Part of a common site for Neighborhood Councils and Homeowners groups of the San Fernando Valley and information concerning the Valley issues Information about the November 5, 2002 election

Rightsizing Local & Regional Government Methods & Models for Representative Local Governance:
A Compendium

Produced by: Reason Foundation/Public Policy Institute, James Irvine Foundation, Valley Civic Foundation, Economic Alliance of the San Fernando Valley and CivicCenter Group

Index

To the morning section

Remarks by Jeremy Smith, Director, Local Government International Bureau, London, & Former Chief Executive London Borough Of Camden 

Questions of Jeremy Smith

Remarks by Joel Kotkin, Research Fellow In Urban Studies, Reason Public Policy Institute, Amd Senior Fellow - Davenport Institute For Public Policy, Pepperdine University 

Remarks by Robert Nelson, Professor, School Of Public Affairs, University Of Maryland, And Senior Fellow, Competitive Enterprise Institute 
Remarks by Douglas P. Munro, President Intergroup Services, Baltimore 

Appearances: Economic Alliance: Bruce Ackerman, President 

David W. Fleming, Chairman 

Robert L. Scott, Executive Vice Chair Speakers: 

Lynn Scarlett, President Reason Foundation 

Sam Staley, Director Urban Futures Program Reason Public Policy Institute 

Ronald J. Oakerson, Dean/Professor Of Political Science, Houghton College 

Robert Poole, Director Of Transportation Studies, Reason Public Policy Institute 

Andrew Sancton, Chair Department Of Political Science University Of Western Ontario 

Milan Dluhy, Chair, Department Of Political Science-Public Administration, University Of North Carolina, Wilmington 

James Nolan, Transportation Chair Department Of Agricultural Economics, University Of Saskatchewan 

Edward A. Schwartz, President Institute For The Study Of Civic Values 

Shirley Svorny, Professor Of Economics, California State University, Northridge 

Sam Olivito, Executive Director California Contract Cities Assoc.

Nicholas T. Conway, Executive Director, San Gabriel Valley Council Of Governments

  Mr. Staley: at first It seemed a little odd that we're here talking about local government In the united states and we're talking about such things as economies of scale In government -- to have someone from as far away as London, that has a completely different system, to talk to us about local government.

I wish I could say that It was my Idea first, but It really wasn't. When I heard It, I thought It was a great Idea.

and the reason, from a personal note, Is this, about ten years ago I had the opportunity -- most of my work has been doing local government In the united states, planning, economic development. And through various circumstances I had an opportunity to do some work In Hong Kong and to look at land use planning and Its effect on urban development, a very different system than I find In the united states.

and what I found In doing my research and working with the folks In Hong Kong was not only was the system very different, but It gave me a completely different way of looking at the same problems In the united states. Literally, It Is one of two things, two events In my life, my professional life where an experience has completely changed the way I look at public policy. It has completely framed the way I look at some of these problems.

And again my focus has always being nuts and bolts, how do we actually get things done. And If you had asked me before I had been to Hong Kong, I would have said "what would Hong Kong have to teach me about local government?" What It does Is It just gets us outside the box. And I think that Is one of the great things about having someone such as Jeremy smith come In Is that they don't have all the biases that we bring to local government, and they really get us to look at things In a different way and a fresh way.

And the London borough system In particular, as I have gotten to know more about It In the last couple of weeks, I think really Is the kind of model we want to look at, not that we are going to Import the Ideas, but to really get us to think differently about cities, how they deliver services In the different context In which that can happen. To index

Jeremy Smith Is Ideally suited to do this because he actually was the chief executive of a borough In the city of London, so he was Involved In the day-to-day operation of the city In a system that Is very different from the one we are In here. And I'll let Jeremy talk about that.

But also, as director of the local government International bureau, he has been an advocate for the united kingdom local government that Is part of the European union, and so he has a breadth of knowledge of local government beyond just the UK, but also elsewhere so he can bring some of that perspective.

So with no further ado, let me let Jeremy take over the stage and tell us about local government.

Mr. Smith: thank you very much, Indeed, Sam. And first to express my thanks at the Invitation to come and speak to you.

When I was quite young, one of my first records or disks, 78, was "last train to San Fernando ." I'm not quite sure whether It's the same San Fernando or not, but certainly I always Identified It as being here In California. So In this kind of mental thing I always had an Idea that one day I would go to San Fernando . So I am really delighted.

Secondly, we are actually quite grateful to Californians for many things, for parts of your entertainment Industry, not for other parts, but there are a lot of feel-good factor that you bring to us In Britain and In Europe. And amongst that entertainment, you know, we have had a pretty rough time. We have had our railway system collapse, life has been pretty miserable. And then we hear about your power crisis, and we all felt one heluva lot better.

One of my cospeakers -- I won't say which one -- said give them a George bush joke. I said no, I can't, totally undiplomatic and wrong to do It, so I won't.

But we are very Interested In Europe and Britain to hear how things will develop. We have not always found It absolutely clear to understand the precise meaning of every word, but then there Is an old saying that we are two countries divided by a common language.

There was one thing about George, actually, that really confused us for quite a long time, and that was why he had this Russian name. "George," then there was this "dubya" that came out of Tolstoy of "war and peace" or something. Was there some connection? When his father was In office, did he take him along to see Mr. Gorbachev and have his hands laid on him or something? But then we thought, no, George junior was a bit older than that. It took us a long time to understand what this "dubya" really stood for.

Anyway, on to rightsizing local government. It Is really a current topic of major Interest, not In the precise way that you are looking at It here In L.A. and San Fernando , but that Issue of what tasks should be performed by which part of government Is an absolutely universal Issue at the moment and then especially for us In Europe.

It obviously relates to the precise geography of each municipality, each region. There are lots of things going on In many countries, what comprises a region and what area It should be. But It also covers, of course, the tasks or competences of each level or sphere of government. And of course within that Is a further question: which tasks and competences are best delivered by local government and at which level? How much are best delivered by others, by the private sector, or, as has been mentioned, by some of the community societal organizations? we have a sort of European concept which Is actually built Into the wording In the treatise setting up European union which Is a principle of subsidiarity which In essence we take to mean that services should be delivered by the level or sphere of government closest to the people as appropriate for that service.

In a sense, that begs the question which Is best to be done by local government. But It Implies a very strong a prior view that more services should be delivered close to the citizen or as close to the citizen as possible.

I think that that Is part of our general perspective that globalization does two things. One, It makes cities, and I am going to dare use the word "regions," compete In the global economy, bring with It Investment for tourism.

We are competing with each other, but also sharing knowledge, sharing experiences, learning from each other. But at the same time, because of this feeling that things are being taken away Into this International range where economies relate, even city economies relate Internationally, that citizens can feel more and more distant from the process.

So again It comes back, even within the globalization process, the need for a close connection between citizens and their local governments.

You have kindly Invited me here to try and explain a little about the London experience. I should say that certainly there Is a great Interest In American experience, although It's really diverse because of the states having different systems, and our own government has shown a 7 great Interest In the American as well as the European experience In particular In looking at Introducing forms of stronger mayors which may not be the direction all of you want to go In, but It Is the direction that Is being looked at, as I will explain shortly.

They also looked at European cities like Barcelona which have been very much In the line of cities trying to place themselves on the map In terms of world economy and which have proved very successful.

So we look as a person who has always towards the united states, towards Europe. That Is part of the reason why we find It difficult to jump decisively In relation to the European union Issues.

But of course, as has been said In the Introduction, there Is no model that Is absolutely right to be transported from one country to another, but It Is very useful, I find always, to learn how others do It so you can reflect, as I said, but certainly I have absolutely the clearest view that there Is a difference In history and culture from London to L.A. that means whatever the merits, one could not simply Import the system.

However, I do believe this Is a general Issue, the Issue of how large cities are governed and how far they can decentralize, Is an Important one to consider. London and Los Angeles and San Fernando , two major world cities, both cosmopolitan, both with fast changing economies, and both -- I think this Is one of the critical things -- covering a large land mass.

London actually covers a larger land mass than Los Angeles as It Is today. It Is nearly 700 square miles, greater London. We have a population of about 7.2 million people today. It's Interesting just to note because part of the reason why you can't just copy things Is history always comes through.

In 1890 Los Angeles, I read, had a population -- this Is the city, not county -- of about 50,000, I think. And London at that time had a population In Inner London of 4.2 million.

In 1930 Los Angeles was 2.2 million and London was still around 4.4 million. So you have had a sort of growth curve which Is very different from London's position, and It leads to different conclusions.

Interestingly, as I will go In a minute, London has been reorganized many times. I was quite surprised to hear that really no substantial changes In government or governance of the city have taken place over a long period. I am not saying It should be have been, but It's still surprising.

but like all cities, though, It's a question there Is no -- or there Is usually no single way of defining a city. And London Is certainly -- that Is true of London. You can consider what Is London In four ways.

But one I am going to just say It and then put aside because It's London and It's southeast England catchment area, which Is probably too big an area, though It has an economic reality to It, Including many dormitory towns, but It Is certainly not an administrative unit In any sense and Is treated differently In regional development terms.

We then have greater London, which Is the current boundaries of London In administrative terms and actually has been so since -- almost Identical boundaries since 1829 when the metropolitan police was first formed. We still today use boundaries from roughly 1829, which are not bad boundaries for greater London, but they certainly have a history.

There Is then an Inner London which no longer means anything, but did In history, which Is the built-up area In the mid 19th century.

And lastly, and very Importantly, we still have another London, which Is the city of London, which Is the financial center, the one-square-mile which retains to this day Its own separate government, Its governance, Its own police force, and remains outside the rest of the city government. It relates quite closely to It and plays generally a cooperative role, but has managed through the force of Its history and Its financial clout to remain an Independent part of the polity.

I thought I would do a sort of three-minute run through the history just to see how we got to where we are.

There used to be a little comic theater group named the national theater of Brent, I think they were called, who could do the complete works of Shakespeare In 45 minutes, I think It was.

In essence, we had the old city, which Is  today's financial center, which was then -- had a population and which was the original London. And the king lived next door In another city, Westminster. So the old city was very, very small, Indeed. The other parts of London were villages and then became suburbs, and there was obviously some linking up In terms of development.

We had virtually no local government until the 89th century. London was In many ways a very exciting city, a dynamic one, obviously In some respects a prosperous one.

Actually It was quite a lethal one because things like cholera and other killers, due to having no local government, meant that rich and poor alike, more the poor than rich, that tended to die of diseases. It was a pretty unsafe city.

In 1829, as I Indicated, a police force was set up using very expanded boundaries that are today greater London. It was only In 1855, already with population of 2.8 million, that the first form of local government called the metropolitan board of works was established, and that had mainly Infrastructure as Its function.

The first slightly wider form of local government was In 1888 when the London county council was formed using the Inner London boundaries, which are 13 of today's boroughs. That had a population, as I Indicated earlier, of just over four million people at that time. In fact, In later years the population of that Inner part of London declined further to about two or two and a half million.

And In 1899, so we are still In history, there was a set of metropolitan boroughs which are not the same as the ones today, In fact they were smaller ones; they covered a smaller area. They are probably not a smaller population because of the density of population In the Inner city at that time, and though their powers were relatively modest.

It was really In 1963 that anything approaching the modern form of local government In London was set up because following the royal commission to look Into how London should be governed, they set up of a sort of a regional government, the greater London council, covering the whole of greater London and the 32 boroughs which are today's borough councils, which Sam has referred to. That came In -- that new system came Into being In 1965.

Under that system the greater London council had an uneasy mix of what I think might be called regional and strategic functions and some hands-on operational ones. For example, It still had quite a lot of the housing stock of the old London county council. It still ran a fast service, and It ran the education service for primary, secondary, and adult education In Inner London, but not outer London.

Wwhat happened to create the boroughs was actually they merged some of the older boroughs In Inner London, the small ones, to create the current ones.

So the London borough of Camden at the time was the city manager or chief executive for over six years and was made out of three old boroughs, Hampstead, St. Pancras, and Holborn which were -- still had, even many years later, a lot of people feeling a sense of Identity, an attachment to those smaller areas. One of the Interesting questions could be whether those Identities are still strong enough to merit any further decentralization.

The GLC, the greater London council, had major planning powers. They produced the greater London development plan, which was Infamous because It proposed to put a major freeway, or motorway system, as we call It, four-lane or six-lane highways, through a lot of London where there was existing housing. This caused enormous opposition and was eventually rejected.

So even In Its strategic functions It was not always popular. However, In 1986 the greater London council was abolished, and a part of It which did survive providing education In Inner London was also abolished In 1990. And that meant that from then on, the boroughs, the 32 boroughs, took on more powers.

And I will just run through the sort of portfolio of services. Before I do so, I think It Is Important to note the British context with Its many services, such as water, electricity, gas, and so on were privatized, having been nationalized earlier, were later privatized so that local government, In fact since the late 1940s, has not been Involved In those services.

So the main services that are provided by the boroughs are these: education, which they took on In 1990, and that actually added about 50 percent to the budgets. That Is primary and secondary education, not further and higher education. A wide range of social services, housing, or 3 social housing, that Is to say, planning. The local authorities In London do their own unitary development plans within the framework of strategic guidance given by the minister and, from now on, through the new greater London authority.

They deliver local economic development and regeneration programs. They deliver a fairly wide range of environmental services: waste collection; recycling; waste disposal, which Is done on a joint borough basis; environmental health; and a variety of regulatory powers.

Some transport and highways, not the major national ones, but all the local roads, about 95 percent of them, Including parking, patrol, and all those sorts of services. And a range of leisure and Information services, ordinary leisure services, recreation, library, welfare, advice services, and a range of others.

Of these, the education and social services are by far the most costly, social services being actually quite a wide range portfolio of services for those with special needs.

I thought at this point that I would just say a bit to give a bit more life to this about the borough I was Involved with, Camden, and the sort of Issues we had to deal with.

Camden Is part of Inner London. It Is fairly long and thin In shape, and It Is north of the river, and It touches onto the city, but then goes up north to part of London called Hampstead heath, which Is a big green area with 4 a lot of very, actually quite rich residential area.

It Is a very diverse borough, Indeed. It has today about 193,000 people living In It, which Is actually an Increase In the last few years since I was there, which Is quite an Interesting thing that people started to come back Into central London on a larger scale.

