Weekly Report – March 30, 2015 – Strengthening Government’s Role in Fostering Economic and Job Growth

Strengthening Government’s Role in Fostering Economic and Job Growth

Workers’ Compensation: One of the issues the L.A. Coalition’s and Mayor Garcetti’s Operations Innovation Team will focus on is L.A. City government’s workers’ compensation system. In a recent CA Workers’ Compensation Institute and the American Insurance Association report showed that the average medical costs per claim for all CA self-insured public entities has increased 27 percent over the past seven fiscal years. The culprits for driving medical costs up include more use of outpatient services, increases in pharmaceutical costs, increases in inpatient surgery costs and increased use of pain medications. Statewide reform will be necessary to bring these costs back under control in the absence of a significant reduction in the worker injury rate. At the local level, the City needs to look at ways to reduce the City’s workers’ compensation rate to the State rate. Although the State has one of the most expensive rates nationwide, it is lower than the rate paid by the City, where workers’ compensation costs are one of four primary drivers of the City’s budget deficit, costing the City of L.A. $300 million per year and it is increasing each year. The Team will look at ways to increase efficiency around Workers’ Compensation claims and reduce fraud. In 2014 city analysts found that a 10 percent savings in this area would reduce the City’s Workers’ Comp expenditures by $30 million each year.

Last week L.A. City Controller Ron Galperin released a pair of city audits showing an “excessive” filing of workers’ compensation claims by L.A. police and firefighters. Two-thirds of city firefighters and 60 percent of police officers filed an on-the-job injury claim in the last three years and nearly half of those employees have filed more than one claim during that time. These claims are costing the departments up to $28 million a year. The police and fire departments are shielded from the full cost of workers’ compensation claims because they don’t have to pay the medical bills and those costs, nearly $85 million over the last four years, are covered by a separate city fund. Because injury pay is exempt from federal and state income taxes, the employees typically take home significantly more money when they’re not working. And time spent on leave counts toward pension benefits. The city audits found that workers’ compensation costs for sworn employees have increased by 35% over the last five years to $141 million in 2014, including salary payments while the employees were off work, medical bills and other related expenses.

Audits: http://controller.lacity.org/stellent/groups/electedofficials/@ctr_contributor/documents/contributor_web_content/lacityp_030732.pdf

L.A. City’s Zoning Codes: The City of L.A.’s Zoning Advisory Committee continues to move forward with re:code LA. The goal of this effort is to modernize the City’s antiquated zoning code which was first established in 1946 and it has not been updated since. Throughout the decades hundreds of amendments have been added, along with zoning administrator interpretations and policy memoranda. These changes have created a process that is less transparent and more prone to different interpretations, both legal and non-legal. The committee’s goal is to revise the code to make it easier to navigate and understand. It will not re-zone property, but it is going to look at development standards – how many parking spaces are required, what the setbacks should be, and how much floor area should be allowed. In essence it helps communities control how they want to grow or not grow. The committee will first look to get a new zoning code done in Downtown, because of they cannot get it done there, it is unlikely they will get it done elsewhere in the City.

L.A.’s General Plan is also in need of a comprehensive update. The City of L.A. is the only charter city in the state that is obligated to have consistency between the General Plan and zoning. The General Plan governs what gets built in the City of L.A. and within the Plan, there are 35 Community Plans. Certain ordinances implement these plans – the zoning code and the subdivision code are two critical ones. The Plan’s backbone, the General Plan Framework Element, is based on 1990 census data and it was prepared in the early 1990’s, and adopted in 1996.  Of the other mandatory and discretionary planning elements, only the Housing and Transportation Elements have been properly updated. Everything else is old, and some General Plan elements, like Infrastructure, are downright ancient.  The City Council adopted them in the 1960’s, and they have not been updated in a half-century.

Higher Education – Global Collaboration

I recently met with Professor Tom Welton the Dean of the Faculty of Natural Sciences at the Imperial College of London to discuss their under construction Research and Translation Hub (think Bloomberg’s Roosevelt Island Tech Campus) and the appointment of the College’s new president – Alice Gast (she started her studies at USC). President Gast has also been visiting CA to discuss the Hub and her emphasis on linking research and commerce to benefit society and the economy, i.e. – personalized healthcare, crop security, mathematical finance. Her top goal is to build relationships between the University and CA’s world-class universities and businesses (Biotech, lifesciences, finance, etc.) to help advance innovation through co-location and collaboration. Imperial West already hosts scores of innovative spin-outs and start-ups, and is highly connected to London’s TechCity and MedCity ecosystems. Please let me know if you have an interest in meeting with Alice or Tom.

Link to the College: http://www.imperial.ac.uk/