“The City of Los Angeles is undoubtedly going broke,”

warned Controller Kenneth Mejia on September 26 in social media posts on Instagram and X, formerly known as Twitter:

“In the last year, the City has spent HALF its RESERVES,”

he wrote, noting that:

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“Just ONE year ago, the Reserve Fund was historically strong, at $648 million.”

Controller Mejia cited three reasons for the impending financial crisis:

“1. Lower revenues (short $222 million)

2. Higher labor costs, starting w/ a $1 billion raise for LAPD over four years

3. Record level liability payouts.”

—LA City Controller Kenneth Mejia on X

This last Wednesday, October 2, 2024, the City Controller, who won in a landslide victory, was testifying before U.S. District Court Judge David O. Carter in another LA Alliance for Human Rights hearing for the lawsuit launched by the City’s business interests. The suit had been filed with the secret backing of real estate developer Izek Shomof, a shadowy figure also known for proposing a mega-shelter in Boyle Heights in the abandoned Sears, Roebuck & Company Mail Order Building.

The project has stalled due to community and political opposition. To assuage the concerns of the LA Alliance that the City and County hadn’t been transparent enough about its spending on homelessness, Controller Mejia’s office created a dedicated website cataloging spending as part of the legal settlement.

For the calendar year 2024, according to the Controller’s website, the City of Los Angeles, in response to the Alliance settlement concluded on June 14, 2022, under Mayor Eric Garcetti and former City Council President Nury Martinez. Along with Mayor Karen Bass’s Inside Safe program and 2020’s Freeway Agreement, which is much like the LA Alliance settlement, as the deals locked in spending by both the City and County of Angeles to meet the crisis of the unhoused. We’ll be the first to admit, as journalists, one whistleblower, and one unhoused, that the legal landscape here has become exceedingly complicated and difficult for laypersons to understand, but the dollar signs are unignorable.

City of LA’s Homeless Programs:

* Roadmap (“Freeway agreement” with LA Alliance)

* 5-year LA Alliance settlement

* Mayor Karen Bass’ Inside Safe

Between those three programs, the City of LA has spent in a year:

$138,457,260.75.

This still pales in comparison to spending on the Los Angeles Police Department (LAPD), which according to Mejia’s accounting is far and away the biggest slice in the City’s budget, as he explained last Saturday night at a fundraiser for DSA-LA Council District 14 candidate Ysabel Jurado. How much of the spending on homelessness is simply ending up in LAPD coffers is unknown. Mejia’s presentation to Judge Carter was clear, though, that the costs have been enormous. Carter, in executive-like fashion, slowed the youthful controller down to make his point, asking,

“How much money is hitting the streets?”

—Judge Carter

Carter then clarified he wasn’t the Mayor, before dismissing the officials, saying to them respectfully,

“You have a city to run.”

Seeing dental and vision items in Mejia’s accounting for one Inside Safe location, Carter was excited, and who could blame him with the City apparently finally making progress in managing its finances? The hearing, convened in the glass cube-shaped First Street Courthouse in Downtown Los Angeles, just a block away from City Hall, featured a presentation from auditors Alvarez & Marsal that suggested the City is still far away from having a full accounting of spending going back to Garcetti’s mayorship. The amount unaccounted for is potentially into the hundreds of millions and is without proper invoicing. How much of those funds may have been pilfered (and by whom) is also unknown, at least at this point, an unsatisfactory answer.

Between City Hall and the Federal Courthouse, with the old Times Mirror building in between, homeless encampments still line the street. One features a U.S. flag, synonymous with someone who has served in the U.S. military, and the man looks the part. Fencing had gone up around the awnings of the old building, abandoned since The Times fled to El Segundo under billionaire owner Patrick Soon-Shiong. Later that same afternoon, Carter would again convene an “Injunctive Relief” hearing for the West LA Veterans Affairs “campus”, more correctly known as the National Soldiers’ Home for Disabled Volunteer Soldiers.

The two judicial affairs, separate but in some ways related, have in some ways become spectacle with the colorful veteran jurist, himself a U.S. Marine with combat service in Vietnam, one day declaring to the audience,

“Do you know why Marines believe in God? They believe in God because they’re afraid of dying.”

One observer described the judge as a “quote machine.”

Carter would repeatedly show a picture of a U.S. Agency for International Development camp in the Republic of Georgia, explaining that he helped build it for refugees spilling over from South Ossetia and wondering why the same couldn’t be done in Los Angeles. Judge Carter was serious; he wanted results, and he wanted them sooner rather than later.

Jurado’s rival, current District 14 Councilmember Kevin de León, had made a grave mistake, perhaps even worse than the University of California, Los Angeles, which would see its Jackie Robinson Stadium closed by Department of Veteran’s Affairs security on Judges’ orders. UCLA, as of October 3, has yet to make a proposal for what was described in the Judges’ opinion as an “exit strategy,” with the goal being to ensure adequate housing for veterans will be constructed on land that is rightfully theirs.

Whereas UCLA had simply failed to come to the table, De León had rather come to Court with ulterior motive. Carrying over a “spat,” as Judge Carter called it, from his first debate with Jurado, not with his opponent, but rather from social media with LA County Supervisor Hilda Solis over the County’s progress on homelessness. Unlike Brentwood School, which at least seems to be trying to negotiate a resolution to preserve some usage of their facilities built on the Veteran’s land, De León didn’t take the hint. Even after being scolded, he continued to campaign openly in the courtroom despite the judge’s admonishment to be on-point.

In reference to the Co-ordinated Entry System (CES), which promises to do exactly what A&M’s auditors flagged as most problematic, the coordination of housing, care and services for the unhoused, De León instead resorted to finger-pointing. Writing to the Judge night prior:

“This is not merely a failure of system design but of moral judgment, compelling us to question the County's commitment to equitable service delivery.”

De Leon’s argument was just divisive.

If other elected officials, such as new Council President Marqueece Harris-Dawson, Councilwoman Nithya Raman, Controller Kenneth Mejia, and County Supervisor and LAHSA Commissioner Lindsey Horvath, were there in good faith trying to solve the problem together. The LA Alliance previously successfully argued that the City and County were acting in “bad faith.” De León stood out like an unruly politician even as he told the story of how his staff had helped “Miguel,” who was unsheltered in Eagle Rock. Undoubtedly, Los Angeles County is not meeting its goals on homelessness, with an officially counted 75,312 people on the streets, of whom 2,991 are veterans, a significant 23% decrease from the preceding year. How that goal is met, though, will require more competence and cooperation, not grandstanding in what some have called:

“ The Nation’s Capital for Veteran Homelessness”.

Also present, lawyers for oil company Bridgeland Energy had already announced plans to appeal Carter’s ruling, so even as some have alleged that Carter is failing, he can be seen fervently seeking to negotiate temporary and permanent housing for veterans. At one point, Carter even yelled across the courtroom at VA officials that he wanted veterans off the streets before the “winter rains.” Carter chided Plaintiff’s expert witness Steven Soboroff to get to work figuring out how to get the upscaled housing goals for the campus* met quickly. At the end of Wednesday’s hearing, the third such day across two weeks beginning on September 25, Carter summoned fellow Plaintiff’s expert witness, developer Randy Johnson, and Soboroff back to his chambers for further discussion on how to get things moving.

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“A Failure of Moral Judgment” – Judge Carter & the Crisis of the Unhoused

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