It has the some of the poorest and some of the richest wards. A ward Is an electoral district, roughly 8,000 population. On a national basis, It has some of the richest and some of the poorest contained within It, almost next door to each other. So It Is very diverse and very side-by-side diverse.

It Is also a large part of London's economy. there are some 21,000 businesses employing 224,000 people. So It has more people employed In It than It has living In It by a considerable margin.

Most of these are business and professional services and financial services. It has a modest residue of manufacturing left over. But, like here and elsewhere, the manufacturing Industry has, of course, largely disappeared.

It Is full of leisure places, artistic places. It has the British museum, for those of you who know London, In the south part of the borough.

And Its population Is about 20 percent nonwhite, but there Is estimated to be more than a hundred different languages spoken In Camden schools. So while It's not a huge nonwhite population, It's very, very diverse.

People come from all over the world, from many, many different 5 countries. So we have no single large ethnic minority community, but those from Bangladesh Is probably the largest one. It Is a number from all over the world which creates an Interesting diverse population to work with.

What did we have to do In those days? In fact, because there has been a change In financing system, Camden, which changed over from a property rate which was on people's houses but also on businesses, that business rate was nationalized just before I became chief executive. That meant the funds available to this authority, which was traditionally a high spending authority, were reduced. That meant we had several years of very, very tough budgets In order to get back Into a new shape.

And each year we used to take out about 10 percent of our budget. The staff I Inherited when I went there I think were 12,000, Including teaching staff, and this came down to about under 9,000, I think, by the time I left.

That was done In two ways, first by the privatization of contracting out of services, and secondly by reducing staff delivering the raft of services. I think It's -- when I talk to European colleagues, they are absolutely amazed and/or appalled at the scale of that over a small number of years.

My view Is that we were able to Improve our administration and that we did make some real reductions In service level. Those reductions were certainly far less than the percentages by which the costs In the work force were reduced. we also had major labor relations Issues at the start. It was a heavily unionized work place and used to quite a few disputes.

We had one major one when our social workers walked out, which changed the whole climate. They stayed out on strike for a year. And we advised from the start, you either give In at the start, or you will you see It through to the end, and our councilors decided to see It through to the end, which they did. And although It's not a huge number of staff, It totally changed the climate of labor relations because on that occasion the management did win that particular dispute.

It was an Important -- It's remained reasonably unionized place, but not In the same way as I have heard some Issues today. the other big Issue we faced was regeneration.

At that time the economy was not doing brilliantly. The unemployment rate to date Is about seven percent, which was about 13 percent at that time, and needed a lot of work.

There are national programs for regeneration from national government which you have to do In partnership with them. And one of the big ones was around the king's cross area, which Is the station area which Is due In due course to bring In the chunnel tunnel rail-link which goes under the English channel to France. So It's the Paris-London link-up, goes Into south London, It's due to come In.

There Is a huge area, very poor area and full of major problems of drug dealing and other things. So It was an Integrated regeneration program which we have put together and got the money the last few days I was there. We finally got the money for that.

So that Is just a few of the Issues that a London chief executive deals with.

I mentioned the finance system because It Is very different. We had much less control over finance, and still do, than I think American local governments do.

Before 1990 we had a system, as I said, of property rates, and that brought In about half of local government's money, so they had quite a lot of control over It, and the rest was through government grant.

But, In that year, there was a change over to the Ill-fated pole tax system which tried to levy the same amount of money from all citizens and proved administratively Impossible.

We had an area of a large number of students and so on. They were always moving about so you could never keep up with where they were. There was a huge organized non-payment. It was a totally chaotic system. They were much better at escaping. I think businesses tend to have a kind of fiscal base that you can get on with, students running and running around the borough. It was a nightmare.

Eventually the system was changed a few years later to what Is now called council tax, which Is actually a property tax on domestic dwellings which Is graded according to the value of the dwelling. I don't think we have had revaluation so one always gets to those problems of when are you going to revalue.

But essentially there are eight gradations, so you can -- depending on how your property was valued a few years ago. And this at last provides a relatively stable form of Income.

The downside Is that It only provides today about 25 percent of our Income. The rest comes through this nationalized business rate system. So the rate of our tax Is set by national government, no longer by local government, and the rest Is In the form of a revenue support grant out of central taxation, Income tax, et cetera, which Is across the whole country, not just In London, Is distributed according to a formula which purports to assess the amount that each authority would need to spend at a standard level.

The assessment of this system of having boroughs only, I think the positive side was that there was less confusion as to who does what In local government.

There was no differences between two levels. Services more locally delivered were on average better delivered. I say on average because there were many cases where they were not.

The taking on of education was largely a success. Not true In two of the boroughs where there has been major problems In education, but In most of them was a success.

The system was probably cheaper, but that was partly because of the way the central government or national government put a limit on the amount of taxes that could be spent -- sorry -- on the budget that could be levied.

The system of compulsory competitive tendering which Is privatization led to more cost effective services, though It also had some disadvantages, not at first when It dealt with some of the services such as street cleaning and so on, but when It started to get Into the Issues of finance staff, "it" staff, so on, when It caused more difficulty for the authorities. Certainly It Is now some of the services which before were normally provided In-house are now almost as a matter of course delivered out-house, such as waste collection.

The less positive side, some services provided by the greater London council went out to the elected local government to bodies that were appointed by government. The particular one was London regional transport which deals with the metro system and buses.

The other disadvantage was the lack of a strategic approach to London. I mentioned transport but also some major planning Issues.

The king's cross regeneration that I referred to was on the border between two local authorities which, a, caused a problem there; and, secondly, local people had no Interest In voting for a major development that could have negatively Impact on them, but which might be for the benefit of London as a whole; and, thirdly, tied to the financing here, there was no specific Incentive to attract business to a borough because you didn't gain any financial benefit from attracting business to your borough. So again, local people who didn't want business In the area could put pressure on.

In general, there was some moving of power actually towards national government, not just decentralized.

Finally, we have today a new greater London authority which Is strictly, I remind you, a regional body.

It was set up following a referendum, and Its services have not taken powers away from the boroughs. They have largely been powers the national government was exercising before. It provides a strong mayor system. The mayor does -- has most of the decisions together with an authority of 25 members.

The main functions are transport where they have appointed bob kylie from New York's transport system as the head of transport for London; economic development with a duty through a development agency to promote competitiveness and employment; part control of metropolitan police, which has always been run by national government and never by local government, which Is a big difference from the American system; fire, which Is run on a pan London basis, and they have a duty to produce a spatial development strategy, a planning strategy for London, also some strategies In relation to the environment. They are very much about producing strategies, not about operational services, other than In the field In particular of transport through -- transport for London.

Final the Issues that we need to look at In my view In any city are the balance between Identity and efficiency.

In France we still have, as you do In many American towns, very small towns that have their own self-government. However, In some French cities like Paris, It's a very central system. Paris has very little decentralized government at all. These are matters of choice for Individual cities.

But In my view, local government essentially needs to respond to people's own sense of what their Identity Is. Of course, In a modern age Identity shows people work In one place, live In another, and so on.

I believe that the wider role for local government Into the future Is not just or not so much In service delivery, but In the wider role of community leadership.

We need to join up government In terms -- In order to deal with the big Issues that face us, be they crime and community safety, environment, and all the other Issues.

This requires local government to work In partnership with certainly with the other spheres of government, with the state, with the region, If there Is one, but certainly also, as has been mentioned today, with all the other players In the locality from the private sector, from the public sector where It exists, and certainly with our community associations, and also to be the overseer of those services and be the voice on behalf of the community of those services provided by others.

So, In short, I believe that we need a wider sense of local government as being looking at promoting the well being of the community, which Is to be separated from service delivery function.

So those are my thoughts on the London borough system, which Is very different.

I hope those comparative Ideas will help you In your approach. thank you. To index

Questions for Jeremy Smith

Mr. Staley: I ask Jeremy to stay up at the podium so we can have a small attempt at questions before we go on to the next panel. we are going along the same form as before, I think.

Mr. Fleming: one question, Jeremy: you are saying your borough Is about 190,000. Is that about the average size of a borough?

Mr. Smith: It Is a tiny bit under the average size. They range from about, just about 120,000 up to 275,000 or something like that. So It's middle of the range, but a little below norm.

Mr. Fleming: so for those services that you enumerated that In a regular borough, people would come to one local city hall or borough hall or whatever In the borough to avail themselves of that service? 

Mr. Smith: certainly not. We tended to have for many services three sort of entry points In different parts of the borough, and It depends on the nature of the service. Obviously, some are libraries that are scattered all around 3 the borough, but quite a lot of It was Increasingly done through the town hall, partly to make savings on costs as well. So It was a balance between how far you provided administrative outposts and how far you wanted to reduce the costs and Indeed get the Income from selling off properties.

Mr. Fleming: do you have an elected borough board?

Mr. Smith: certainly do. sorry. I should have gone over this. This Is very different Indeed. we have a system of elected councilors elected on a board of roughly 8,000 people. And there were0 of them for the area, 59 to be exact. And they get elected usually on a party ticket. And the council very much sets the meet regularly and through the elected councilors does have a big say In setting the agenda. It Is certainly not the kind of city manager or officer, that agenda, In many ways. so the system has within that sort of area, that sort of population, people who sit, as their job, to represent specific parts of the area.

Mr. Stewart: how do the Individual boroughs Influence the greater living authority, and Is that a formal or Informal system?

Mr. Smith: It's a very new system because the greater London authority has been less than a year up and running. They are trying to get a sort of concord out of how to work together. As I say, for the most part, powers have not been taken away from the boroughs, but their powers can be Influenced by the mayor and the assembly. So there Is an organization that unites the boroughs called the association of London government. It Is through that body that they then meet the mayor and the assembly to discuss matters of mutual Interest.

Mr. Scott: again, I have a written question here: the services that the boroughs began to provide, were any of those new services, or were they all devolved from the larger London government? 

Mr. Smith: the services they had were actually set out In law from the outset and been amended, changed, added to, subtracted from, over the years. So they are all -- only some of them were actually -- when the citywide government was abolished In 986, some governments were, some functions were devolved, but most of them are original functions. Aand the changes In the last -- a major change In the last year has been to give all local authorities a general power to do anything that they consider to be for the -- promotes the wellbeing, the economic, social, and environmental wellbeing for their area, which gives more flexibility than being precisely defined by the services, by the statutory services.

Mr. Fleming: Jeremy, can you talk a little bit more about how the borough Is managed and how many employees a borough has, your borough?

Mr. Smith: as I said, when I started, It was ,000, Including the educational staff, or actually appointed by the schools directly for the most part, and It came down to 4,000. I think It's probably a little below that today.

Mr. Fleming: how many of those were In education and how many 

Mr. Smith: certainly a significant proportion. I think probably about 3,000 of that was In education.

Mr. Scott: you have about 60 elected council members In your borough. If that was typical, does that mean that 32 boroughs at about 1900 elected council members compared to 15 for Los Angeles? 

Mr. Smith: yes.

Mr. Scott: how would that sell In Los Angeles? 

Mr. Smith: I don't know If this Is seen as a good thing to have more elected representatives or as a bad thing. I would be Interested to know how the view Is.

Mr. Scott: are they full-time or part-time?

Mr. Smith: they are a mixture. It Is their choice. Part of the new government's system Is to require all councils to have a newborn political management which Includes the option of a directly elected mayor. This Is very much going on the American and, to some extent, the European experience.

If they go for an elected mayor, and most of them don't want to, then there will be a salary attached to that and we will get more full-time people.

the alternative one, which Is now coming forward, Is a mayor and a cabinet. That Is another of the choice of systems. And each of those will have a salary attached to them. It Is not absolutely compelled to be full time, but largely speaking this means we'll have a sort of a layer of full-time councilors and the rest not being full-time. De facto we have always had that In London. for many, many years It has been a group of politicians full time, always In the town hall, always meeting with you, and another group who, for them, It's a genuine voluntary act.

Mr. Scott: any other questions?

Ms. Rosalind Stewart: so I think you just said the key word Is voluntary? Some of these people are not paid? 

Mr. Smith: they are all paid. They have allowance, but the allowance Is modest. It would be somewhere between probably traditionally about three to 5,000 pounds, so that Is about $8,000 a year.

MS. Rosalind Stewart: this Isn't their full-time job? 

Mr. Smith: no. But for the full time politicians It used to be based on a system of a basic allowance, a special responsibility allowance, If you were the chair of a major committee, for example. But, even so, It got you up only to a relatively modest level of Income. So those doing It were either people who were retired, had a private Income, or who were very career minded and wished to go on to become a member of parliament or something of that kind.

Mr. Staley: Jeremy, It comes to mind when I was listening to you, In the first panel Ron Oakerson talked a lot about the separation of provision In production.

Mr. Smith: yes.

Mr. Staley: Jeremy, that seems to be Integrated Into the London borough system. In other words, the unified production and provision seems to no longer be -- Isn't the way you do things normally.

Mr. Smith: I think that's true. We no longer have the degree of compulsion, we changed our system to something called best value, which Is a duty to review each of your services on a rolling basis, not less than every five years, with external kind of supervision to ensure you've done the system. And the aim Is partly to ensure that you can justify that you have got the best value for that service, whether It Is In-house or externalized.

But In fact with a lot of authority of externalized waste collection, waste disposal, grounds maintenance, school catering, a number of other -- leisure management, leisure services, management of those facilities, swimming pools, and so on.

So there Is a great swaying of things that used to be automatically done through the public center In-house which are now regularly outsourced.

Mr. Scott: I have another question: what percentage of the employees In your borough are unionized? 

Mr. Smith: I don't know today's figures. It started at probably 80 to 90 percent. And I think It was going down to 60, 70 percent, I would say.

Mr. Staley: Including education? 

Mr. Smith: education tends to be well unionized. the teachers' union Is still almost 90 percent. There Is no compulsion, but It Is de facto they all join.

Mr. Tamaki: how are land use Issues Involving, say, one or two boroughs that may be adjacent or adjoining, how are they resolved? 

Mr. Smith: It depends -- If the Issue falls within one borough even though the Impact falls In another borough, then It Is still one borough that decides It. If there Is a piece of land that actually straddles a borough -- I am just trying to remember how we did that. I think there was probably some joint mechanism, but I can't remember.

But essentially speaking, however major the Impact on another borough, It was dealt with by the borough within which the land lies. But that Itself would give rise to quite strong Issues of representations from the neighboring borough.

