Inglewood Mayor James Butts has penned an op-ed over criticism the city’s continues to face under his administration. Butts latest was a rebuttal on an article on how the city refinanced bonds and claimed it as “new revenue”.
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“Before Alix Ollivier (Opinion, July 15) decided to chide the city of Inglewood about our supposed fiscal management, he should have done research – or perhaps contacted us for information. Had he done so, he would not have recycled a series of common misrepresentations in his column, “SoCal are spending big instead of preparing for the next economic downturn.” So let’s set the record straight.
Ollivier wrote that Inglewood borrowed $53 million money to pay short-term bills instead of long-term obligations. That is not accurate. This was a refinancing of existing debt and a reimbursement to the general fund reserves for a prepayment of accrued unfunded liability prior to the refinancing. Here is the chronology of what Inglewood did:
On Nov. 14, 2017, the city issued a pension obligation bond refunding to legally defease certain portions of the prior 2005 pension obligation bond. By that transaction we also reimbursed the city’s general fund for advances we had made to pay CalPERS that otherwise would have been paid by our pension tax levy.
The refunding has also enabled the city to save costs – not incur them – by being able to pay the CalPERS annual unfunded liability due upfront with discounted savings accruing to the city. CalPERS was paid and the bond issue is being paid as was it was designated to be paid: by the pension tax levy. We prepaid debt. We did not add to our debt.
Ollivier also took a swipe at Inglewood over pension reform – without ever investigating what steps we already had taken – writing: “instead of shelling out excessive salaries, Inglewood needs to make pension reforms.”
Inglewood, in fact, took the lead on accomplishing the most robust unfunded liability reform of any city in Southern California, large or small. We conducted unprecedented negotiations with six unions to end lifetime retiree medical benefits, saving the city $135 million over 30 years.
Lastly, Ollivier took issue with salaries in Inglewood, but he never made the argument that the people earning those salaries had not performed exceptionally well. Yet the results of their work speak for themselves: In the past eight years, the city has lowered its crime rate to historic levels – with fewer murders this year than Torrance and other neighbors in the South Bay.
Our unemployment rate has dropped from over 17% to just over 5%. Of the 3,000 workers that are on the NFL stadium project, over 1,200 of them are Inglewood residents. Our bond rating (which was as recently as 2011 just above junk level) has been increased by both Moody’s and Standard and Poor’s to A+ and AA-, respectively. Between 2017 and 2024 we will bring $10 billion in development to the city, with projects that include the Rams, the Chargers and the Clippers as well as the new headquarters of the Girl Scouts of Greater Los Angeles, which relocated from Marina Del Rey; the relocation of the NFL Networks from Culver City; the Los Angeles Philharmonic, which is locating the Frank Gehry-designed home for its youth headquarters in our community.
Ollivier’s finger-wagging suggests that Inglewood is the passive beneficiary of others’ largesse, when in fact, this economic transformation has been brought about by the hard work of a business-oriented leadership team that gets outstanding results. The general fund reserves have increased by nearly 500% in seven years. Moody’s as long ago as 2016 rated Inglewood No. 1 in liquidity (a ratio of reserves compared to its annual spending) of all the cities they rate nationwide.
These are some of the reasons that local elected officials along with dignitaries from countries around the world frequently call and visit our city asking how we’ve accomplished what we’ve done. Ollivier turned day into night by inferring that the city by prepaying its accrued unfunded liability (thereby avoiding accruing interest charges) and refinancing its pension obligation bonds (to pay a lower interest rate) and then reimbursing the general fund reserves was somehow irresponsible. Ollivier would do better to hold us up as an example to follow. Because that would be the truth.”
James Butts is mayor of Inglewood.
