to knabe.com for more information on how to do it.

    That’s just a small sampling of what is happening at the County level. I want to thank you for doing business in LA County and I appreciate being invited to speak to you today.

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