Mr. Scott: let me make a follow-up question, If I can. We have something called the sunshine canyon landfill here that services all of Los Angeles. It would fall In one, particularly one small district. So how would you recommend or how have you solved that kind of problem, a huge Impact on one particular district but It services a much broader area? 

Mr. Smith: that was dealt with largely -- as I said, there Is strategic guidance from the national government which sets the framework. So that would Include any absolutely vital services. And that would protect, obviously, also the -- of a waste disposal authority which had an Incinerator which needed upgrading, all those kinds of things.

It was privatized on a joint venture, that one. so we had to -- those would be protected In the present ones. We didn't do -- the most difficult ones tend to be disposal of waste and that kind of Issue. We also had some traditional landfill sites outside London.

So, In essence, the biggest Issues tended not to be sort of bad uses of that kind, but opposition to major office developments by local people. Those were much more the kind of big Issue that split communities under the existing system where lots of Londoners said we don't want this big tall building, or whatever It Is, next to us because they took a local -- very local view on their Interest.

Mr. Scott: does the borough have any authority to raise special taxes or assessments? 

Mr. Smith: only In very, very limited historic circumstances.

One of the problems that our local government has Is a very, very Inflexible financial system where the -- there Is no longer a rigid ceiling or cap on the amount that you can raise through the council tax. But there Is a reserve power on the central government; on the national government to Intervene If they think that you are Increasing your tax rate by too high a percentage.

so It Is very, very limited flexibility Indeed on financing.

Mr. Scott: we recently had a measure on the ballot, we have had similar measures In the past, to Increase, In this case, the Los Angeles county board of supervisors from five members representing ten million people to nine members. Looking at your numbers of 3200 representatives, what Is the budget or how do you justify the budget for staffing and support for that many members? Are they staffed, or do any of them have any support staff or facilities? 

Mr. Smith: yes. They tend to be provided In small -- they are actually quite small staff groups, and they are provided according to the political groups. So each political group would get a small number of staff attached to them. We had about, I think for the whole council, probably about a dozen members of staff who worked directly for the councilors In terms providing them services.

Mr. Scott: that Is all the questions.

Mr. Staley: thank you very much, Jeremy.  To index

Mr. Fleming: two things I want to announce.

Number 1, this entire conference Is being videotaped, and videotapes will be available and also available to the media and the cable television. So you will be seeing more of this.

We also have audiotapes If you are Interested.

Vigor butler made an Interesting observation to me a minute ago after Jeremy's remarks about London government. Vigo, as you know, Is with me the Los Angeles economic development corporation. He said that every member of the British parliament has two staffers, one In London and one In their district; and that's all. So when they make a speech In parliament, It Is their speech. Nobody wrote It for them because they don't have any staffs other than two.

That would be an Interesting approach to city government. To index

Let me Introduce a fellow that really needs no Introduction. He has appeared several times on behalf of not just the economic alliance, but laced and so many other organizations throughout Los Angeles.

He Is, of course, Joel Kotkin who, fortunately for us, Is a fellow resident of this valley, living In Sherman oaks.

He Is with pepperdine university and also with the reason public policy Institute, and a guy for whom I have enormous respect and would gladly pay $24.95 for his book.

Ladies and gentlemen, Joel Kotkin.

Mr. Kotkin: thank you very much.

You’re probably saying why do they keep giving me this guy over and over again. I wonder the same thing.

But Sam Staley has to get his money's worth, so you will have to endure.

This Issue of neighborhood governance I think Is obviously one that really makes a great deal of sense for us to be discussing.

One of the things I think that people don't recognize about the city of Los Angeles and this region, It Is a city of neighborhoods, and again the people use the term "balkanization." that's the bad word for the public policy wonks and the SCAG types and all those people sitting up there with their big maps wishing they could move the pieces around like somebody In a war room. They can't and they always say well It's the balkanization.

But, In a way, balkanization Is good. I think some of the discussions earlier show that balkanization of government can actually be more efficient than a bigger government.

And L.A. Is a city of neighborhoods. We are going to be discussing this In the context of some other experiences. And It's really the vitality of L.A. which comes from the bottom up. My neighborhood, which actually Is valley village, Is a real neighborhood.

On 4th of July, who would think In Los Angeles The of July, we live on a very quiet street, people take chairs, put In the middle of the street, and we watch fireworks over valley college. This Isn't Mayberry, but It Isn't the Bronx either.

I think what we need to do Is understand that 3 ultimately government Is really about neighborhoods, and I think what the city of Los Angeles In Its expansion, and the same thing true of many other cities, really sort of lost grip. That a city and what makes a people want to stay In the city Is really their neighborhood experience.

When you ask people very often, "what do you think about the city of Los Angeles?" and there will be something unprintable, and then you ask them about their neighborhood, they say, "my neighborhood Is really nice." and that's why the city Is not the depopulated. That's why there are three and a half to four million people In L.A. because the neighborhoods still work.

It's the source of strength for the city, and It Is definitely the source of strength for the valley, I think as much as any part of LA

So that's my shtick for this little portion of the program.

Now, I want you to sort of open up. You might start thinking about this not just as an L.A. Issue, but as a broader national, even as we heard earlier, global Issue. To index

Remarks by Robert Nelson

We are going to have three speakers. Please hold your questions. I assume bob Scott Is still running around with cards asking questions. And then we will take the questions at the end.

First speaker will be Robert Nelson, who Is a professor of environmental policy at the school of public affairs of the university of Maryland, and he Is a nationally recognized authority on natural resource and land Issues.

4 and he has written about these topics of neighborhood governance for such publications as Washington post, wall street journal, and the L.A. times.

Mr. Nelson: thank you, Joel. I am pleased to be here.

I think the subject that you are talking Is one that I have been Interested In for a long time. It has been more at a theoretical level, and now people here are actually talking about bringing It down possibly to a practical level, which Is when the real fun can begin.

But anyway I am talking today about what I call a new species of government In the united states. You don't see a whole new species In the animal world or the governmental world emerge very often. But that species Is the neighborhood association and the private neighborhood association which I consider to be one of the most Important things happening In the whole world of American governance today.

We are familiar with the Idea of private service delivery. You have, as mentioned, In London extensive contracting out. But the new Idea that Is being proposed and adopted across the united states Is I guess kind of a whole new thing. It Is the full-fledged and full-scale privatization of the whole government In Itself, or at least at the neighborhood level.

These things are called various -- go by various names. We don't have a common term yet: private, residential community, community association, private 5 neighborhood.

When I mention the subject, a lot of people say "gated community." they think that's what It Is. It Is sort of a negative connotation.

Actually, gated communities are about, by the best estimates we have, which are not very good, but something like ten to 20 percent of all neighborhood associations.

The term I use Is neighborhood association or private neighborhood association, but again some of these units In Arizona, places, Las Vegas, get up to 50,000 people.

Reston, Virginia, Columbia, Maryland.

So they are not all neighborhoods, and some of them, of course, are just single buildings.

On average, the largest part of them are about neighborhood size, maybe 500 people, 300, something like that.

Now these are real forms of government, even though they are private. They collect the garbage, they clean the streets, they manage the tennis courts, run the golf club, all kinds of things.

They even have what I call a private constitution which sets out the terms for the election of the operating officers, the board, and which are -- take the form -- they are conventionally called the founding documents.

Now, the neighborhood association Is fairly new and It has had an explosive rise. As recently as 1961 there was no such thing as a condominium In the united states.

The first legislation was actually -- the first provision statutorily for condominiums was the 1961 housing act.

And besides condominiums, the other main form of the neighborhood association Is the homeowners association. A lot of people also Include In this category cooperatives, although those are more likely to be In new York city.

As of 1970, one percent of Americans lived In neighborhood associations. In the year 2000 It Is 15 percent.

And so In California, which Is still In the center of things, although I hope Its management of Its electric power Is not going to be an example for the rest of the nation, but 70 percent, at least by some estimates, of new development In the Los Angeles-san Diego area Is within a neighborhood association.

And Florida Is the other place similar to California. Forty percent of all the condominiums In the united states are either In Florida or California.

Now, the other thing, besides the fact that It's private, that Is somewhat unique about this new species of government Is the fact that It's neighborhood, or at least In many cases.

Modern political theory, If you go back to masters of Locke and Montesquieu and so forth tends to be built around Thomas Jefferson, around Individuals and nations.

Those are the central units.

there Is nothing much In political theory about neighborhoods. Nobody has written a famous historic tract called "the right of free neighborhoods" or "free right neighborhoods," something like that.

So It's really quite a novel development to have a basic political unit arise which Is organized geographically about the scope of the neighborhood.

Now, when you combine the fact of private and neighborhood, you get really quite a unique being. Private status gives you a lot of powers that would not be true If you were talking about a municipal government.

For example, states can do, legally at least -- they may not be able to do It politically -- pretty much do what they want with a municipal government. But a private neighborhood would be protected, for example, by a takings clause.

The municipality, or even a state, could never have an Immigration control, but a private neighborhood can have an Immigration control, no question about It. It Is within their legal authority.

So some people, when they look at these things, we call It private, but It actually looks a lot like sovereign. And given that It's a governmental unit, these things start looking like tiny nations.

And so In fact some of the critics say that what we are headed towards here Is some revival of feudalism with all these semiautonomous neighborhoods all over the landscape.

But, In any case, the fact of this rather sovereign status that goes with private and geographic scope of governance raises all kinds of Interesting questions.

In fact, I will plug It. It's not out, but I am writing a book on the subject right now. Hopefully It will be out In about a year or so.

What are some of the other examples of rather novel things that these neighborhood associations can do? Well, In the '70s and '80s lots of them were adults only, for example, no children. The California, Texas, Florida courts all said It Is constitutional. Of course, It was challenged as being Illegal, but the courts upheld It.

Of course, you can't do racial discrimination, but maybe -- and this remains probably to be determined -- you could have religious separation.

So It might be that you might have Mormon neighborhoods or Baptist neighborhoods, I don't know. This Is the kind of thing, actually, that the policy debate In the future has to address Is, you know, to what extent are these neighborhoods really going to be able to assert autonomy.

We do have some verdicts. In this case I happen to think It was a mistake. But congress Intervened In 988 and passed the fair housing amendments act and outlawed adult-only communities. But they did provide an exception, which they had to do politically, for senior citizen communities. So now only senior citizen communities can be adult only.

And there are lots of other things, lots of Issues. There have already been 4,000 court cases Involving Issues of what the legal authority In the neighborhood association Is, what the legal standard, when the courts could Intervene If a citizen claims they have been arbitrarily treated.

Now, when I talk about these private neighborhoods, I like to bring up the fact that In the 1970s there was a neighborhood movement In the united states of some scope. People like Harry byte wrote a book about It. There was even a national commission on neighborhoods.

The objective was to decentralize city government to the neighborhood level. It had some success, but basically never took off, kind of one of those phenomena.

The real success, the tremendous success In American life Is what you might call the private neighborhood movement which, as I was just saying, has exploded across the American landscape.

And, Interestingly enough or curiously, some of the proponents In the old public neighborhood movement are uncomfortable and don't seem to like these private neighborhoods. It seems as though If It's public, Its okay; but If It's private, It Invokes all kinds of negative associations.

Now, why have we had a turn, both In theory and In practice, away from large Institutions and towards neighborhoods? Well, It Is a long history, but I would argue the Impetus of the first part of the 20th century was too big. You had annexations, the creation of large cities, the 0 city of Los Angeles.

Over the course of the 20th century you had the federal government become basically the headquarters of the united states, the welfare and regulatory state, centralization based on the Ideas of comprehensive planning, coordination, scientific management, and so forth.

But by the 1960s, I think In American life and elsewhere, you started seeing real doubts about all this. The old socialists, now If you look to see who the citizen activists were, they were neighborhood defenders, and the socialist Idealists were hard to find.

So In general I think we have had rather wide doubts that have arisen: bigger Is not better, science was actually not as definitive as It had been promised, planning wasn't able to provide a lot of answers. Actually, the planners made enormous errors In retrospect. Large was undemocratic and so forth.

So the neighborhood movement was one manifestation. We have seen decentralization In a lot of other places, like Internationally the breaking apart of the former soviet union, even In the European community, the European union, the new states entering, quite small, two, three million, places like Slovenia, Slovakia.

I see tendencies In the whole world towards the break-up of these monolithic Institutions that emerged In the first half of the century and that these tendencies have been seen In the second half, that I would expect them to continue.

Now, what -- the thing that Is Interesting for this conference Is the fact that you have this movement towards neighborhood associations and people voting for their fee. Forty-two million Americans live In them now. Fifty percent nationwide, 50 percent of new development, over a million Americans are serving on boards of directors of neighborhood associations. There Is obviously a strong demand.

Now where do you find the neighborhood association? Well, It Is basically In the outer suburbs because to create a neighborhood association you basically have to do It simultaneously with the development of the land. And anyone entering the development Is required to join.

If you wanted to have an association and you had an existing neighborhood, It would be extremely difficult to create one If It wasn't already there from the beginning.

You have to get voluntary agreement of everyone In the neighborhood, or at least almost everyone.

So I have In my writing come up with a proposal. It goes back -- I first offered It In 1977 In a book called "zoning and property rights" which did not -- It sold and there was Intellectual Interest In the proposal, but, needless to say, It didn't exactly take off as a practical measure.

But my suggestion Is -- and this Is something that people here might be Interested In thinking about -- Is that we create the possibility of retroactive private neighborhoods In existing neighborhood areas.

And, briefly put, the way It would work would be I wouldn't let citizens -- I don't like the Idea of top down. I basically let citizens say okay, they could get together If they wanted to create a private neighborhood with all the governance and so forth, they would bring a petition to some governing body, the body would review the petition, there would have to be Issues of division of responsibility between the existing municipal government and the private neighborhood, and there might be some payments of compensation for damages or one thing or another.

But assuming that the boundaries looked reasonable and that the private neighborhoods met certain basic requirements, the citizens of the neighborhood would be able to vote.

And, In my thinking, the vote would have to be a high percentage, certainly well above majority, but It would be well below unanimity, maybe 80 percent would be about right.

And so essentially, under this proposal, the California legislature or some such body would create a mechanism which would essentially allow, after the fact, private neighborhoods.

And so It would be particularly relevant for an area like the San Fernando valley because that Is exactly the kind of place, the existing housing Is there, the neighborhood associations weren't created when much of this housing was built, so you could actually Imagine then a future where there were large numbers of these associations scattered over the valley retroactively created In a private status and taking responsibility for a whole range of very localized types of services like garbage collection, but also Immediate police patrol and possibly, In some cases, putting up their own gates and so forth.

Now, there have been other proposals of a similar nature that have been made by Robert nelson and George Leibman and so forth. So I am not the only one. This Idea Is starting to get around a little bit In various publications.

Now, to close up, just to make one last observation, I think that I am very much In agreement with the kind of vision that Ron Oakerson suggested earlier which Is there needs to be a lot more flexibility of governing boundaries, In forms of government and how we set them up.

I don't like the Idea of actually saying, "what's the Ideal size of government?" I don't think you can determine It. It can only be by trial and error. It has to be by -- and also by practical experience and the result of citizens Interacting with their government and expressing content or discontent.

To ask what Is the Ideal government Is about, to me, like asking what Is the Ideal size of business.

Obviously, you don't answer a question like that. You say, look, what we have are laws that allow conglomeration or breakup. And then we discover by experience what the Ideal size of business Is.

And that Is the way I would see governance 4 working as well. And I think that there needs to be a whole range of Issues addressed here, annexation versus deannexation, and so forth.

One of the most Important forums Is this neighborhood, the Idea of the ability to create a neighborhood, and, rather than neighborhood government, since we already have so much experience and so many people seem to like It, I would say why not private neighborhoods Instead of public government neighborhoods. 

I think that's a real Intriguing beginning for this panel.

Again, the Idea of thinking flexibly, I think, Is one of the real things that Is going to come out In this conference, and I hope that we begin to get more and more Ideas about doing things In a more Interesting way.

Government has not been nearly as Innovative as the private sector, In part because It hasn't been willing to Innovate, It hasn't been willing to try new things. That term "trial and error" was pretty appropriate to what we want to try with government a little bit more.  To index

Remarks by Doug Munroe

Our next speaker, as we are going to try to bring this more down to a grass roots level, Doug Munroe, the founder of the Calvert Institute for policy research.

He Is based out of Baltimore, which Is one city that Is definitely a city of neighborhoods, very distinctive neighborhoods, a city much smaller than the city of L.A. but even In a city such as Baltimore, people like Mr. Munro think that some degree of decentralization Is still needed.

Mr. Munro: thank you, Joel. And thank you for having me. I appreciate It.

Folks like me generally try to start off these things with a pithy and relevant quote, which I do not know off the top of my head, so we get them out of the quote dictionary.

I was looking through mine last night and didn't have a chapter on local government. But I did find a very funny quote which Is relevant to nothing, but I simply have to share It with you, and David Fleming mentioned a minute ago the British parliament, brought It to mind.

In 1888 a bill was Introduced In British parliament which would have -- with marriage laws. Benjamin Disreali, the great prime minister, stood up and said, "honorable members, I understand the bill before us would prohibit a man from marrying his mother-in-law. I should have thought this would be the height of unnecessary legislation." It pertains to nothing, but I just had to share that with you.

Let me start by telling you who I am not; I am not George Leibman, though I am representing George Leibman whom bob mentioned a second ago.

George recently, about nine months ago, wrote this report which Is out on the table In the back there. He wrote this report for an organization that I used to be the president of. It's all very convoluted, I'm afraid. But the long and short of It Is George couldn't be here. And, as I edited his report, I agreed to come.

The title of George’s report Is "a contrast to regionalism." the reason for that Is this regionalism thing Is the current great debate In Baltimore and central Maryland.

Regionalism obviously means different things to different people. But as far as we are concerned, what Is Important for us to remember In this room Is that as far as the average Baltimoran Is concerned, It means access to other people's money.

George and I are not necessarily opposed to this, Incidentally, but we think It should be a second step after Baltimore has put Its own house In order.

What I am going to do over the next couple minutes, next few minutes, Is tell you how Baltimore’s house Is not In order and then apply some of what bob has said about private neighborhoods, sort of put them In a Baltimore context and then try and put the whole thing In a secession context.

The bottom line Is, as far as we are concerned, Is Baltimore simply has got to Improve Its own efficiency In terms of providing service before It looks to tapping anyone else's money. You would think that Is common sense, but on the east coast, sadly these things are not common sense.

If I can, I will give you a little bit of background about Baltimore. It Is a very poor city. About 25 percent of the population Is below the poverty line. It's the fifth most violent city In the country. It has the fifth highest aids rate In the country. It has the fifth -- 7 everything Is fifth, apparently -- It has the fifth highest Illegitimacy rate In the country. You get the Idea.

They are surrounded, however, by some very prosperous suburbs, and It Is their money that Baltimore wants to get their hands on, not surprisingly.

My friend, Fred Siegel, who Is an urban historian at the cooper union college In New York, says that Baltimore at the turn of the 21st century reminds him a lot of Boston at the turn of the 20th century, which Is to say It's a city dominated by patronage politics served by a vast, though poorly paid, poorly skilled municipal work force; It's a city where city employment has unabashedly been used as a means of reducing unemployment, which traditionally ranges from about seven and a half to nine and a half percent; and It's a city where appeasing In public sector unions Is being considered more Important than appeasing In the middle class, which predictably has voted with Its feet In droves.

The 1997 study by the Calvert Institute, the organization I used to run, found that Baltimore’s per capita municipal employment, by function was vastly higher than five comparable rust belt cities we examined, and the same went for municipal spending, even when adjusting for different purchasing power on the dollar In various parts of the country.

Speaking of the turn of the century, that brings to mind Baltimore’s other dominant characteristic which Is race politics. Baltimore was the first city In the country to enact a municipal housing segregation ordinance In 1904 and 8 another one In 1911 after the supreme court struck out the first one.

Beyond that, until probably 30 years ago -- Baltimore Is a -- you talk about feudalism, this Is a feudal city, folks, believe me. Baltimore Is not like here; you have got to understand that.

Until probably 30 years ago, I would say, which Is before my time -- I have been In Baltimore for 13 1/2 years. I'm from Britain originally, which allows me to tag myself as another British expert. It works so well for Jeremy.

Before about 30 years ago, there was not even terribly much Interaction among different types of whites, which Is to say Jews, Catholics, protestants, and so on.

Before about ten years ago there were no other racial groups In statistically significant numbers apart from whites and blacks. Even now the Hispanic and Asian population, I doubt If It amounts to 2% of the overall population.

I want to digress and tell you another funny story. This one actually Is relevant. A retired professor and his wife, friends of my parents, tell the story when they arrived In Baltimore In the late '60s. The husband was going to teach at johns Hopkins, and they were looking for housing, new In town, and It was very Important to them to live In an Integrated neighborhood. So they were looking at some houses just north of Baltimore. And they said to the realtor, "is this an Integrated neighborhood because that Is Important to us?" they swear this Is true. The realtor looked at them and said, "why, yes, sir, we have had Catholics here for about ten years." that's Baltimore, that's how It works. And that may seem laughable now, but this sort of bizarre residential clannishness has left an Important legacy which Is very, very strong neighborhood Identity that Joel was talking about, and It's that that George Libyan’s plan for devolution would build on, to put It In a nutshell, basically by Involving city authority down to neighborhood associations.

If you could just bring up map 1. This doesn't eat Into my time, Joel.

Here we go. This Is Baltimore here. To give you some Idea, the depth of that Is 11 miles from top to bottom, and the maximum width Is nine miles. It's 80.2 square miles of land and about another ten square miles of water. So this Is pretty small.

Broadly speaking, the racial distribution, which Is very Important for reasons I am going to talk about later on, Is the north central area, just the capitol, and Is fairly wealthy and also all white.

The southeast area Is working class white.

The southern area Is some yuppies and some working class whites.

And almost all the rest of the city Is African-American with a few Latinos and Asians scattered throughout, but In no Identifiable areas. That will become Important later on as we move Into the talk.

50 within these planning districts here -- those are outlines of city planning districts, Incidentally -- within each those areas, all told, there are about 900 residential associations. Some of them are defunct.

There are huge overlapping borders, that sort of thing. Nonetheless, there are 900 of these things plus three special taxing districts.

None of these Is a government entity, but some of them are very enthusiastically run by very competent volunteers, and It Is those folk that George want to harness.

Basically he wants those people to take over a lot of the current city government's array of functions.

A lot of this Is common sense. It was only daring In the Baltimore context. And the reason for that Is Baltimore Is an absolutely, bar none, the most centralized city In the country.

For a start, In common with St. Louis, Missouri, and one or two cities In Virginia, It's an Independent city; It's not part of Baltimore county, which surrounds It. It was carved out of Baltimore county In 1854.

Since then, In effect, It has been an Independent urban county, In Its own right, and that's how It Is counted. That Is Its standing as far as Maryland law Is concerned.

It's pretty densely populated. In 1950 the population was just shy of a million within those city limits, and It accounted for 40 percent of the state population.

Since then the population decline has been absolutely calamitous, 625,000 now. It accounts for just 12 51 percent of the city's population. Mass power, absolutely huge. None of the city agency heads or head of Its cabinet people are elected. They are all Its own appointments.

The only other elected official -- the city council people and the city auditor and there Is the mayor.

That Is It. Everyone else Is appointed, Including, until recently, the school board, though that right was ceded to the governor In return for some money a couple of years ago.

Interestingly, the mayor has not been able to afford the luxury of this power. And one of the principal characteristics of local government In the past 20 years has been shedding of power to the state.

The community college, jails, the schools, In all but name, the airport, all those ceased to be city functions and have become state functions.

By the way, It says a little about Maryland.

Anywhere else a money losing airport would be privatized, but In the socialist republic, It Is turned over to the state.

The response of the Intellectual classes has been regionalism -- can we bring up map 2, please -- by which this sort of megagovernment would be superimposed over what you see there.

The black sort of square-shaped thing Is Baltimore city, and other shaded areas are the counties.

Those are counted by census bureau as making metropolitan statistical districts area.

And what folks like David Ross, the former mayor of Albuquerque who wrote a book In 1995, "Baltimore 52 unbound," they would like to superimpose a layer of government over what you see there, with the express function of redistributing wealth from the wealthy gray areas to the downtown Baltimore area there.

George and I don't think that Is necessarily a good Idea for reasons we have all heard over the course of a day about the lack of economies of scale and that sort of thing. We really don't think that to differentiate this would not be an amalgamation, this would not be a replacement layer of government as In Winnipeg, these Canadian cities; this would be another layer of government wedged between the counties and the state government.

We don't think there Is anything to be gained by that. What George proposes Instead Is decentralization to a blanket of neighborhood special tax districts -- next map please -- such as the three that already exist. That Is the darker areas.

Each of these has a population of about ,000. They are pretty small.

The other lines on the map represent census tracts, so you can see each of these tax districts, maybe two, three census tracts at the most. They are pretty small.

I live In the furthest north, the one called Charles village.

Right now these tax districts may only augment municipal power. What George would like to do Is see them absorb -- supplement municipal power and then have another 20 or 30 of them over the city.

So the city In a sense would sort of become a federation of tax districts, as opposed to a huge unified entity which It Is right now.

I have got over about three pages of stats proving just why that's a good Idea In terms of money saving, so I won't going Into It as we have heard so much today about It, the lack of economies of scale.

Let me just say this: we occasionally encountered the argument about economies of scale. In Baltimore city our trash collection routes has not been updated since 1950. It Is absolutely Inconceivable that trash collection Is more efficiently done by the city, given what I just said, than can be provided by special tax districts adequately contracted out.

All these districts are allowed, they are not forced to use union labor, which Is not the case In municipal agencies, all of which have to -- even If there were economies of scale, there would be nothing to stop them banding together to buy services together, as It were.

Let’s have the next map.

And this Is very crucial too. This Is the one where I live. This Is the Charles village, the furthest north, the three tax districts. I live In sort of the northern extremity. As you can see, It Is about 14 blocks by five blocks, pretty small.

It provides extra sanitation service pretty well and very cheaply and provides extra security service very well and very cheaply.

We think that another 20 or 30 of these can do most of what the city does and can do It better and cheaper.

That Is basically It, and I am told stop. So I won't stop, but I will get to the last page.

I will tie this In with secession.

Somebody asked me last night, why don't you just, Instead of having all this sort of patch work, these little things here, why don't you take the sort of the more efficient parts of Baltimore, why don't you just pullout altogether? There are numerous reasons for that, some of which are pertinent In your case and some of which are not.

To turn to the Maryland specific stuff, the question Is where would we secede to.

As I mentioned, Baltimore city Is not part of Baltimore county, so the seceded bits of Baltimore would not qualify for county services because they are not part of the county. That Is a crucial consideration. They would have to be annexed by the county, and no part of the county Is going to annex any part of the city; It Is simply not going to happen. So that Is number 1.

And, second, even If the seceded parts of the city were Incorporated within the county, I don't think that would get us the level of local control we are looking for.

This brings me to something of Interest to you. The Baltimore county executive Is just as powerful and just as centralized as the Baltimore city mayor. So In effect, you would simply be exchanging an Inefficient leviathan for a slightly more efficient leviathon.

Also there are race politics to take Into concern. Any secession movement In Baltimore would simply look like wealthy white folks trying to escape a majority black city.

I understand that that Is not entirely how things work here, but I think It Is a consideration I really think you ought to take Into account In your public relations campaign.

If the media gets even the smallest whiff of your detachment movement looking like sort of legally sanctioned white flight, then the negative pr I am sure would absolutely doom the thing.

So on a scheme such as I am proposing, you should maybe think about here, In effect, you get all the benefits of secession. You get local control, truly local control, In areas of 15 to 20 thousand people. Here It Is 15 to 20 thousand people, and you don't get any of the negative pr because who can argue against local control. That Is something everybody wants.

So I will leave you with that. If you have any questions, please ask.

Thank you. 

Mr. Kotkin: I think one of the things maybe we will be able to get Into In the discussion Is Increasingly one has to wonder what Is left and what Is right In these discussions because local control and democracy Is traditionally seen as the liberal cause, and yet sometimes liberals are the ones who least want It.

56 and I think that these Innovative solutions -- one on the private side, one on the public side -- may have a lot more to do with what I would see as being part of what the democracy wants In terms of promoting democracy.

And, by the way, I have been to Baltimore, and I have been on the Charles, the Charles street corridor, and It really Is one of those places In Baltimore where you can walk, and really It Is quite pleasant for a decent period of time, and you can see the difference.

These business Improvement districts all over the country have been making a lot happen. It really Is a kind of grass roots government that seems to work.

Our last speaker Is Edward Schwartz who Is president of the Institute for the study of civic values.

Since some people here want to start a city, It Is probably not a bad place to start. It's an organization he founded In 1973. He also, I guess -- I won't call him vagabond, but he was a councilman-at-large In Philadelphia, directed the Philadelphia’s office of housing and community development.

Like Baltimore, there are some similarities between the two cities. These are -- what's Interesting, these are models that have been developed In conditions that In some ways are harsher than the conditions we face here In the San Fernando valley, and I think we could learn a lot from them.

So, Mr. Schwartz.

Mr. Schwartz: I was advised to pull the mic up.

57 good morning, or afternoon, whatever It Is, In whatever time zone one might be. I am In the midst of two of them.

I want to say a word about my own work. I am an activist for about 40 years. A decade spent In the student movement In the 60s, I grew up In Scarsdale, New York, went to overland college. So that was the second location where I lived.

Then when I was national president of the national student association In the late '60s, I lived In Washington.

Then I moved to Boston for three years, Cambridge, and came to Philadelphia 1971, '72, to essentially pursue the kind of civic Idealism and democratic politics that I had evolved and espoused as an activist In the '60s.

I do have a doctorate In political philosophy, which will come out In the nature of my remarks.

Much of what I have done Is to do -- to apply what It Is I have tried to do In the course of the work. And In the 1970's I was part of this neighborhood movement that has been characterized here, an old friend of mine, Harry Boyte, and would not characterize It exactly as It has been.

In 1983 I did become a city councilman-at-large, running on a neighborhood agenda.

Philadelphia has a council of 17 members, 10 of which are district members and seven at large. I was one of these large members.

From there I did direct the city's office of 58 housing and community development during the executive branch and was In charge of disbursing the community development block grant, which here In Los Angeles and elsewhere Is used for community building, primarily In terms of physical development.

And since 1992 I have been back as an activist again working on how you broaden the relationship between citizens and government, how you promote economic opportunity.

And, as a part of both, we can use the Internet to achieve both those goals. To me the goal has always been civic empowerment and citizen empowerment, and the work has always been finding ways to help citizens and government to connect to each other around the goals that we mutually share.

I guess the core question I am going to try to address In my remarks Is: to what end? We use language like services and efficiency and whatever, It's all kind of airy.

And what exactly Is It we are trying to accomplish? And I would also suggest that while there has been a terrific discussion of government here, the other side of It has to do with the nature of citizenship Itself.

We have heard that 125,000 Is one level of civic. People want to live In cities of 25,000.

From the sheer standpoint of the history of decentralization, If you will, Plato felt that the Ideal city was 5,040 members. That was the only number that was evenly divisible by every digit from one to ten so you could create units that would be completely equitable on that basis.

Some centuries later the social contract would be legitimate to a citizen only If the community were no larger than 2,000 people. And In this country, contrary to what was said, there was a vast antifederalist movement, not only In the neighborhood, but In the name of the kinds of communities that were no bigger than the neighborhoods we are describing here.

The entire battle over the united states constitution was In fact a battle of whether we would have a national government that would supersede and create greater federal power over all local governments, and the antifederalists were deeply concerned about the kind of centralization being proposed because they believed that America had to evolve as an agrarian decentralized society In which there were relatively strong communities that could exert some Informal control over the decisions that affected our lives.

The antifederalists really lost that argument; and In losing It, we have gained whatever a national government was supposed to provide us. And the same arguments that In fact were made over the federal government can be applied down to cities and whatever.

We bought Into a level of governmental work that In fact Is Important to what was perceived to be national safety and, even more Important or as Important, commerce.

But the point that all ant federalists made was that there were real trade-offs and that at some point or another you could not have both. The Iron law of oligarchy, 0 as Michel’s put It, Is an Iron law. The larger the number of community people In a community, the smaller the percentage of people who will make the decisions In It.

In this room If each person were permitted to speak for five minutes, we would be here for several hours.

So everybody doesn't speak.

And In the city of Los Angeles If each person were asked to speak for five minutes, we would be here for several weeks. So, needless to say, everyone doesn't speak.

My comment therefore Is that If you approach democratic politics as I have with that understanding, you know from the beginning that In fact you are going to live a life In which this Ideal Is compromised. It Is Inherently compromised by the nature of the choices that we have already made.

So the kind of conclusion you end up with was In fact Montesquieu's "the federalists," which Is that we can have a national government and somehow regionalize and federalize the nature In which power Is exercised.

Those of us who were Involved In the neighborhood movement and have continued to be Involved did not seek neighborhood government. Milton cutler went around the country with that little book and we told him no, what we want Is neighborhood empowerment, the capacity of people and groups within neighborhoods to hold the political system accountable to the goals that we share, very much similar to the language that we used at the outset of these panels today to describe what, whether you are going to call It 1 Incorporation or secession or some kind of devolution or decentralization Is trying to accomplish here In the San Fernando valley. But be clear that In fact any effort to decentralize or devolve the government must begin with an active citizenry.

And now I will do what Is obligatory In all conferences In which political science Is the subject: I will quote from detocqueville, who has yet to be mentioned, two lines from democracy In America. One has to do with the spirit of township In new England: "the township of new England possesses advantages which strongly excite the Interest of mankind, namely Independence and authority. The new Englander Is attached to his township not so much because he was born In It, but because It Is a free and strong community of which he Is a member and which deserves the care spent In managing It." sounds very much like we would like to think Is the prime force here. But then there Is that other section of detocqueville In which he describes the despotism that Americans have most to fear.

This Is his characterization: "I seem to trace the novel features under which despotism may appear In the world. The first thing that strikes the observation Is an Innumerable multitude of men all equal and alike, Incessantly endeavoring to procure the petty and paltry pleasures with which they glut their lives, each of them living apart Is as a stranger to the fate of all the rest, his children and his private friends constitute to him the whole of mankind. As 2 for the rest of his fellow citizens, he Is close to them, but he does not see them; he touches them, but he does not feel them. He exists only In himself and for himself alone, and If his kindred still remain to him, he may be said, at any rate, to have lost his country." you have to ask yourself about the San Fernando valley, whether or not the relationships among citizens here are closer to that spirit of township or the spirit of despotism, because If It Is the second, no matter what level of government you establish, you will still have the same problems.

Now, In Philadelphia we have over 40 to 50,000 people who are neighborhood builders. They are block captains, they are town watch members, they are people who are Involved In civic associations. They work as school volunteers; they work as friends of the free libraries.

And what we have been able to do over the last 5 years Is to build these networks of neighborhood builders Into civic associations which can hold government accountable In an Informal way to what we want the public sector and the private sector and the citizens to do together, to the end of four basic goals: we want a city to be clean, we want It to be safe, we want It to be economically viable, and In this case that means people working as well as businesses and business strips available for business, and we want It to be a decent place to raise our kids.

In each Instance what we have managed to do Is structure public-private relationships district by district 3 among these groups, often also working with a party organization, and I mean political parties here, In which committee people still exert the kind of power that doesn't exist anywhere else to define the way In which government will operate.

The primary Issues for us are not the delivery of, quote, services like handing out pieces of paper. Yes, we are concerned about trash pick-up, but there are very few parts of the city of Philadelphia where people complain that the trash Is not picked up on time.

The harder Issues for us, and I suspect for any of us, are wrapped up In the notion of progress, the worlds In which government must In fact Invest Its resources to make Improvements over time.

So In our city the real question Is not how do we get the trash picked up, but how do we repair or demolish creatively thousands of boarded-up vacant houses that have been left behind by people who left the city for economic reasons.

The Issues are not whether the police will come In five minutes or five seconds; the Issues are how we help thousands of people who are currently In the drug traffic cease that activity. That Is a measure of Improvement that requires a strategic relationship between the citizens and government In order to Improve those conditions and to make people better citizens.

In terms of the economy, yes, It's partially helping businesses come back to our center city and our 4 neighborhood commercial strips, but It's also helping the 19 to 30,000 adults who right now are being told you are off of welfare or you loose money, helping them to get Into the labor force and do something which Is an educative task, again measured not by service, but by progress.

And finally and critically Important, It's about the education of our children, preparing them for a future that requires far greater skill than the existing economy or the economy that Philadelphia left behind In which everyone could work In a factory, didn't need a high school diploma, and make a pretty good wage. That's gone.

Now even a machinist must be a skilled craftsman. These are not Issues that are resolved In the language of efficiency of services. They are In fact Issues that are resolved In the language of effectiveness and productive relationships between government and citizens that In fact are not touched at all by the language that has been used to describe this problem.

But those things do require a kind of decentralization because ultimately what they all require, as does all good teaching, Is a powerful relationship between government and citizens, a powerful relationship between the executive branch, between those who are elected to public office, and the people who work for public departments, and the civic groups within the community.

Those are the relationships we have been able to build. And I will not say that everything that we have done has worked terribly well, but the problems that we are 5 facing would not be resolved by some new level of decentralization. They really In fact do revolve around our strategic judgment In preparing people to enter a work force and our strategic judgment In how you help children learn.

And, Interestingly enough, those two are entirely outside the scope of the government that Is being described here.

Our county government and city government are coterminus; so, to that extent, they are the same In Philadelphia. But the school district Is a completely Independent operation, and yet the education of children becomes the primary object.

The job training programs are programs run by the city, but they go way beyond In terms of the challenges we face, the simple task of making sure the trash Is picked up In time.

So the questions It seems to me you need to ask Is to what end, what exactly Is supposed to be different under a new government that does not exist now? What are the substantive problems that you face In this county that you want to solve? And how can you build partnerships between citizens, elected officials, and those who are hired by them to make them come about? And If you start with those questions, understanding that yes, district by district there must be active tangible relationships between the governed and those In the government; then you have a chance to succeed.

But If the language Is placed and the thinking Is placed In anything less than that, you will discover that 6 you will make all your reforms and nothing will be reformed.

Thank you.

Mr. Kotkin: bob.

Mr. Scott: we have a few. Anybody else who has any questions? This Is a general question for the panel: public employee unions seem Inclined to oppose reorganization, In particular special reorganization like that being discussed In Los Angeles. What Is In It for them? Mr. Schwartz: I think that I have a strong relationship, positive, with the public employee unions of Philadelphia. That doesn't mean I have supported everything they have done. We have had our differences.

Many of them have the same pride In wanting to deliver services that we do. So being able to work In a city which Is well governed and well managed Is something that many of them, not all, want.

To the extent that there are partnerships between citizens and government to Improve cleanliness and that areas of public life that Involve them, that Is what Is In It for them.

Do they seek remuneration? Yes. Will they In fact -- are there circumstances In which contracting out to a waste management might be cheaper? There may be. And there are models around the country which public unions have been put Into competition with private waste companies.

And the If argument Is efficiency, then In fact sometimes the waste management wins. But there Is something to be said for a public service.

A fellow who worked for me In the housing office eventually took a job In the private sector. And when he left he said, "you know, I feel -- I am moved by economics to do this, but I have real pangs here because my father was a public worker and my grandfather was, and I was brought up to believe that public service Is a high calling." I wouldn't want to elevate the public employees of Philadelphia quite that high, but there Is something like that Involved If you are asking what Is In It for them. They take pride In their work too.

Mr. Scott: anyone else want to comment? Mr. Munro: I would have to say that under the plan I have outlined and George Leibman wrote, the truth of the matter Is not terribly much In It for unions.

Personally I think that Is a positive thing.

As a matter of political liability, I am not pretending to, even If George Is -- I don't think he Is -- but I am certainly not pretending that George’s plan Is going to occur In Baltimore any time In the next couple of millennia because It Is not.

One of the advantageous things In breaking the city down Into special tax districts or boroughs, or whatever you want to call It, Is that, as I mentioned earlier on, special tax districts are not obligated to use public employees, which I think Is a positive thing. And even If they were, It would make bargaining -- let me just be blunt about this -- It would make bargaining more difficult In the 8 public sector unions than It would for management Inasmuch as they would have to bargain with 20 or 30 entities, as opposed to one.

Personnel costs are by far our biggest cost In Baltimore. A lot of that Is driven by an absolutely gargantuan bureaucracy. It's 21,000, which I wouldn't be surprised If It's more than what you have here for a city that Is only a third of your size.

So as to say I don't think George’s plan has -- nothing terribly much In It for the unions, and I have to say It's a good thing.

Mr. Nelson: I would say that the vision I was describing at the end where you don't see what the best unit of governance Is per se prescriptively but discover It through trial and error and evolution and different sized governments and seeing which work, but then being able to change quickly when they don't work and to try something else. It Is hard to reconcile that vision with a lot of the practices, at least of not just public -- well, with public employees' unions.

And In general one of the difficulties of that kind of a vision Is that you have a lot of Interests that build up whenever you have any governmental form, and they tend, you know, If you want to make changes, somebody often gets hurt. And If there are too many vetoes out there In the system, then you end up with gridlock In your governmental forums and In other things.

And, In my view, our system now Is, one of Its biggest problems Is gridlock. We don't have enough opportunity to experiment and try things, and that's because we have given, In a lot of cases, too large a weight to the Interest of particular groups.

And so, In that sense, I would be concerned, although clearly It Is also Important, you know, to try to build as wide a consensus, even to have a system where you do have flexibility If the unions have the buy-off on It, and Initially they may have to go along.

Mr. Kotkin: I am going to take my prerogative as the moderator and kick It back to ed for just a second here.

In Philadelphia and Baltimore for sure, and even here In the city of Los Angeles, to some extent, the public employee union also has a racial aspect to It.

Even In Los Angeles, which Is not a particularly heavily American-American city, American-Americans are way over-represented In the public sector so that any attempt to sort of put pressure on the public sector becomes a race Issue. Obviously, In cities like Baltimore, Philadelphia It's maybe even maybe more so.

So In your sense of building a community, Is there any way out of this conflict between the Interest of neighborhoods and the Interest of groups that have felt historically ostracized or historically outside the circles of power? Mr. Schwartz: I think you have raised two balls and thrown them In the air. One Is public employee unions and one Is Americans-Americans. There are a lot of Americans-Americans now, an Increasing number of Hispanics In Philadelphia. All of them are not public employees.

Mr. Kotkin: but there Is a -- Mr. Schwartz: no. I am merely saying, for example, the current African-American mayor of Philadelphia ran ultimately without much support from the public unions, at least two or three of them.

Now, In terms of the African-American neighborhoods, the fact Is the coalitions that we built were heavily populated by African-American In north Philly. I happen to live In mount airy which Is racially and economically Integrated. I have worked and lived In German town which Is one step down on the economic ladder.

So that movement, the whole neighborhood movement, was shaped as an effort to build an Interracial movement that would fight for neighbors for everybody. And that has certainly been at the center of my own career, being willing to do that.

In the most recent years we have worked on negotiating explicit social contracts between neighborhood builders that I described and government around clean, safe kids and opportunity that would define mutual obligations to fulfill objectives.

One of the roles that the social contract plays, we use the language of the preamble to the constitution as a way of Identifying shared values, who are we the people of this neighborhood, how do we secure the blessings of liberty to ourselves and our posterity; and then once you establish some goals, what Is the way we promote general welfare.

If you bring a diverse group together and stick with that language, then that Is a way of overcoming what might be ethnic and racial tensions because even If people privately might want to disagree, they feel shamed Into saying no, we the people as white people or something like that.

So the whole movement has been really a movement as much to empower African-American neighborhoods as anything else, and I happened to have served In the government led by w. Wilson Goode, the city's first African-American mayor, on a city council led by a fellow named Joe Coleman, first African-American president of our city council. All of It came out of the neighborhoods movement.

Mr. Scott: next question: how can schools be funded under the Baltimore special tax district proposal? Mr. Munro: schools In Maryland are Interesting.

school districts are coextensive with county boundaries which means Baltimore county city school district has exactly the same boundaries as Baltimore city.

And we have -- most of our school boards are not elected and usually appointed by the governor. The Baltimore city one was appointed by the mayor until a couple of years ago when that power was -- theoretically It's a jointly held power with the governor and mayor, but as a practical matter It means that the governor chooses the school board.

But In common with many poor districts, the fact of the matter Is that most money from Baltimore city 72 School district comes from state and federal government anyway.

George’s plan does not address education. We would Imagine education would remain a school function which, as a practical matter, In Baltimore means a state function.

Mr. Scott: question for Joel: I am looking around this room. Please share your opinion of why there are mostly white people Interested In this seminar.

Mr. Kotkin: I think the San Fernando valley Is sort of an Interesting case study because I think the established communities here are predominantly white.

It's In the new geography somewhere, but It was like In 1960 or '70, It was like '95 percent white. So obviously the established population here Is predominantly white.

There Is not a long history of strong minority neighborhoods. So many of the minorities here are recent Immigrants, as opposed to, let's say, east L.A. where there Is generations now of Latino Involvement In politics and neighborhood organizations.

If you go to the Latino parts of -- well, Van Nuys, they have only been Latino for the last maybe 10, 15, 20 years at the most.

So I think some of It Is the age of that, and frankly some of It Is who has got the time and the money to waste an afternoon with us. And right now that Is predominantly not the case.

You even to go the San Gabriel valley and you will see, even though the San Gabriel Is getting more Involvement by the Asian-Americans, It's a fairly recent phenomena.

Some of It Is historical lag, some of It Is economics, but I think It Is going to change over time.

I think one of the challenges of the secession movement, If you want to put It that way, Is going to be to bring more minority members Into It because I think one of the speakers, I think, did make the case that If the secession movement Is perceived as a segregationist movement, even though this Is an absurdity, given the population numbers, It could hurt the movement a great deal.

I think there has to be more of a need for out-reach. And not to criticize anyone, but I think there Is a need for out-reach Into Latino and other communities.

Mr. Scott: question for bob nelson: where does the money come from to support private neighborhood associations In low Income areas? Mr. Nelson: these organizations basically fund their services by assessments based on the ownership of property. So If the property Isn't worth much, It's true there Is going to be a problem with revenue.

On the other hand, I think that, at least I have argued, that neighborhood associations In poorer areas might be some of the most successful associations, and In fact that residents of poor areas or Intercity areas often suffer the most from the chaos which Is associated with the lack of control over the neighborhood environment and that In fact If 74 they could get control over the neighborhood environment, you know, and get better security or police patrolling, maybe better control over access and entry Into poorer Intercity neighborhoods, the quality of the environment would Improve significantly, and that would also be reflected In Increases In the value of the property. So that would raise the revenue potential.

I mean the other answer to that obviously Is where do the poor people In general get revenue or Income or support beyond what they can Immediately afford, and that's from various government redistributing programs.

And there Is no reason that neighborhood associations couldn't participate In various forms of redistribution, and In fact the neighborhood association might be a particularly effective vehicle for that and It might even be an effective political vehicle.

Private neighborhood associations are getting Involved In politics and Increasingly serving as conveniently organized mechanisms for asserting the Interests of their residents as they are formulated on a neighborhood scale.

Mr. Munro: can I address that as well? I didn't bother going In to It In my remarks, but George’s report does address that.

Broadly speaking, what would happen Is this: as these special tax districts' responsibilities Increased, their taxing authority would Increase too, and there would be a corresponding drop In citywide taxing authority.

However, the city government would not whither 75 away entirely, as I said, sort of become sort of like a federation of these things, but there would be an overall city government, nonetheless, with greatly reduced powers.

But a certain amount of taxation would still, citywide taxation of that would be used under George’s plan.

That would be redistributed to the poorer neighborhoods, broadly speaking, similar to the sort of London scheme that Jeremy outlined earlier on. Instead of the national government giving money to boroughs, this would be the city government giving money to the neighborhoods, but It's the same essential concept.

Can I clear up one, perhaps, misconception? It Is absolutely categorically not correct to think that poor Inner city neighborhoods are Incapable of organizing themselves.

I can tell you from experience with Baltimore city neighborhoods that the Inner city predominantly black areas are better organized than the wealthier white areas.

Part of that Is because they need to be because they do get worse services and they need to -- the squeaking wheel gets the grease -- they do need to be louder and better organized.

They are far, far better at sort of tying In their activities with the churches and this, that, and the other thing. So please, please do not think that just because an area Is poor, they can't get organized because they can and do In Baltimore.

Mr. Schwartz: I want to agree with the last comment. Certainly many of the, as I said, neighborhood 76 building projects that we have supported have been In the poorest neighborhoods of the city, and block captains and the rest are more prevalent there than elsewhere.

I suppose the parallel demand of those groups In terms of coherence In response to a move toward private associations Is contiguous districts for the delivery of departments. That's a terrible problem.

We have recreation districts, police districts, sanitation districts, and license and Inspection districts. They are all different.

So for the last 20 years, without success I might say, we have fought hard to have one system of districts that would In fact work for everything.

Where I saw this somewhat In operation -- not so much In Baltimore, this was In phoenix, Arizona -- you want to talk about a large city that seems to be able to coordinate whatever It Is doing In districts, phoenix Is really a good example. I was quite Impressed and did not expect to be.

But frankly most low Income people would say why not try just to make sure that we have control of the government Itself and the resources of the entire police department rather than creating some little enclave and then hiring your own. That wouldn't make any sense to them, frankly.

Mr. Scott: a final question for bob nelson: at what point does a responsible leader administrator tell the authorities called community neighborhood associations that they too must share In the regional burdens, airports, 77 highways, new buildings, et cetera? Mr. Nelson: well, I mean they would be participating. I think that certain functions of government would still be conducted on a regional level, like airports and roads and water systems.

Obviously a neighborhood association Is not going to arrange for Its own water or Its own electric power.

But the way I would see It Is that you would have a lot of contracts between neighborhood associations and these wider bodies, and you might also see greater privatization of the wider bodies so that you would have privatization taking place both at the neighborhood scale and In terms of the macro structures of governance.

And the macro structures of governance would themselves be expected to be able to cover their costs or In some cases make a profit by the charges that they Imposed.

But there would still obviously be some points at which there would be still some government programs that were being provided for residents of local neighborhoods and where there would be significant elements of transfer of revenues from richer parts of cities, regions, to smaller parts.

Mr. Fleming: In response to a question earlier, let me point out something that I totally agree.

We are talking about African-American neighborhoods. There Is no question In the city of Los Angeles there Is one councilmatic district that Is light years ahead of everybody else, and that Is mark Ridley Thomas' district, which Is south central, which Is almost exclusively African-American. And, with the churches, they have organized Incredible neighborhood organizations down there because, as you say, they had to for their own safety, for their own protection. And they have done a marvelous job.

So consequently, If this city ever did adopt a borough system, they practically have one In place today.

Mr. Schwartz: let me just say, If you are living In a neighborhood and you own your own home, as Is the case In Philadelphia, or even If you are a renter In a decent apartment, that your work Is a means of living a decent life, It Is not a career, then what Is of greatest value to you Is your neighborhood, your block.

I mentioned 3000 block captains. We have a Philadelphia gardening program where frankly a lot of older women and African-American neighbors are taking vacant lots and turning them Into gardens, and It's a huge project In Philadelphia. It has been as long as I'm there.

And those who would like to connect without paying a dime, If you go to the web site that I manage all this stuff called Philly neighborhoods.org, It gives you a gateway Into lot of those projects. And If you look for the social contract project, you get a full web page devoted to all of that.

There Is a national web site also called neighborhoods on-line.net. The link there has been a little screwy the last few days. But any one of them will go to the others, and you will see some of the kinds of projects that 79 are being done along these lines, and I'm glad to hear It's been happening out here In LA

Mr. Fleming: I am going to ask this panel to stick around because the next panel coming up Is going to have some general discussion, and then I would like to get Into the kind of debate that we had last evening at dinner, which Is a real give-and-take debate which really points out a lot of the things we have been talking about all day.

So rather than taking a break -- we want to get you out of here a little bit earlier -- If we can go ahead and move to the next panel, and then we will proceed.

(pause.) Mr. Poole: can I ask you those of you who are standing to take your seats so we can get rolling here.

The Idea for this wrap-up round table session Is to have a number of very short reactions to what has been put on the table today, focusing more specifically now on which of the Ideas that we have heard have direct application to the situation facing us here both In the San Fernando valley and Los Angeles generally.

And each of our people has about five minutes to make some Initial comments along those lines, and then we will have discussion among both panelists and you In terms of your further thoughts, comments, and questions.

So let's begin with Shirley Svorny.

Shirley Is economic professor at cal state Northridge. She specializes In urban economics, and we probably have seen some of her very thoughtful articles 80 talking about these very Issues.

Shirley.

Ms. Svorny: I come to the whole Idea of looking at city size from kind of an Institutional prospective. As an economist I spent a lot of time thinking about what works and what doesn't work, and I know If you set up Institutional structures to give people the right Incentives, that that Is going to get good results.

So I was pleased today that several of the speakers really spoke to that. They talked about how Important It Is for communities to have the ability to tax and to regulate to give people a feeling that what Is going on In their communities Is really something that they have some control over, that that Is what Is going to give you the kind of participation and good outcomes that you want.

I thought It was funny when Steve Soboroff showed up and said the reason Burbank Is doing well Is that they have Bud Ovrum; right? That Is kind of the antithesis of how I look at the world. If we just took him and put him In L.A. then things would work? That Is not how It would be.

That Is kind of my point, that It's the Institutional structure and the size of Burbank that makes It work, not that he hasn't really contributed In a big way toward Burbank's success.

But It Is not that simple, and that Is why I think It Is Important to look at rightsizing cities.

I want to say a little bit more about economies 81 of scale too because so long In this discussion of rightsizing, people have been saying things, Los Angeles and In the valley, about how It would be more costly If we have a smaller city.

I hope today's discussion with three people, one after the other, explaining that there are no economies of scale and city size will finally close that discussion. But I also wanted to add a couple more things, that there are some papers I have read that the guys today of course didn't talk about. They couldn't cover the whole literature.

The best work on fire protection, which wasn't mentioned today, suggests that In fact once you get to like, 25,000 households, that there Is no economies of scale In fire protection, even though Milan Dluhy today made It look like there are economies of scale In fire protection.

You have to remember he was looking at very small cities, and so there may be advantages when you go from very small to medium. But some of the work I have done has really looked at that particular area most carefully, shows that there are no particular economies of scale.

Same Is true of police. They talked about It today, but there are other studies that looked really closely at communities that are similar In a lot of different characteristics but are served by large and small police departments, and they found that the communities that are served by small police departments In many different kinds of measures of outcomes, not just looking at how much crime there Is, but asking people how happy are you with the police 82 service In your department, those studies suggest that there Is no evidence of economies of size.

The last thing I want to say Is about neighborhood governance. And I want to make sure that we don't get confused.

The goal In my view Is not to have an active citizenry. I don't want to spend a lot of time In neighborhood council meetings. I want It to be like the private sector where, when I need a suit, I can go to the store and It's there.

I want government to be that way. I want It to be the case that we hire somebody to pick up the trash In my community who does a good job, and If they are not doing a good job, the public officials are accountable to the community, so they make the changes that are necessary.

I know there Is some benefits to residential participation and things like police where you actually need people to be active; otherwise It doesn't It work. You can't just bring a police force and clean up the neighborhood.

But In other areas where that Is not Important, I don't think the goal Is neighborhood participation, I think the goal Is services that please the neighborhood.

Mr. Poole: thank you very much, Shirley.

Our second participant Is Sam Olivito. Sam Is the executive director of an organization that Isn't as well known as I think It ought to be In California, that Is the California contract cities association.

This Is a membership organization of about 80 83 cities In California, mostly In southern California, that obtain many of their services by buying them from someone else, either public sector, agency, or the private sector.

Sam.

Mr. Olivito: thank you very much, bob.

Let me give you a quick overview of the California contract cities association. We were born 1957.

As a direct result of 1954 Incorporation of Lakewood, city of Lakewood, and many of you may have known or you studied, reviewed the Lakewood plan, the first time the city was Incorporated where all of Its municipal services were contracted with the county.

It has proven to be a very successful operation and has brought local government to the closest or the closest form of local government and representation to the people that we can find.

It Is rather difficult. I see that being the last part of the symposium, we thinned out a bit. Hopefully we still will have some of the general discussion that Dave would like to have as we had last evening.

Let me just run through very quickly some of the points of why we believe contracting for services, for municipal services, are the most cost effective way of providing those services.

The premise behind contracting Is contracting costs less. The advantages, there are several for contracting. Some of these are not duplicated. Personnel services are not duplicated. City departments have access to 84 specialized equipment and procedures.

County staff with their detailed historical records of development are on call. In other words, If you need something In emergency, you can rely on them bringing the necessary resources to solve the problem. The flattened organizational structure results In a lower district -- rather lower direct and Indirect cost.

There Is no protective collective, protracted collective bargaining process. That Is reduced.

Training and technology can be continuously upgraded. Projects requiring a quick response can be Integrated Into the normal workload.

Some of the headaches of the personnel administration are reduced.

Detailed project definitions, entire cost restrictions encourage better planning.

A greater source of service providers leads to Increased organizational flexibility.

Contracting personnel not compatible with the organization are easily replaced.

Competitive bidding, lower costs occur.

Since contracting with the county Is the way we started, we become contracting In the private sector. That has brought about some economies In the cost of contracting, In particular public works, engineering, those kinds of services.

Contracting for the law enforcement services, of course, as you know, and all of the -- that you have seen 85 today depicts that those costs go up.

contracting Is a target where there are service problems. Liability exposure Is shifted to the contractor In most all cases.

There are some disadvantages of contracting for municipal services. Let me give you some of those very quickly.

Direct control of some of the cost factors, wages, benefits, you don't have much control over that.

Some customer satisfaction Issues are more difficult to resolve.

The community Identity Is somewhat weakened as various private and public providers offer city services.

With reduced director control of personnel, some contractors may exploit employees.

Detailed specifications costing time and money are required to select appropriate contractors.

And the city may have a few backup resources In an emergency.

City staff may lack contract administration expertise. Some direct control Is lost.

Let me just go over briefly some of the conditions which help to get contracting for services.

There needs to be a positive attitude towards local government and the authority for contracting. It Is a community decision, It has to be made by the community.

It Is done easiest In growth areas. Stable and productive political relationships must occur.

community-wide trust and understanding, as I mentioned.

A positive city and county relationship and private relationship Is required.

Willingness to accept the risks, and willingness to accept a lesser degree of control.

There needs to be an adequate political support for contracting. You must have that In order to have It done.

And the ability to weather labor strife and opposition to contracting.

Those are just some of the points I think have been talked about throughout the entire symposium.

We again believe that most municipalities that have Incorporated have no choice because of the economics today. You can't build a police plan unless you have the resources to do that. You either must contract for your services or any of the other larger services that the community requires.

So there are about 121 cities In the state of California. The benchmark Is a contract for their services for law enforcement with the county.

We have about 50 percent of those or a little more than 50 percent of those In our association, and we become more politically oriented due to the fact that we have gone statewide for certain reasons and protecting the resources we currently have to make sure the state government doesn't take any more than what they have taken from us In the past.

having said that, I will be happy to answer any questions.

Mr. Poole: thank you, Sam, very much.

Next we have heard from Joel Kotkin earlier In the day as moderator, but, Joel, If you have some succinct thoughts to kind of steer us In the direction of where do we go from here applying these Ideas to Los Angeles, now Is a good time for them.

Mr. Kotkin: who said bob Scott can't fix anything? Basically I wanted to say that these are very Innovative Ideas. And what will be Interesting to see Is whether or not If there Is a city of the San Fernando valley, that some of these Ideas are taken.

You could shrink the government of L.A. down to the San Fernando valley size, but If you don't do some of these Innovations, I think you are going to be behind. That would be the thing I would like people to think about, this thinking outside the box.

So much of the San Fernando valley government Independence movement Is negative, and I think so little of It Is positive and so little of It talks about anything other than we hate the city of L.A. and we want to do something so we can get rid of them over the hill.

But we talk a lot less about what we want to do here. So maybe at this conference that would be the direction do move today.

Mr. Poole: I think that could be kind of a light motif for the rest of this afternoon's discussion, I hope.

next we will hear from Nicholas Conway who Is executive director of the San Gabriel valley council of governments, an area that Is growing very rapidly and hopefully has some additional lessons to offer for us.

Mr. Conway: thank you.

Let me -- It's fascinating to listen to all the discussion about rightsizing city governments and the like and maybe apply some of those concepts that were thrown out here today and kind of move It to a laboratory ten miles to the east of this and let's talk about how at least one other valley has structured Itself and the similarities and dissimilarities that exist with respect to the San Fernando valley because I think the prototype In the San Gabriel valley does have at least some pearls of wisdom as to how to possibly structure a government change In government structure, at least as It relates to San Fernando valley.

The San Gabriel valley or, as we like to think, "our valley" Is surprisingly very similar to this valley.

It Is approximately 350 square miles. It Is home to some two million California residents living In -- and here Is where the dissimilarity comes Into effect -- living In some 30 Incorporated and unincorporated county communities.

We have within our geographical boundaries, which stretch really on the far west to the city of Pasadena, coming down the uncompleted 710 freeway to the city of Montebello, and coming along the 60 freeway, stretching out to the county line, touching san Bernardino, orange, and 89 riverside counties In the city of Pomona, coming back up to Pomona and the city of Claremont, and running back along the foothills.

Within that geographic area, as I mentioned, there are approximately two million California residents living at least 30 Incorporated cities. We have approximately 750,000 business employees working In some 68,000 private sector employers, all scattered throughout these 30 cities.

We have some of the oldest communities In the Los Angeles southern California, even for the state of California for that matter, and some of the newest cities.

We have cities that range In size. Our largest city In the valley Is Pasadena and Pomona -- In fact Pomona Is now our largest with 143,00 population -- down to the city of Bradbury with 850 people.

Our average range of size Is approximately 9,000 population, city. And we have within there the largest number of county residents living In unincorporated communities In Los Angeles county.

So we really have somewhat of a weird hodgepodge of people who live In Incorporated communities of which they are fiercely proud of. And the size really Is not a function of the community as much as Its Identity, as well as large numbers of people who live In unincorporated communities.

And every time annexation or Incorporation Is discussed, It Is a hot button for those communities and the community surrounding them.

as we speak, we have one Incorporation drive currently In process for the city of hacienda heights or the unincorporated community of hacienda heights which will go back to the ballot for, I think, the forth time. And then we have two larger unincorporated communities of Altadena and Roland heights.

Within this fabric that we weave together as the valley, we have within us and, I think as Sam Indicated, we have also cities that provide their own service and contract for those services.

In fact I have 14 of my 30 cities provide their own police department and 18 of those cities or 16 of those cities that contract with the county.

We have seen cities contract with the county.

We have seen cities now start to contract with each other. In fact right how we had a number of cities move to the county for fire protective services thinking that there was economy of scale In going to the larger agency and now are reversing that trend and going back to contract with Individual cities, so that we will see one and two and three cities band together to achieve that economy of scale providing an Individual city.

I probably would leave you with the concept of this In saying that In this particular geographic area, size of a city In terms of what constitutes the most efficient Is really not a primary concern as Is what Is the community of Interest within the people living In that geographic area.

I can share with you, as you move through each 91 one of these dots on the screen, that while they like working together and San Gabriel valley council governance Is a joint powers agency formed just five years ago and the sole reason for forming It Is that these 30 cities didn't think that we In the San Gabriel valley was an afterthought of what happened downtown Los Angeles, not too unlike what you feel In San Fernando valley happens with what happens In downtown Los Angeles.

You have city hall to fight, we have MTA or county. You pick your agency down there. But our numbers were very clear, San Gabriel valley was not getting Its fair share of this other resources. So five years ago these 30 dots banded together and said let's go after It and get It.

Since that happened, we now see, five years later, over two billion dollars worth of government Infrastructure being allocated and Is currently under construction In major projects In the valley.

What occurred out of that was not a change of any one of these dots, and perhaps a greater recognition on the part of each of these Individual cities, that their Identity and the culture of that community Is extremely Important and critical to the long-term success of these 30 other dots willing to cooperate, recognize, and appreciate and hold of the highest degree the concept of local control, at the same time working together for common good. In this particular case we define that as a geographical entity that happened to be the valley.

It has worked so far for us, and we hope In the future will continue to work as well as the past five years have been.

But I do think It serves as a model In at least Los Angeles county where we have some 80-some-odd cities all working, sometimes against each other, sometimes working together, as a way to decentralize us and decentralize the decision making authority and the accountability to at least get a more -- I'm not sure cost efficient government, but It certainly will be a more effective city government.

Mr. Poole: thank you very much. It sounds like you are living In Ronald Oakerson’s laboratory. It looks very promising.

Next we will hear once again from our founding father, David Fleming.

Mr. Fleming: I want to say two things, maybe three.

Number 1, thank you for coming today. You do have the best bus system of anyplace In Los Angeles county, foothill transit. You got In while the unions weren't looking. You get better service for less cost than anybody.

Secondly, I will share something with you.

Bob hertz berg told me that having looked at San Gabriel valley, he was really Impressed because he said you get better service In those smaller cities at a lower cost than anywhere else. And we ought to think about that In the valley, the San Fernando valley.

So with that In mind, I want to just touch on two things. First, one city we haven't talked about but I was 93 told three years ago Is a real model to look at, and that's Tokyo.

Tokyo Is a city that Is a little bit larger area than Los Angeles. It has a little bit bigger population.

Tokyo Is divided Into 28 districts, and these districts are almost totally autonomous. The only thing the central city handles In Tokyo Is fire and sewers and transit.

Everything else Is handled by the districts, Including the power to tax.

The districts have their own police department; they take care of all the other city services. And they do their own taxing. They remit a portion of those taxes back to the central city governments to take care of fire and sewers and transit.

And one other thing. They have a board of equalization at the central city government In Tokyo that takes some of those tax revenues that come back to the central city and they redistribute those to those districts that are poor, that don't have high property values, and that need some help. So nobody gets left out. That Is the real taxing safety net In the whole Tokyo system.

But Tokyo has worked like a charm, and that Is another city we ought to take a look at.

One other thing I wanted to talk about was something that I had suggested the Idea of quasi-cities or boroughs back In the charter debate.

And a good friend of mine, Sam bell, who Is the 94 executive director of laba, that Is the Los Angeles business advisors, which Is made up of the ceo's In major companies -- there are not many left, but a few ceo's of major companies.

He said to me It Is a fine Idea about empowering districts or boroughs or communities or clusters of communities or what have you, he says, but we are scared to death because of nimbyism.

And I said, well, Sam, I'll tell you what. If you look at the city of Burbank or Glendale or any one of the other 88, 87 cities In the county, I said, you know, It Is the same thing there. You run the risk of nimbyism except you don't have nimbyism In most of those cities, and I'll tell you why, because they get the tax revenues from new development, and they can use those tax revenues In any kind of public purpose they want. So I can understand why you are scared of nimbyism because up until now, particularly In the city of Los Angeles, as was touched on earlier, when a developer comes In with any kind of a plan, which might be a very good plan, Incidentally, a very sensible plan, why should the public In that area say yes to their city council person, because all they are going to get Is the dust and the dirt and the Inconvenience and the traffic and all the other things that are bad connected with new development and none of the good.

The good goes downtown. It disappears. It never shows up In that district.

On the other hand, If you give them the tax Incentive, the tax Increments from sales tax, from property tax, whatever that occurs from that new development, then you 95 put that area In much the same position as a Burbank or a Glendale or another Independent city.

In other words, there Is a plus side. And for the first time, the scales for developers are balanced. They have got to come In, they have got to sell their product. But there Is something there that the public In that area or district Is going to benefit from.

And for that reason you have an antidote to nimbyism, and that's very Important because, when push comes to shove, I would bet this, all of our talk about boroughs or districts Is probably not going to go very far, not with the city council, not with the city bureaucracy In Los Angeles.

I would agree with Joel Kotkin, If I had to bet right now, I would say that In a couple of years or so we will have three new cities: Hollywood; the valley, of course; and San Pedro; and of course a new smaller city of Los Angeles which would be left.

But If the valley were a separate city, It would still have to do a district or borough system because the valley Is just too big, as the sixth largest city In the united states, not to do It.

And I think of no better place that would be easier to do It than this valley, which has traditionally always lived In communities.

People Identify with communities, people understand communities, they live there, they work there, they know their neighbors there. And that Is the kind of valley that I can see, very much like the San Gabriel valley, not 96 necessarily separate Independent cities, but boroughs or districts with a great deal of autonomy to do things In those districts that make sense to the people In those districts.

Mr. Poole: thank you, David. And finally we are going to hear, In terms of substantive comments, as opposed to procedural, from bob Scott who Is the chair of today's symposium.

Bob.

Mr. Scott: thank you.

Actually, I have been listening and trying to distill from this. And obviously we are going to spend some time poring over the records on It to determine what use we can make of It.

Everybody has spent the day here, and I thank those who stuck around long enough for this portion of the event.

And what I noticed, more Important than anything, Is how much we haven't talked about today. We could probably go on for another couple of weeks and still not touch on some of the main topics.

I did have to comment, though, my favorite statement was Edward Schwartz when he said, "measured not by service but by progress," which was an Interesting way of describing what municipalities often do.

I thought the most Innovative conversation was that of bob nelson when he talked about what I would call the charter neighborhoods.

We are familiar with charter schools, but I 97 think what he was talking about was something along the line of a charter neighborhood.

When you talk about charter neighborhoods, you begin to realize the dimensions to which you can go In trying to accomplish this local control we talk about.

We have a thing called charter schools.

Charter schools have been variously defined as some kind of an antidote for a failing school system, L.A. unified school district, for example.

And what has been brought up also Is charter clusters, that Is, taking more than one school and creating a charter cluster. That Is being successfully done In the pacific palisades area.

This whole Idea of charter neighborhoods or neighborhood Improvement districts, like business Improvement districts, Is rather Interesting. It Is a new one on me.

But I mean that Is the Idea where If you go and start from the smallest size up to the largest size, that there are a lot of different possible combinations that might work.

Some of the things that we haven't really gotten Into In great depth were the Issues of what Is the best area to cover, at least In terms of something like transportation.

Okay. Nick Conway has talked about the San Gabriel valley, very successful foothill transit district, something that was attempted In the San Fernando valley, thwarted for reasons I can't explain.

98 also If you look at how things are handled, talking about the Lakewood plan, various layouts.

If you take the city of San Fernando, the city of San Fernando has Its own police department, but It uses L.A. fire department because It makes more sense. It would be difficult for them to try to field the kind of fire department that they would need.

By the same token, the city of Calabasas, also another valley city, has a county fire department -- county fire department and a county sheriff's department because that works In their context. Frankly, I guess the county probably has more mountain type vehicles that they can use.

So when you look at all that and look at what we are trying to short out here, we are trying to figure out what Is the best way for things to go.

If we could start over -- we can't necessarily start over with the L.A. city plan. I have been on planning commission now for seven years. So It has pretty much built up. You end up putting things between things.

So we are not able to start with a blank sheet of paper. Politically you probably can't really start with a blank sheet of paper, but you can certainly begin to erase the lines and start thinking of new ways about how we govern ourselves to make ourselves successful.

I would say that the term I have heard used the most that means the most has probably a lot less to do with services and power, but It Is about creating and maintaining a sense of place so that people want to be Involved, so you can 99 feel like there Is a community, It's got a center to It, and It's someplace they can go; the people that are governing them are people that they know, people that know them.

Mr. Poole: thank you, bob.

We have gotten four questions from the audience so far. But I thought, before we do that, If there are any responses from any of you up here to anything that the other people have said, let's hear those first.

Mr. Conway: just following back up on bob's comment about charter, and I throw this Issue out because It Is really moving Into the arena of government.

We are currently, In San Gabriel valley, pushing for state legislation that would declare San Gabriel valley a charter area for housing.

And this Is coming off the heels of the housing allocation program that we recently went through at SCAG.

All jurisdictions as part of a state mandate must come up with a housing program of which I think In all segments of California are recognized to have failed. There Is no -- very limited housing being built; that which Is not matching the market.

And, more Importantly, when you get Into the Issue of housing, nowhere Is there a greater Issue of nimbyism than when It comes to housing and the types of housing In a community.

We have recently gone through an exercise In San Gabriel valley with those 30 dots with everyone trying to push out within their boundaries within the types of housing 00 they do or do not want to have and have been able to, among those 30, come to some agreement as to how to allocate housing, Including low and moderate.

And one of the big Issues coming out of the San Gabriel valley Is those communities that are low and low-moderate housing now who want to upgrade themselves can't within the state law. They have to continue to build out more low and low-moderate housing while the upper Income communities are at a quota as to how many they have to build In low-moderate, but they can continue to build on high end.

The legislation, as we are pushing, would, In essence, enable each of the 30 cities to suspend the housing laws In the state of California for a period of two years while these 30 cities work together amongst themselves and within their respective communities to construct housing rules and regulations relative to the development of new housing, the remodeling and reshaping of existing housing that hopefully will set a prototype for the state of California.

We have gotten assurances from the state housing community development department that they are very Interested In trying this exercise and that we are putting together a legislation that will be entered In and has been entered Into the state legislature and hopefully pass this session.

That will start this process of charter neighborhoods. In this particular case, It will be 30 cities going under the umbrella of a housing function and see If we can make this housing Issue, which Is so critical to the 01 overall development of the region, work because up until this point In time It Is, I think, In everybody's estimation, It Is not working, and there Is no hope In the future to make It work given this current way these cities are structured and rules that have been developed.

Mr. Poole: other comments here? Let’s go to the first questions, then.

This question was addressed to Sam, but I think any of you could chime In on It.

How will a valley city or Hollywood city contract with the DWP for water and power? What If DWP doesn't want to participate? I am not sure If any of us know the answer to that, but Sam or anyone else care to take a crack at It? Mr. Staley: I'm not sure I know the answer to that either. Deregulation Is always an Issue right now. Everyone Is very concerned about It.

But If I understand It, they would be able to get power through the power exchange and that kind of thing without a problem.

I don't know exactly what kind of contract would have to be developed, but I'm sure that It could be worked out In relationship to that.

One thing I might add, If I could, and David had touched on It; I think It Is a very Important Issue.

When we try to make things simpler, sometimes we make them more complex. And I think If we can keep things as simple as possible, you are probably better off, In 02 particular In the valley.

You have a large community that Is a million and two, I suspect, and Incorporating that, rather than secession, Is going to be difficult at best. And making the right choices as you go along would be very Important.

Contracting Is simple; once you get past that stage, you can do just about anything you want to do.

Mr. Poole: Joel.

Mr. Kotkin: I want to ask Dave. He Is a lawyer.

Basically I want to ask you: wouldn't people In the valley feel that they have a right to DWP since they have been paying for that Infrastructure and essentially the valley has always existed under the DWP? What would be the legal situation? Mr. Fleming: I think If DWP didn't contract with the valley, Larry calamine would break their knee caps.

Hi, Larry.

Just kidding.

I think that certainly politically DWP would want to keep the customers they have. They wouldn't want to lose what would be the equivalent of the sixth largest city In the country as a customer. I don't think there would be a question about that.

Mr. Poole: this Is a question addressed to anyone on the panel.

Do any of you have firsthand experience of a major secession of territory from a large city? If so, was It successful and does It suggest any advice? I'm not aware of this sort of situation In the 03 united states having been done, certainly In our lifetimes.

But anybody have any such experience? Mr. Fleming: I think the last one that was ever done that we ever know about Is when Coronado Island split from san Diego, and that was the turn of the century. All the documentation on that has long been lost.

Mr. Poole: that Is pretty small by comparison.

Mr. Fleming: this Is the first time In the united states anything like this has ever happened.

Mr. Poole: this offers a real opportunity to break the mold and rethink from the ground up how you would organize and structure such a city. And I think a lot of the suggestions here today are that you wouldn't just try to recreate mark two version of the existing structure of LA

City government. That, from everything that we know, would be about the worst thing you would want to do.

Mr. Fleming: the other thing, too, Is that If It Is such a shocking thing, why doesn't spring street take a look at this and say, gee, whiz, maybe we better think about doing things differently? MS. Svorny: I just wanted to reinforce what Dave said earlier about how Important It Is In a new city to think about devolution of power and local control. I think that Is the great opportunity of this kind of adventure, that -- that even without It, I always get frustrated when people say well, the city won't be any different, It will be 1.3 million Instead of four million.

But I do see It as a tremendous opportunity to 04 try and think of Innovative ways to provide services to communities.

Mr. Poole: I would like to suggest that -- something that Joel said about negative appeal versus positive appeal. It seems to me that the greatest chance of making a valid Incorporation drive successful would be to capture the Imagination of people with a dramatically different and better form of government that could certainly be applied to the city left behind or to the other pieces that are also talking about Incorporating.

If there Is one thing that comes out of today that I would suggest Is that those working for this really put some serious effort Into building on the Ideas from here to develop that positive vision, and don't let It be by default, simply a smaller version of the existing city of Los Angeles.

A couple of questions about sort of civic participation. One was directed at nick and one at Shirley.

Nick, what Is the average voter turnout In municipal elections for your 32 dots or however many It was? Mr. Conway: I don't think that Is any different anyplace. We are not unique. We have our share of Indifference to voting, unless there Is an Issue within those communities and people will turn out.

But I will share with you that one of the Interesting aspects that we have found Is that the last two years we have done a survey on quality of life In the San Gabriel valley, very much fashioned after the survey that was done In orange county on quality of life Issues.

05 during the last two years that we have seen, we have seen a dramatic Increase In people's perception of their Identity as San Gabriel valley, whereas before we always thought If you said to somebody, I think you say to most of the people In Los Angeles, where you live, either Pasadena or Pomona or one of the communities there, but It didn't have an Identity of San Gabriel valley.

I think now those communities think of themselves as they are still from Pasadena, they are still from Pomona, very proud of It, but they also happen to be In the San Gabriel valley and proud of that. And they are recognizing that within the survey Instruments.

And they are happy with quality of life. And I guess If they want to see a change, they have the ability to turn out at their next local elections, which we have In the valley In five weeks.

All of my 150 elected officials are all very antsy because 60 of them are running for office, and they hope to be reelected back to their local city councils and continue that quality of life Issues.

Mr. Scott: nick Is being very modest about not mentioning the fact that also In that survey we had some similar questions, also done by the rose Institute, on San Fernando valley. There was a marked difference between the satisfaction with local government, the approval rating was considerably higher In the San Gabriel valley.

Mr. Poole: Shirley, the other question was for you and picking up on some comments that you made about what would  you as a citizen want out of local government.

The question Is: what, In your opinion, Is the purpose of grass-root neighborhood groups? Do they have a purpose or value as you see them? MS. Svorny: well, If we break away from the city, this grass roots effort will have been one that moves us to a better city structure.

I don't mean to put those down, but I just worry when people start talking about neighborhood councils and how Important It Is for all of us to participate.

I think It Is true In terms of services where community participation Is part of the product. You can't produce police services without having people watch out for their neighbors. There Is tons of evidence now that those kinds of things that Involve residents give you outcomes that are desirable.

There Is a book called "rebirth of urban democracy." It talks about cities, and It glows about these cities where they meet every night, they meet every weekend, they have all these community advisory councils.

And they did some tests to see If there was any Incremental awareness, If their politicians were any more aware of the Issues In those communities than comparable cities, and they didn't find It.

I just want to make It clear, we don't want to meet just to meet. We want to meet If there Is something functional that comes out of It.

Mr. Poole: another question that has just came up: 07 why all the talk about, quote, unquote, breaking away from LA? Can't we have the concept of boroughs and still be a part of the city of LA? David.

Mr. Fleming: we should, absolutely. We could.

I think we should. At least I think LA

Should certainly be given the opportunity to create a borough system here.

My feeling about It Is, having dealt with the city counsel, having dealt with the bureaucracy of the city, having fought the fight of charter reform, I just think It Is an outside chance.

It Is very difficult for me to see folks In city hall that made us spend more money fighting the city of Los Angeles In federal court after we got 350,000 registered voters to sign a petition that they wanted to elect a charter commission, and the city council refused, first of all, to recognize the signatures and then, secondly, even after they were verified by the registrar of voters, to put It on the ballot. And we had to take them Into federal court.

And It wasn't until judge Pfalzer actually threatened to hold all the members of the city council In contempt that they finally said okay; we will put It on the ballot.

It cost us, I think, about $400,000 to get the signatures, and It cost us over $500,000 In legal fees to fight our own city council In federal court.

Now, If they refuse to even put on the ballot 08 the right of the voters to decide whether to elect a charter commission because they wanted to hang on to power at city hall, It seems a little bit of a stretch to think that they are going to actually devolve power to communities and to boroughs In the city of Los Angeles. But I hope I'm wrong.

Mr. Poole: except possibly as a means of staving off, If It looks like secession or Incorporation of a big chunk of the city Is likely to happen, might they not decide better to cede power than to let all this go? Mr. Fleming: Interestingly enough -- and I can defer to Jeff brain, Richard close on this -- there Is a unanimity south of Mulholland about secession.

Some people In city government think that maybe getting rid of the valley Isn't a bad Idea for their own political future.

And It Is surprising the number of people that are now saying well, let's take another look at this.

If In fact Ron Deaton’s figures are correct and the valley only gives 31 percent to the city and gets back 35 percent of the money, then It would be advantageous for Los Angeles to get rid of the valley.

So who knows? Those are all things that we don't know yet.

Mr. Poole: Joel? Mr. Kotkin: I just have a question for David on the borough. Any of the mayoral candidates react positively or negatively to that? Mr. Fleming: Joel, I haven't seen any discussion 09 yet. I don't know whether we -- Mr. Kotkin: we have candidates running for who will be the next Mikhail Gorbachev. They are not dealing with the fundamental Issues.

Mr. Fleming: Mr. Riordan, tear down this wall.

Mr. Kotkin: I was asking you what your sense of where the mayoral candidates are on the secession Issue? Mr. Fleming: I think they are all kind of skirting It. Obviously they saw the figures.

The valley elected dick Riordan. Take away the valley's votes, mike woo would have been there In '93. They know this Is a voter-rich area, about half the city votes In the valley. And that Is why they have all opened offices out here.

But I think they are tiptoeing around the whole secession thing because they don't want to get anybody angry at them.

Mr. Poole: a question addressed to both bob and David as the representatives on the panel of he economic alliance: where do we go from here? We put on this conference today. What Is the next step, and will there be some kind of follow-up dealing with these Issues? Mr. Fleming: bob, why don't you talk about what you are going to be doing.

Mr. Scott: obviously, the process moves forward. I understand LAFCO will have their report out the middle of this month.

The other thing we are doing as far as the 0 economic alliance goes Is we sense there Is Identify for the San Fernando valley no matter what happens to the political questions.

A lot of what we are going to be focusing on this year Is creative vision for the valley, trying to rethink what the area should look like, and that Is Including the entire valley, working with the six valley cities, and trying to develop a responsible vision for what the folks who live In the valley would like to see their home look like.

And we also are going to be producing -- aside from the fact we have a transcript being prepared In the event that we need to get very specific on some of these details, we are also preparing a compendium of this event which we will share with all the elected officials, all the LAFCO officials throughout the state of California, and will be available to those who have attended here and giving you reference work from which you can move forward and basically Inform the public debate on the Issues.

Mr. Poole: before I turn It over to David Fleming to give us some concluding comments, let me just remind you that you have one of these green sheets In your packet.

Please do fill this out. This Is very useful feedback from you for the economic alliance and rppi to get your thoughts and comments.

Now, I am pleased to turn over the mic to David Fleming.

Mr. Fleming: first of all, I want to thank everybody for coming and staying. It has been a long day. We  have covered a lot of ground and a lot of new things that I think everybody learned. I certainly learned a few things I sure never knew, and I think a lot of us did.

I also want to thank very much the speakers who came In all the way from London and from all over Canada and from all over the united states to join us.

This Is probably the best gathering of minds that, except last night, they have ever seen as far as this whole area of local and regional governance Is concerned.

I want to thank the reason foundation, Lynn scarlet, bob Poole, and everyone connected with the reason foundation, particularly Sam Staley, for the great job they did In helping us put this thing together, and bob Scott who did It on behalf of the economic alliance, and all of the speakers and all of you In particular for coming today and taking your time.

This Is a very Important Issue to the future of southern California and the city of Los Angeles. And we can't deal with the future unless we know where we are going, we know what paths are out there to take.

I think we have gone a long way In finding out what our paths are, and I want to thank the folks from LAFCO for coming today too because I think It Is Important for them to hear this.

certainly Jeff brain, the valley vote people who were here, and all the others representing members In the city council and there were several staffers and the mayor.

And I see Jim Hahn's good friend, Ted stein, Is here and Steve Soboroff and other candidates.

We had people here that are running for mayor of Los Angeles.

Whether you agree or don't agree, we are all In this thing together. It Is really our city, It's really our communities. And what we do In the future Is going to depend upon what we do as leaders.

So I thank you all for coming.

We are adjourned.

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